Financial crime regulatory developments: August 2026

Summary: The FCA announced increased scrutiny of Annex 1 firms, including unregulated lenders, money brokers, safe custody providers and financial leasing companies. The FCA highlighted concerns that these firms may be vulnerable to being used to facilitate financial crime and noted instances where firms relied excessively on group-level financial crime frameworks rather than controls tailored to their own business activities and risk profile. The FCA has also issued information requests to approximately 900 Annex 1 firms to better understand their activities, business models and associated risks.

Impact: Annex 1 firms should ensure their AML and financial crime controls are tailored to their specific risks and operations. Firms conducting business with Annex 1 firms should continue to perform appropriate due diligence, including verifying FCA registration status and understanding the nature of the firm's activities and financial crime control environment.

Link: FCA applying increased scrutiny to Annex 1 firms | FCA

Summary: OFSI imposed a monetary penalty of £4.73 million on the London Branch of US banking corporation for breaches of UK financial sanctions. The breaches related to funds being made available to designated persons subject to UK Russia and Global Anti-Corruption sanctions. The case demonstrates OFSI's continued focus on sanctions compliance and enforcement where firms fail to prevent transactions involving sanctioned individuals.

Impact: firms should review the effectiveness of sanctions screening, payment filtering and escalation processes to ensure sanctions risks are identified and mitigated promptly. The enforcement action highlights the importance of maintaining robust and adequate controls capable of identifying direct and indirect exposure to sanctioned individuals and entities.

Links: 

CBNA_London_Public_Penalty_Notice.pdf

Imposition of Monetary Penalty – Citibank, N.A., London Branch - GOV.UK

Summary: Companies House published guidance outlining how the Registrar will assess whether an applicant or existing Authorised Corporate Service Provider (ACSP) is fit and proper to carry out ACSP functions. Assessment criteria include AML supervision, criminal, regulatory and financial history, honesty and integrity, compliance with Companies House requirements, and the quality of verification and filing activities. The guidance forms part of wider Companies House reforms introduced under the Economic Crime and Corporate Transparency Act. Applicants that fail the fit and proper assessment may have their application refused. The assessment also applies on an ongoing basis and may result in the suspension or cessation of an existing ACSP's registration.

Impact: the guidance strengthens expectations for firms undertaking identity verification and company filing activities. Organisations acting as or working with ACSPs should ensure appropriate governance, AML oversight, compliance arrangements and record-keeping processes are in place to support ongoing fitness and propriety requirements.

Link: Fit and proper criteria for Authorised Corporate Service Providers - GOV.UK