Who should read this chapter? This paragraph indicates the types of firm to which the material applies. A reference to ‘all firms’ in the body of the chapter means all firms to which the chapter is applied at the start of the chapter.
Each section discusses how firms tackle a different type of financial crime. Sections open with a short passage giving context to what follows. In FCG we use:
• ‘must’ where provisions are mandatory because they are required by legislation or our rules
• ‘should’ to describe how we would normally expect a firm to meet its financial crime obligations while acknowledging that firms may be able to meet their obligations in other ways, and
• ‘may’ to describe examples of good practice that go beyond basic compliance.
Firms should apply the guidance in a risk-based, proportionate way taking into account such factors as the nature, size and complexity of the firm. For example:
• We say in FCG 2.2.1G (Governance) that senior management should actively engage in a firm’s approach to addressing financial crime risk. The level of seniority and degree of engagement that is appropriate will differ based on a variety of factors, including the management structure of the firm and the seriousness of the risk.
• We ask in FCG 3.2.5G (Ongoing monitoring) how a firm monitors transactions to spot potential money laundering. While we expect that a global retail bank that carries out a large number of customer transactions would need to include automated systems in its processes if it is to monitor effectively, a small firm with low transaction volumes could do so manually.
• We say in FCG 4.2.1G (General – preventing losses from fraud) that it is good practice for firms to engage with relevant cross-industry efforts to combat fraud. A national retail bank is likely to have a greater exposure to fraud, and therefore to have more information to contribute to such efforts, than a small local building society, and we would expect this to be reflected in their levels of engagement.
