Disciplinary Action by the FCA
The Financial Conduct Authority (FCA) has taken disciplinary action against the Institute of Certified Bookkeepers (ICB) due to significant shortcomings in its oversight of anti-money laundering (AML) compliance. The ICB, which is designated to oversee the AML practices of more than 3,000 bookkeeping professionals, has been found in violation of critical AML regulations between January 2022 and July 2023.
Shortcomings in Oversight
The authority noted that the ICB’s failure to implement a sufficient risk-based framework for monitoring and supervising its members has heightened financial crime risks. The situation deteriorated further when the ICB decided to halt all inspections, both in-person and virtual, for a duration of nine months. This suspension severely limited the organization’s capacity to enforce compliance with AML guidelines, consequently amplifying vulnerabilities to money laundering within the sector.
Importance of AML Regulations
Therese Chambers, who serves as the joint executive director of enforcement and market oversight for the FCA, emphasized the importance of robust AML regulations in safeguarding the financial system from criminal activities, thereby protecting individuals, businesses, and trust in markets. “Effective AML supervision is crucial for these protective measures to function properly,” Chambers stated.
Future Reforms and Oversight
This incident highlights the FCA’s commitment to enforcing standards among professional body supervisors, ensuring their oversight of member organizations meets stringent expectations. In light of this, the government has proposed reforms aimed at establishing the FCA as the Single Professional Services Supervisor, which seeks to enhance strategies for combating illicit finance. However, the execution of these reforms will take time, and in the meantime, the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) will continue its efforts to assist professional bodies in adhering to AML standards.
