The Money Laundering Reporting Officer (MLRO)

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • The Money Laundering Reporting Officer (MLRO)
  • Overview
  • The nominated officer and the MLRO
  • Appointment of the MLRO
  • FCA approval and conduct of the MLRO under the SM&CR—SMF17
  • Role of the MLRO
  • SYSC Requirements
  • Financial Crime Guide (FCG 3)
  • JMLSG Guidance
  • Requirement to appoint a nominated officer under the MLRs
  • More...

The Money Laundering Reporting Officer (MLRO)

Overview

The requirements to have robust systems and controls in a regulated firm to prevent money laundering originate from:

  1. the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, SI 2017/692 (as amended) (MLRs), which implemented the Fourth Money Laundering Directive (EU) 2015/849 (MLD4), Directive (EU) 2018/843 (MLD5) and the Second Wire Transfer Regulation (EU) 2015/847 (WTR2) in the UK, and

  2. the Senior Management Arrangements, Systems and Controls Sourcebook (SYSC) in the Financial Conduct Authority (FCA) Handbook

The MLRs apply not only to financial services firms, but also to those sectors which are seen as the ‘gatekeepers’ to the financial system, including auditors, legal services, tax advisers and estate agents. The FCA is one of the three UK statutory AML supervisors in the UK under the MLRs, and it regulates 19,620 firms subject to the MLRs. In addition, through its Office for Professional Body AML Supervision (OPBAS), the FCA has responsibility for supervising the professional bodies recognised under the MLRs, including those in the legal and accountancy sectors. For further information on the MLRs, see Practice Note: MLD4 and 2017 MLRs—customer due diligence checklist for financial services firms.

The FCA also has powers under the Financial Services and Markets Act 2000 (FSMA 2000) to help ensure firms in its remit (around 59,000) have appropriate systems and

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