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  2. Point in time
    2006-07-07

SIFA 14.1 Money Laundering

SIFA 14.1.1 G

FSMA gives us a statutory objective of reducing the extent to which regulated firms are used in connection with financial crime, including money laundering. FSMA gives us powers to make our own rules on money laundering, as well as prosecuting firms for breaches of the Money Laundering Regulations 2003. Both the rules and the Regulations are high level. They are complemented by more detailed industry guidance produced by an industry body, the Joint Money Laundering Steering Group (JMLSG). The JMLSG Guidance Notes aim to help firms to comply with the rules and the Regulations, in particular with customer identification requirements.

The Money Laundering sourcebook

SIFA 14.1.2 G

The Money Laundering (ML) sourcebook details our Rules and Guidance on anti-money laundering systems and controls that aim to reduce the opportunities for money laundering. Alongside these regulatory requirements, there are also requirements imposed by the criminal law and the Proceeds of Crime Act 2002. So, there are two parallel regulatory regimes and firms must comply with both.

Our rules require your firm to:

ML ref.

•

appoint an Approved Person to be the Money Laundering Reporting Officer (MLRO). The MLRO is responsible for overseeing your firm's anti-money laundering activities. They must produce a report to senior management, at least once every year on any relevant money laundering issues and your firm's compliance with the Money Laundering sourcebook. This report also needs to detail any necessary remedial action;

2.1 & 7.1

•

take reasonable steps to identify clients. The Joint Money Laundering Steering Group Guidance Notes show how to comply with this rule;

3.1 & 3.2

•

have clear procedures for internal (made to the MLRO at the firm) and external reporting (made by the MLRO to NCIS) of suspicious activity;

4.1 & 4.3

•

obtain and make use of government or Financial Action Task Force findings;

5.1

•

train staff who handle, or are managerially responsible for the handling of, transactions which may involve money laundering at least every 24 months in their anti-money laundering responsibilities; and

6.2 & 6.3

•

keep relevant records.

7.3

SIFA 14.2 Further rules to take into consideration

SIFA 14.2.1 G

You should also take the following rules into consideration:

  • If you are a sole trader with no employees, not all the provisions in ML apply (ML 8.1).
  • Other areas of the FSA Handbook, which refer to money laundering, are detailed in ML 1.2.3 G. This includes rules in SYSC 3 that place a specific duty on senior management to take full responsibility for all areas of compliance with the Rules and to demonstrate that your firm has adequate systems and controls in place.

The following sections of the Guide are also relevant:

•

'FSA Principles, Systems and Controls' - Chapter 5

•

'Know your customer' - Chapter 9.8

If you do mortgage or general insurance business you should also refer to MIGI 15 .