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Status: You are viewing the version of the handbook as on 2005-06-30.

SIFA 14.1 Money Laundering

SIFA 14.1.1G

The Act charges us with reducing the extent to which regulated firms are used in connection with financial crime, including money laundering. The Act gives us powers to make our own rules on money laundering as well as prosecuting firms for breaches of the Money Laundering Regulations 2003.

The Money Laundering sourcebook

SIFA 14.1.2G

The Money Laundering (ML) sourcebook details our Rules and Guidance on anti-money laundering systems and controls, to reduce the opportunities for money laundering. These rules are regulatory requirements as opposed to requirements imposed by the criminal law and the Proceeds of Crime Act 2002. There are two parallel regulatory regimes and firms must comply with both. Changes to the Money Laundering sourcebook are being made, covering the Money Laundering Regulations 2003 and the 2nd European Directive on Money Laundering.

SIFA 14.1.3G

Our rules require your firm to:

ML ref.

Appoint an Approved Person to be the Money Laundering Reporting Officer (MLRO). The MLRO is responsible for your firm's oversight of ant-money laundering activities. He or she must produce a report to senior management, at least once every year on any relevant money laundering issues and your firm's compliance with the Money Laundering sourcebook. This report also needs to detail any necessary remedial action.

2.1 & 7.1

Take reasonable steps to identify clients. The Joint Money Laundering Steering Group Guidance Notes show how to comply with this rule.

3.1 & 3.2

Have clear procedures for internal(made to the MLRO at the firm)and external reporting(made by the MLRO to NCIS) of suspicious activity.

4.1 & 4.3

Train staff who handle, or are managerially responsible for the handling of, transactions which may involve money laundering at least every 24 months in their anti-money laundering responsibilities.

6.2 & 6.3

Keep relevant records.

7.3

Further rules to take into consideration

SIFA 14.1.4G

You should also take the following rules into consideration:

  1. (1)

    If you are a sole trader with no employees, not all the provisions in ML apply ( ML 8.1).

  2. (2)

    Other areas of the FSA Handbook, which refer to money laundering, are detailed in ML 1.2.3 G. This includes rules in SYSC that place a specific duty on senior management to take full responsibility for all areas of compliance with the Rules and to demonstrate that your firm has adequate systems and controls in place.

CD-ROM

SIFA 14.1.5G

We have produced a CD-ROM called "Preventing Money Laundering: a simple guide for IFAs" that provides further information on money laundering.

SIFA 14.1.6G

One copy of the CD-ROM was distributed to all IFA firms free of charge between early and mid September 2003. Further copies are available for £40 each for one to nine copies; the cost reduces slightly for more than nine copies. To place an order for additional copies please call our Publications order line on 0845 608 2372. You may also order on-line, please see the Industry Training section of our website for more details.

SIFA 14.1.7G

The following sections of this Overview are also relevant:

•'FSA Principles, Systems and Controls' - Chapter 4; and

•'Know your customer' - Chapter 9.8.