New anti money laundering rules came into force on 1 September 2006. The Money Laundering Sourcebook in the FSA Handbook has now been replaced with new provisions contained in the Systems and Controls Sourcebook. The new rules seek to promote the existing risk based approach to money laundering prevention.
The new rules require that firms operating in the regulated sector have in place suitable systems and controls to allow the identification, assessment, monitoring and management of money laundering risks. The focus of the rules has shifted, however, now offering firms increased flexibility as to how they manage the risk and the procedures they use to do so. The new rules take an increasingly high-level approach but firms are still required to prioritise anti money laundering procedures. A key change is the requirement for increased input and involvement from senior management.
Additionally, the new rules place greater importance upon the revised Guidance issued by the Joint Money Laundering Steering Group, which has also recently come into force. Under the new FSA rules, firms are required to follow the relevant provisions in the Guidance and whether or not they have done so will be a factor, which the FSA may take into account in considering whether a breach of the FSA rules has occurred.
Law and Guidance: The FSA Handbook Systems and Controls Sourcebook SYSC 3.2.6
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The original publication date for this article was 11/09/2006.