Experts warn FCA review prompts firms to declassify or retain PEPs

The U.K Financial Conduct Authority (FCA) published findings showing that financial services firms are implementing its guidance on politically exposed persons (PEPs) related to anti-money laundering (AML) inconsistently, with experts warning firms of reputational damage arising from potential enforcement.

The FCA said in a review last month that financial institutions need “to do more” to ensure that U.K lawmakers and their families are not treated unfairly, with all firms needing “to check that their policies, procedures and controls are in line with our guidance,” the U.K. regulator said in a July 18 press release.

Firms should also expect guidance revisions to reflect changes to Money Laundering Regulations (MLR), which came into effect in January. A consultation on clarifications to the guidance on PEPs will close in October.