FCA calls for improved treatment of Politically Exposed Persons by refining definitions, reviewing statuses, enhancing communication, and tailoring risk assessments.
The Financial Conduct Authority (FCA) has called upon UK financial firms to enhance their treatment of Politically Exposed Persons (PEPs) and their families, ensuring fair and proportionate scrutiny.
While most firms reviewed by the FCA did not excessively scrutinize PEPs or deny them accounts, there remains room for improvement. The regulator has directed firms to refine their definition of PEPs, promptly review PEP status upon leaving public office, communicate effectively, and tailor risk assessments accordingly.
This call for action follows concerns about how UK firms comply with requirements for enhanced checks on PEPs, stemming from global standards set by the Financial Action Task Force. Although the FCA acknowledges that no firms denied accounts based on PEP status and most did not subject them to disproportionate checks, it emphasizes the need for further improvements across the board.
In some cases, the FCA is initiating independent reviews of firm practices. Additionally, it is proposing changes to its guidance to reflect the lower risk associated with UK PEPs, clarify exemptions for non-executive board members of civil service departments, and provide greater flexibility in approving PEP relationships.
The FCA invites feedback on the proposed guidance changes until October 18, 2024, and urges firms to implement identified improvements promptly. Ongoing monitoring and potential action will ensure fair treatment of PEPs.
Source: FCA Press Release
Complete the form below to get a free consultation with cyber intelligence experts and trace your funds.
