FCA consults on MLD4

FCA is consulting on changes to its Handbook and Guidance to ensure it is in line with MLD4 and the Fund Transfer Regulation.  The draft MLRs that will replace the 2007 version give FCA greater supervisory powers over both regulated firms subject to the MLR and “Annex 1 financial institutions”.  The changes affect only DEPP and EG, and relate to:

  • amending EG on how FCA will apply its penalty policy – broadly carrying forward the approach under the current MLRs and including  the factors it will apply when using its powers to cancel, suspend or restrict authorisations or registrations, or imposing or setting the length of a ban. It will also apply its settlement discount regime to MLR financial penalties and certain restrictions – but not to cancellations of authorisation or registration or permanent bans;
  • the decision making process- again, FCA proposes to follow its current process and use its current decision makers; and
  • consequential changes, including reference to FCA’s need to consider the ESA guidance as well as JMLSG or similar guidance when assessing whether a person has failed to comply with the MLR

Consultation closes on 7 July (a couple of weeks after MLD4 will have taken effect).