FCA ramps up financial crime reporting


The FCA is stepping up its oversight of financial crime by requiring large firms to file financial crime reports.

Advisers and investment firms with revenue below £5m will be exempt from filing the return. The first returns will be due in late March 2017.

In a policy statement released today, the FCA says the returns, which will be filed through the Gabriel system, will give it more information on risks and trends in financial crime.

The regulator says: “At present, our financial crime supervisory work relies on the use of ad hoc data requests to gather information about firms’ systems and controls.

“We do not currently routinely gather information from firms about financial crime, the risks they are exposed to, or how they manage those risks. This affects our ability to operate a truly risk-sensitive supervisory approach in line with global standards.”

The FCA says more data will stop it from visiting low-risk firms, which it calls an “unnecessary burden” for the firms and an “inefficient use” of FCA resources.

It adds: “A more efficient risk-based approach will allow us to better fulfil our statutory duties, particularly for money laundering, and will demonstrate an approach that is transparent and can be easily understood by industry and others.”

The regulator estimates 1,400 firms will have to file the returns and they have 60 days from their year-end to do so. This was increased from 30 days after an initial consultation.

Feedback from firms shows compliance costs of introducing the new system could be up to £85,000 for individual firms followed by annual costs of up to £12,000.

The FCA has estimated that overall implementation costs for grouped firms could range between £900,000 and £1m with low annual costs.