The FSA has written to brokers to notify them of the changes and outlined its expectations regarding the new approach. In its letter detailing its stance against money laundering and terrorist finance, the regulator outlined its plans and objectives in tackling financial crime. Key areas in its approach are its expectation of firms to deliver high AML standards; to assess where risks lie and manage them appropriately and to regard the guidance of the Joint Money Laundering Steering Group.
The FSA also stressed the importance of firms shifting resources into the areas of greatest vulnerability and away from the activity that adds less value to its AML effort. It also outlined the role of supervisors and front-line staff as crucial in the delivery of a more risk-based approach to AML.
It will be looking to ensure firms are systematically identifying and managing money laundering risks, and that there is strong senior management engagement.
Philip Robinson, leader of the FSA’s financial crime sector, said: “We are committed to being more risk-based in the ways we supervise firms’ AML and counter-terrorist finance systems and controls. I am conscious that one reason why firms may feel inhibited about acting in a more risk-based way is concern as to how their supervisors will react. I hope that publishing details will help.”
Bill Warren, director at Complete Mortgage and Loans Service, said: “Adopting a risk-based approach to fighting financial crime means each company can put in place its own practices.”
