ML 1.2 Purpose

The purpose of this sourcebook is to require relevant firms to have effective anti-money laundering systems and controls, in order to reduce the opportunities for money laundering in relation to relevant firms. It is also to require relevant firms to ensure that approved persons exercise appropriate responsibilities in relation to these anti-money laundering systems and controls.

Section 2 of the Act (The Authority's general duties) sets out the regulatory objectives of promoting market confidence and public awareness, protecting consumers and reducing financial crime. The reduction of financial crime objective is the most important to this sourcebook. One aspect of the reduction of financial crime objective is the risk of the businesses of relevant firms being used in connection with offences which involve handling the proceeds of crime. It follows that an effective and proportionate regulatory regime is important in reducing the extent to which it is possible for the businesses carried on by relevant firms to be used for money laundering. These rules and compliance with them will also help the FSA to meet the objective of maintaining market confidence, by reducing the risks posed to the financial community by money laundering. As to the public awareness objective, this sourcebook is designed to assist relevant firms and, through them, the public at large, to be better informed about the safeguards for the financial system provided by effective anti-money laundering systems and controls. Consumers are better protected if relevant firms are able to protect themselves against criminal activity and to record the steps they have taken for that purpose.

This sourcebook provides support, in relation to money laundering, for certain other parts of the Handbook, mainly:

1. (1)

   the Principles (PRIN), especially PRIN 3;

2. (2)

   the Statements of Principles and Code of Practice for Approved Persons (APER), in particular Statements of Principle 2 and 7;

3. (3)

   Senior Management Arrangements, Systems and Controls (SYSC), in particular SYSC 3; and

4. (4)

   the Training and Competence sourcebook (TC).

This sourcebook relates to regulatory requirements, as opposed to requirements imposed by the criminal law. It is, therefore, not relevant guidance for the purposes of regulation 3(3) of the Money Laundering Regulations or section 330(8) of the Proceeds of Crime Act 2002.1

In assessing a relevant firm's compliance with the requirements of this sourcebook, the FSA will have regard to the relevant provisions of the Joint Money Laundering Steering Group's Guidance Notes for the Financial Sector.1