FCA thematic: Assessing and reducing the risk of Money Laundering Through the Markets (MLTM) gap analysis

The FCA recently updated its analysis on money laundering through the markets (MLTM) risk Money laundering through the markets | FCA. This builds on its 2019 Thematic Review 19/4: Understanding the Money Laundering Risks in the Capital Markets from 2019.

As part of this review, the FCA stated: "We expect firms to have robust financial crime systems and controls at each stage of the customer and transaction journey. This is essential to make sure there are no ‘weak links’ that expose participants and the overall transaction to financial crime."

The FCA reviewed a sample of wholesale brokers' AML systems and controls, where it observed how these firms are approaching different parts of their financial crime framework, including risk assessments (both BWRA and CRA), their KYC and CDD checks, governance and oversight, transaction monitoring, SAR investigations and training.

It found good practice and progress in several financial crime systems and controls across larger and smaller firms, however the key challenges centred around transaction monitoring, knowledge of the UK Financial Intelligence Unit (UKFIU) MLTM glossary code, information sharing and documenting CRA methods in more detail.

We have broken down the Report’s key findings, and added important self-assessment questions that you can ask yourself to ensure that your financial crime framework is effectively counteracting MLTM risk. See here to read our latest gap analysis:

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