An update on the transfer of AML supervision to the Financial Conduct Authority

In October 2025, the government announced that the FCA would be taking over the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) supervisory functions currently carried out by ICAS and the other professional body supervisors.

Our response emphasised the need for swift action. In the seven months since the announcement, engagement levels between key stakeholders has increased.

Update for members and firms

The King’s Speech

Following the King’s Speech on 13 May, HM Treasury (HMT) confirmed that primary legislation measures related to the AML supervisory reform programme will be included in the upcoming Financial Services (FS) Bill.

Many of the necessary legislative changes will be made through secondary legislation. The measures in the FS Bill will give the government the necessary powers to make these changes, particularly around information sharing and cooperation between the FCA and professional bodies. They will also ensure the FCA receives the start-up funding needed for the implementation period.

Engagement

ICAS has taken part in a programme of engagement events in recent months, including:

• An FCA webinar in March attended by more than 40 representatives from professional body supervisors. This introduced the FCA’s senior leadership team and outlined the main activities planned for the year ahead.
• A meeting in April attended by 33 CEOs and senior leaders. Discussions focused on implementation, transition management, regulatory overlap, sector considerations and transparency.
• At the end of May, ICAS will host several FCA representatives at CA House for a ‘discovery workshop’. This workshop will explain our AML processes, with a focus on data collection and risk frameworks.

Key issues raised

In a recent email to the professional body supervisors, the FCA highlighted several themes that emerged during their engagement discussions. The key themes include:

• Consideration of organisational timeframes and other work: Participants emphasised the need to take into account existing schedules and ongoing activities within organisations when planning and implementing changes.
• Appreciation of openness and transparency: There has been recognition of the value of open communication and transparent processes in facilitating collaboration and building trust and a mutual desire to build a robust and effective regulatory regime.
• Requests for different sectoral needs and team compositions: Participants reminded the FCA that sectoral needs and team structures vary, requiring proportionality and a tailored approach.
• Requests to be mindful of and avoid dual regulatory burden: Stakeholders have asked that any new framework should not impose unnecessary burden or result in overlapping regulatory requirements.
• Requests to only ask for data not already held: Stakeholders have requested that data collection requirements focus on information not already held, to minimise duplication and administrative burden.

Firm experience research

More than 600 firms have expressed an interest in participating in the FCA’s firm experience research. The FCA is progressing with interviews involving participating firms, aiming to gather detailed insights into their experiences.

Next steps

The FCA advised the professional body supervisors as follows:

“Our next phase of work will focus on continuing bilateral engagement, completing further discovery activity and drawing together the insights gathered to date. These findings will help inform the emerging supervisory model and support ongoing discussion on transition, proportionality, and minimising unnecessary burden”.

In the meantime

As noted in our previous article, until the government progresses its intended course of action, ICAS remains the AML/CTF supervisor for relevant ICAS firms.

Firms must continue to meet the legal obligations under the Money Laundering Regulations and associated legislation.