By: Johnathan Marr & Justin Meagher
Effective December 31, 2016, firms subject to UK Money Laundering Regulations (MLRs) must also file financial crime returns (REP-CRIM). In this post we’ll lay out the details of REP-CRIM and what you should know about the new regulations and how they may affect your business.
The recently released Financial Conduct Authority (FCA) Policy Statement (PS) 16/19 summarizes the final rules for the financial crime return. The policy was first consulted in 2015 as part of Consultation Paper (CP) 15/42. Its provisions are effective as of December 31, 2016 with a deadline of 60 business days from the end of the reporting period, on a best endeavors basis for any report with reference date prior to December 31, 2017.
Firms subject to crime reporting are those that are also subject to UK Money Laundering Regulations. These include, but are not limited to, banks, investment firms, and life insurers. Firms are required to file a REP-CRIM for the areas of their business subject to the Money Laundering Regulations only if they have annual revenues that exceed £5MM (including revenues from all regulated and unregulated businesses).
The primary objective of the annual financial crime report is to ensure that the FCA receives regular and comprehensive information about a firm’s systems and controls to prevent financial crime. This information helps the FCA assess the nature of financial crime risks within the financial services industry.
This report asks for information regarding high-risk customer relationships, politically exposed persons, jurisdictions of operation, and effectiveness of the firm’s AML and fraud identification processes. It also examines employee time dedicated to those processes.
Firms affected by the regulation should know the deadline is 60 business days from the reporting period end date, so returns should be received by the end of March 2017. Be sure to leave enough time to complete the return. While the individual data points appear relatively straightforward, they may prove more challenging than expected.
For additional information on this new requirement and how SS&C can help, email us at RegInquiries@sscinc.com.