In October 2025, HM Treasury confirmed that it intends to make the FCA the sole anti-money laundering and counter-terrorist financing supervisor for professional services. The FCA would replace the 22 legal and accountancy professional body supervisors that currently oversee compliance with the Money Laundering Regulations, and take on aspects of HMRC's supervisory role. HM Treasury consulted on the FCA's proposed powers between November and December 2025.
The change requires legislation and the government has been clear that the transition will take several years. No go-live date has been set. But the decision is made, and firms that will be supervised by the FCA should start preparing now rather than when the first registration exercise begins.
Why the government has acted
The case for reform has been building for years. The Office for Professional Body Anti-Money Laundering Supervision, OPBAS, has repeatedly reported inconsistent supervision across professional bodies, with some taking an effective risk-based approach and others falling well short. A fragmented system with 22 supervisors, many of which also represent the firms they supervise, was always going to struggle to deliver consistent outcomes. A single statutory supervisor is intended to fix that.
What will change for supervised firms
Under the proposals, the FCA would register all in-scope firms and maintain a public register, with powers to refuse, suspend or cancel registration. Its proposed enforcement toolkit includes civil penalties, public censure, prohibitions and criminal prosecution for breaches of the MLRs, along with early-intervention tools such as directions and skilled person reports. Supervision would be funded through fees on supervised firms.
The proposals also include a stricter approach to fitness and propriety. New beneficial owners, officers and managers would need to pass fit and proper checks before taking up their roles, arrests, charges and convictions would have to be disclosed, and acting as a beneficial owner, officer or manager without passing the relevant tests would become a criminal offence.
Firms that are used to a professional body supervisor should expect a different style of supervision. The FCA's approach is data-led, evidence-based and increasingly willing to use formal powers. Its financial crime work in financial services has focused heavily on whether controls work in practice, not on whether policies exist.
How to prepare
The work that will make the transition easiest is the same work that good AML compliance requires anyway:
- A firm-wide risk assessment that reflects the firm's actual services, clients and delivery channels, and that is refreshed when they change.
- Customer due diligence and ongoing monitoring that are evidenced on file, not just described in procedures.
- Clear accountability for the MLRO and the officer responsible for compliance with the MLRs, with management information that shows how they oversee the framework.
- Independent audit of the AML framework, where the MLRs require it, that tests operating effectiveness and is reported to senior management.
- Records of beneficial owners, officers and managers that would stand up to a fit and proper review.
Implications for financial services firms
Banks, lenders and payment firms already supervised by the FCA will not see a change in their own supervisor. But many rely on solicitors, accountants and trust or company service providers as introducers or as part of their customer due diligence. A stronger, more consistent supervisory regime for those intermediaries is welcome, though firms should not assume it reduces the need for their own oversight of reliance arrangements.
Getting specialist support
We provide AML gap analysis, control effectiveness testing and independent audit of AML frameworks against the MLRs and JMLSG guidance, drawing on direct experience of FCA financial crime supervision and enforcement. If you would like an independent view of how your framework would fare under FCA supervision, we are happy to have a conversation.
