FCA calls for brokers to strengthen money laundering controls

The UK's Financial Conduct Authority (FCA) has urged wholesale brokers to enhance their money laundering safeguards following a review that revealed significant deficiencies in their defenses. Key issues identified include a widespread underestimation of money laundering risks, excessive reliance on other parties in the transaction chain for due diligence, and insufficient information sharing among firms. Steve Smart, the FCA's joint executive director, emphasized the importance of maintaining trust in the financial services industry to ensure its growth. He called for brokers to continuously review and improve their controls against financial crime. The FCA aims to work with firms and law enforcement to bolster understanding and innovation in addressing emerging money laundering risks. Overall, the regulator's findings highlight the critical need for stronger risk awareness and training within the industry.