Financial Crime- Understanding the FCA Handbook rules

MEMA has produced this financial crime series for firms, to understand the steps they can take to reduce their financial crime risk. It does not include all the financial crime risks a firm may face but provides an understanding of FCA expectations in this complex field.

Over the next few weeks, we are releasing sections to assist you in dealing withFinancial Crime. The posts will cover key areas such as sanctions, money laundering, CDD and Governance. We will shortly be releasing our ebook which covers a lot of the topics.

First, let us start with the Financial Conduct Authority handbook rules and guidance.

Your firm will need to consider guidance on the Financial Conduct Authority (FCA) handbook rules and principles, particularly:

Systems and Controls

• SYSC 3.2.6R and SYSC 6.1.1R cover the Systems and Controls for firms. As a firm, you must take reasonable care to establish and maintain effective systems and controls for compliance with applicable requirements and standards under the FCA regulatory system and to counter the risk that your firm may be used to further financial crime
• In relation to guidance on money laundering, the rules in SYSC 3.2.6AR to SYSC 3.2.6JG and SYSC 6.3 (Financial crime).
• It requires you to establish and maintain effective systems and controls to prevent the risk that they might be used to further financial crime;

Principles for Business

• There are 11 principles of business your firm will need to be cognisant of
• The key principles for financial crime relate to Principles 1 (integrity), 2 (skill, care and diligence), 3 (management and control) and 11 (relations with regulators) of the Principles for Businesses, which are set out in PRIN 2.1.1R;

Statements of Principle for Approved Persons (APER)

• APER applies to the performance of your firm's approved person of FCA controlled functions. This means the approved person must act with integrity in carrying out his accountable functions.
• The Statements of Principle for Approved Persons set out in APER 2.1.2P