Regulation
FCA restricts 6 unregulated lenders over anti-money laundering failings
The UK Financial Conduct Authority placed restrictions on six Annex 1 lenders on October 23, preventing them from onboarding new customers over AML control failures.
Key points
- The FCA agreed voluntary restrictions with six Annex 1 registered lending firms across the UK.
- The firms are barred from onboarding new customers or extending credit until compliance weaknesses are resolved.
- The intervention follows supervisory assessments across roughly 900 registered Annex 1 institutions.
The UK Financial Conduct Authority imposed formal operational restrictions on six unregulated lending firms on Friday, October 23, following targeted supervisory assessments into their anti-money laundering controls and financial crime defenses.
The affected entities operate under Annex 1 of the Money Laundering Regulations, which requires firms carrying out specific lending and leasing activities to register with the FCA for anti-money laundering supervision. The regulator agreed voluntary requirements with Kingscrown Finance, MOMSB, Momentus Capital, Grosvenor Funding, Grosvenor Funding North West, and Abbital. Under the terms, the firms cannot onboard new customers or increase existing credit facilities.
The regulatory intervention follows an extensive review by the watchdog across approximately 900 Annex 1 registered businesses. The FCA identified repeated failures in transaction monitoring, insufficient customer due diligence, and an overreliance on generic, off-the-shelf compliance policies that failed to address the firms' specific business models.
The FCA emphasized that registration under Annex 1 does not constitute full regulatory authorization under the Financial Services and Markets Act. Annex 1 entities are not subject to the regulator's conduct standards, and retail customers who deal with them do not have recourse to the Financial Ombudsman Service or the Financial Services Compensation Scheme.
Coinciding with the supervisory action, the regulator opened a consultation on updating its Financial Crime Guide, aiming to strengthen compliance expectations across non-bank lenders and cryptoasset firms operating in the United Kingdom.
