Proposed amendments to the Money Laundering Regulations: policy note and draft SI (2025)

Money Laundering Regulations: technical consultation policy note (September 2025)

September 2025

The draft Money Laundering

and Terrorist Financing (Amendment and

Miscellaneous Provision)

Regulations 2025

Policy note

September 2025

The draft Money Laundering

and Terrorist Financing (Amendment and

Miscellaneous Provision)

Regulations 2025

Policy note

© Crown copyright 2025 This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3. Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. This publication is available at: www.gov.uk/official-documents. Any enquiries regarding this publication should be sent to us at public.enquiries@hmtreasury.gov.uk ISBN: 978-1-917638-53-1 PU: 3553

Contents

Chapter 1 Introduction and context 7

Chapter 2 Summary of measures and policy intent 9

Chapter 3 Processing of Personal Data 15

Chapter 1

Introduction and context

Background

1.1 Following a public consultation on ‘Improving the Effectiveness

of the Money Laundering Regulations’1, the government is bringing forward targeted amendments to close regulatory loopholes, address proportionality concerns, and account for evolving risks in relation to money laundering and terrorist financing. The consultation highlighted specific weaknesses in the UK’s regime, including issues with pooled client accounts, trust registration, cryptoasset business regulation, and the practicalities of customer due diligence.

1.2 This Statutory Instrument is one part of the government’s

response2 to those concerns, aiming to deliver a more risk-based, proportionate regime that is robust against financial crime whilst remaining workable for industry. The government has also committed to improve sectoral guidance on AML/CTF compliance on a range of issues, and to publish separate guidance on the use of digital identity verification for AML/CTF purposes.

Purpose of this note

1.3 This policy note accompanies the draft Money Laundering and

Terrorist Financing (Amendment and Miscellaneous Provision)

Regulations 2025 (“the SI”), which is published alongside this note for technical consultation. The SI comprises amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) and related legislation. 1.4 HM Treasury invites feedback from regulated firms, supervisors, other government departments and interested stakeholders on the practical operability, clarity, and effectiveness of the draft provisions. This is a draft SI and should not be treated as final. It is being published for technical checks, such as any significant errors or oversights in the legal drafting that would mean that the provisions in this SI would not achieve the desired outcomes explained in this note, or that could lead to other significant unintended consequences. The drafting approach,

https://assets.publishing.service.gov.uk/media/65e9e1813649a2001aed6492/HM_Treasury_Consultation_on_Improving_the_Effectiveness_of_the_Money_Laundering_Regulations.pdf

2 https://assets.publishing.service.gov.uk/media/6878c1b42bad77c3dae4dd25/MLRs_Consultation_Response.pdf

and other technical aspects of the proposal, may therefore change before the final instrument is laid before Parliament.

Next Steps

1.5 This technical consultation is open for four weeks, closing on 30

September 2025. HM Treasury welcomes comments on the technical effectiveness and practical implementation of the SI, including any unintended consequences or areas of ambiguity. Subject to feedback and Parliamentary scheduling, the final instrument is expected to be laid in early 2026 and will come into force 21 days after being made, with specific provisions for cryptoasset businesses aligned to the commencement of the FSMA cryptoasset perimeter.

1.6 Responses should be sent to: Anti-

MoneyLaunderingBranch@hmtreasury.gov.uk

Chapter 2

Summary of measures

and policy intent

2.1 Below is a summary of the principal measures in the SI, each

accompanied by its policy intent. Unless otherwise specified, references to regulations are references to regulations in the SI. The measures are grouped in this note according to the chapter of the consultation response in which they were set out.

Making customer due diligence more

proportionate and effective Customer Due Diligence (CDD) triggers for letting agents and art market participants (Regulations 13(f) and (h)(i)) Policy intent: Ensure CDD triggers are clear and consistent across all sectors. • The SI aligns transaction-based CDD requirements for letting agents and art market participants with those for high value dealers. Onboarding of customers in bank insolvency scenarios (Regulations 15, 16 and 17) Policy intent: Facilitate continued access to banking services for customers following a bank or building society insolvency event, while maintaining AML safeguards. • New provisions allow credit institutions, in specific circumstances following a bank insolvency, to verify the identity of customers from insolvent banks after account opening, providing ID verification is completed as soon as practicable. • Use of this exception is subject to safeguards including that onboarding firms must notify the FCA so that it can supervise accordingly; the exception cannot be used for customers who would be subject to enhanced due diligence measures (i.e. who present a high risk of money laundering or terrorist financing); and use of the exception for personal customers is only permitted where the bank insolvency has led to a delay to ID verification timescales.

Enhanced Due Diligence

Policy Intent: Ensure enhanced due diligence measures are targeted, evidence-based, and proportionate, so that firms can focus their efforts

on the transactions and jurisdictions that present the greatest risk. This should improve the effectiveness of the UK’s anti-money laundering regime, reduce unnecessary burdens on business, and ensure that resources are used where they have the greatest impact.

High-Risk Third Countries (Regulations 18(b) and 22)

• The SI updates when EDD is required in relation to a person or transaction linked to a specific country. Firms are currently required to apply EDD to transactions or customers involving “high-risk third countries”, which is in turn defined as any country on the FATF’s ‘increased monitoring’ and ‘call for action’ lists. The SI narrows this to focus specifically on “FATF call for action countries”. i.e. only countries on the ‘call for action’ list. This ensures firms can direct their resources to jurisdictions which present the greatest risk to the UK.

Complex and large transactions (Regulations 10,11 and 18(a))

• The MLRs currently require firms to apply EDD to all “complex or unusually large” transactions. However, this wording leads to confusion and, in some sectors, an overly cautious approach. • The SI clarifies that enhanced due diligence is required only for transactions that are “unusually complex or unusually large” relative to what is typical for the sector or the nature of the transaction. This change does not introduce a new obligation but rather refines the existing requirement to ensure that firms can focus their compliance efforts on transactions that present genuinely higher risks, rather than expending resources on routine transactions that do not warrant additional scrutiny.

Pooled Client Accounts (PCAs) (Regulations 14 and 20)

Policy intent: Increase the supply and accessibility of PCAs for businesses with a legitimate need, while maintaining robust risk-based controls. • The SI decouples PCAs from the simplified due diligence (SDD) framework, removing the requirement for banks to treat PCAs as “low risk” or only offer them to AML/CTF-regulated customers. • A new provision requires all financial and credit institutions to take reasonable measures to understand the purpose of the PCA, gather sufficient information about the customer’s business, and assess the risk associated with the account. Banks must obtain further information and consider imposing additional controls on the PCA where appropriate to manage risk. • Holders of PCAs must, on request, provide the bank with information about the identity of persons whose funds are held in the account (i.e. the underlying customers). This is intended to ensure transparency and facilitate effective oversight, without requiring banks to conduct CDD on all underlying customers.

Strengthening system coordination

Information sharing (Regulations 27, 28(b), 29 and 30)

Policy intent: Strengthen cooperation and information sharing between AML/CTF supervisors and other public bodies. • The SI includes Companies House within the scope of the duty to cooperate obligations among AML supervisors, recognising

Companies House’s enhanced role as a gatekeeper for corporate

transparency and as an integral part of the UK’s AML supervisory framework. • The SI adds the Financial Regulators Complaints Commissioner to the list of relevant authorities eligible for information sharing under the regulations, facilitating more effective cooperation and oversight in the AML framework. • The SI makes two minor changes to MLRs Regulations 52A and 52B, which cover the disclosure by the FCA of confidential information relating to MLRs supervision. This expands the scope of confidential information which the FCA is empowered to share in the course of delivering its functions under the MLRs to include information about MLRs supervision of cryptoasset firms. The SI also amends the defence to the offence of breaching confidentiality obligations to align further with the defence for breaching the confidentiality restriction at s.348 of the Financial Services and Markets Act (FSMA).

Providing clarity on scope and registration

issues Currency thresholds and definitions (Regulations 4(b) and (c), 7, 8, 9(b), 13(a) to (e), (g), (h)(ii) and (j), 21, 32 and 33) Policy intent: Simplify compliance by reducing conversion complexity and reflect UK market practice post-EU exit. • The SI converts all monetary thresholds for customer due diligence, reporting, and transaction triggers from euros to sterling (e.g. €10,000 becomes £10,000), with some thresholds adjusted to ensure the UK continues to meet international standards set by the Financial Action Task Force. • It also updates the general interpretation regulation in the MLRs to reflect these changes. Regulation of sale of off-the-shelf companies by Trust and Company

Service Providers (TCSPs) (Regulation 6)

Policy intent: Close a gap in the MLRs by ensuring that CDD is carried out across the full range of TCSP services. • The SI brings the activity of selling “off-the-shelf firms” within the scope of regulated activities for TCSPs, meaning that TCSPs

selling off-the-shelf firms must now comply with MLRs obligations, including customer due diligence and ongoing monitoring. Registration and change in control for cryptoasset service providers (regulations 31, 37 and 38) Policy intent: Amend the registration and change in control thresholds for cryptoasset firms to align with thresholds in the Financial Services and Markets Act (FSMA), delivering consistency across the cryptoasset sector and ensuring owners of cryptoasset firms involving complex ownership structures are not missed from fit and proper checks. • The SI amends the scope of fit and proper tests for cryptoasset businesses registered under the MLRs for the purposes of registration (Regulation 54(1A) of the MLRs) and change in control (Regulation 60(B) and Schedule 6B of the MLRs). • Regulation 31 applies to registration and amends the fit and proper test to require the FCA to assess whether the applicant's controller (within the meaning of section 422 of FSMA) is a fit and proper person. This will replace the requirement for the FCA to assess the applicant's beneficial owner.

2.2 Regulation 31 will commence when the forthcoming FSMA

cryptoasset authorisation regime comes into force3. The FCA would however continue to apply the fit and proper test to a beneficial owner where the cryptoasset business is registered under the MLRs before the new regime and the FCA is considering cancelling the registration under regulation 60 of the MLRs (regulation 38).

2.3 Firms authorised under FSMA will no longer need to register

under the MLRs to avoid dual registration and reduce burden on firms. Registration under the MLRs for cryptoasset businesses will only apply to those who are not authorised under FSMA (those that meet the definition of a cryptoasset business under the MLRS but not under FSMA).

2.4 Regulation 37 applies to change in control, and substitutes a new

Schedule 6B into the MLRs. For cryptoasset businesses registered with

the FCA under the MLRs before FSMA comes into force, the SI will extend the category of persons required to give notice to the FCA for change of control. Beneficial owners will continue to be required to give notice, in addition to those who hold 10% or more of the shares or of the voting power, or can exercise significant influence over the management of the cryptoasset business. For cryptoasset businesses registered with the FCA under the MLRs after the FSMA cryptoasset authorisation regime comes into force, the category of persons required to give notice to the FCA for change of

3 See: https://www.gov.uk/government/publications/regulatory -regime-for-cryptoassets-regulated-activities- draft-si-and-policy-note

control will align with the FSMA controller definition to ensure alignment between the two regimes

Reforming registration requirements for the

Trust Registration Service

Trust Registration Service (Regulations 23, 24, 25, 26 and 35) Policy intent: Improve the effectiveness of the Trust Registration Service by closing loopholes that could be leveraged to obscure asset ownership, improving transparency of beneficial ownership of trusts with significant UK connections and refining registration requirements for other types of trust. • The SI expands the categories of trusts required to register on the Trust Registration Service, bringing additional types of trusts within scope while introducing new exclusions for trusts that are low-value, low risk, inappropriate, or trusts related to estates administration. • The SI extends both the requirement to provide beneficial ownership information and for this information to be accessible for these newly in-scope trusts: increasing the transparency of trusts that own or control UK assets. • The SI removes the previous provision under which liability to Stamp Duty Reserve Tax (SDRT) automatically triggered a trust’s registration requirement; as a result, trusts will no longer need to register solely on the basis of SDRT liability.

Proposed further MLRs revisions

Policy intent: Make additional minor and technical changes to the MLRs in order to ensure consistency, clarity and a risk-based approach. • The SI clarifies and updates the exemptions for overseas sovereign wealth funds, specifying that funds operated by central banks or other public bodies are exempt from certain

AML requirements, in line with international practice and risk

assessments. (Regulations 2 and 9a) • The SI explicitly excludes reinsurance contracts from the definition of "insurance undertaking" for AML purposes, ensuring that reinsurance activities are not subject to requirements intended for direct insurance providers. (Regulation 5) • The SI inserts a new regulation 34A into the MLRs to require cryptoasset exchange providers and custodian wallet providers to apply enhanced due diligence in correspondent relationships. Correspondent relationships with shell banks are prohibited. This aligns UK requirements for cryptoasset businesses with FATF recommendations. (Regulation 19)

• The SI updates the list of recognised professional bodies to reflect recent organisational changes, ensuring that supervisory responsibilities and regulatory oversight remain current and accurate. (Regulation 34) • The SI amends MLRs Regulation 23 so that FCA-supervised money service businesses or trust and company service providers which have provided the FCA with information under that regulation are required to report to the FCA any inaccuracies in that information. This aligns with equivalent provisions in the draft Financial Services and Markets Act 2000 (Regulated

Activities and Miscellaneous Provisions) (Cryptoassets) Order

2025, and ensures that the FCA is kept up to date with relevant developments that may affect a firm’s risk profile or compliance status. (Regulation 12)

Chapter 3

Processing of Personal

Data

Data subjects

3.1 The personal data we will collect relates to individuals who

voluntarily respond to this consultation. These responses will come from a wide group of stakeholders with knowledge of a particular issue.

The personal data we collect

3.2 The personal data will be collected directly from data subjects

through voluntary email submissions in response to this consultation and are likely to include respondents’ names, email addresses, employers, job titles, telephone numbers, and opinions.

3.3 Respondents might include other types of personal data in their

response to this consultation where they feel that it is relevant to their response.

How we will use the personal data

3.4 This personal data will be processed for the purpose of obtaining

opinions about government policies, proposals, or an issue of public interest to inform the further development or implementation of the consultation subject.

3.5 Contact details you provide during this consultation will, in some

circumstances, be used to contact you to discuss your response further.

3.6 Processing of this personal data is necessary to help us

understand who has responded to this consultation and their opinion on the amendments to the MLRs instituted through the SI.

3.7 Consultation responses will be used to consider any appropriate

amendments to the draft legislation.

Lawful basis for processing the personal data

3.8 Article 6(1)(e) of the UK GDPR; the processing is necessary for the

performance of a task we are carrying out in the public interest. This task is consulting on the continued development of the SI.

Who will have access to the personal data

3.9 The personal data will only be made available to those with a

legitimate business need to see it as part of the consultation process.

3.10 There is no intention to share personal data collected during this

consultation with any other data controllers.

3.11 As the personal data is stored on our IT infrastructure, it will be

accessible to our IT service providers. They will only process this personal data for our purposes and in fulfilment with the contractual obligations they have with us.

How long we hold the personal data for

3.12 We will retain personal data contained within consultation

responses until work on the consultation is complete and no longer needed.

Your data protection rights

3.13 You have the following rights in relation to this activity: • request information about how we process your personal data and request a copy of it. • object to the processing of your personal data. • request that any inaccuracies in your personal data are rectified without delay. • request that your personal data are erased if there is no longer a justification for them to be processed. • request that we restrict the processing of your personal data in certain circumstances. • complain to the Information Commissioner’s Office if you are unhappy with the way in which we have processed your personal data.

How to submit a data subject access request (DSAR)

3.14 You can exercise your information rights - including requesting a

copy of personal data that HM Treasury holds about you - by contacting DSAR@HMTreasury.gov.uk. You will not be charged to exercise your information rights.

3.15 You can help us to process your request more effectively by

explaining what information you think HM Treasury holds about you.

3.16 We will usually need to verify your identity before we can provide

you with personal data, as such, you can assist us in actioning your request quickly by providing: • proof of identification (such as a copy of a passport or picture driving license) and • proof of address (such as copy of a bank statement or utility bill). • Please do not send original documents to us, copies or digital versions are sufficient.

Complaints

3.17 If you have concerns about Treasury’s use of your personal data, please contact our Data Protection Officer (DPO) in the first instance at: privacy@hmtreasury.gov.uk

3.18 If we are unable to address your concerns to your satisfaction, you can make a complaint to the Information Commissioner at casework@ico.org.uk or via the ICO website.

HM Treasury contacts

This document can be downloaded from www.gov.uk If you require this information in an alternative format or have general enquiries about HM Treasury and its work, contact:

Correspondence Team

HM Treasury

1 Horse Guards Road

London

SW1A 2HQ

Tel: 020 7270 5000 Email: public.enquiries@hmtreasury.gov.uk

Money Laundering Regulations: technical consultation policy note (September 2025)

Draft Regulations laid before Parliament under section 55(5)(d) of the Sanctions and Anti-Money Laundering Act 2018 (c. 2018), for approval by resolution of each House of Parliament.

DRAFT ST A TUT OR Y INSTRUMENTS

2025 No. ****

FINANCIAL SERVICES

The Money Laundering and Terrorist Financing (Amendment and

Miscellaneous Provision) Regulations 2025

*** - - - - Made

Coming into force in accordance with regulation 1

The Treasury, in exercise of the powers conferred by sections 49 and 54(2) of, and Schedule 2 to, the Sanctions and Money Laundering Act 2018(a) and section 38 of the Financial Services and Markets Act 2000(b), make the following Regulations. In accordance with section 55(5)(d) of the Sanctions and Anti-Money Laundering Act 2018 a draft of this instrument has been laid before Parliament and approved by a resolution of each House of Parliament.

PART 1

Introduction

Citation, commencement and extent

1. —(1) These Regulations may be cited as the The Money Laundering and Terrorist Financing

(Amendment and Miscellaneous Provision) Regulations 2025. (2) This regulation and regulation 2 come into force on [the day after the day on which these Regulations are made]. (3) Regulation 31 comes into force on [the date that is added to art 1(3) of the Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025]. (4) Regulation 37 is commenced on [first available date after SI made] for the purposes of paragraphs 1 to 3 of substituted Schedule 6B and paragraph 7 of that Schedule in so far as that relates to paragraphs 1 to 3. (a) 2018 c. 13. Section 49 was amended by paragraph 9 of Schedule 3 to the Sanctions and Anti-Money Laundering Act 2018 (c. 13) and by S.I. 2019/466, 2019/573 and 2019/577, as amended, in each case, by S.I. 2020/1289. See the definition of “appropriate Minister” in section 1(9) of the 2018 Act. (b) 2000 c. 8.

(5) Paragraphs 1 to 3 of substituted Schedule 6B and paragraph 7 of that Schedule in so far as that relates to paragraphs 1 to 3 are commenced on [first available date after SI made]. (6) Regulation 37 and substituted Schedule 6B are commenced for all other purposes [on the date that is added to art 1(3) of the Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025]. (7) Except as provided in paragraphs (2) to (6), these Regulations come into force 21 days after the day on which these Regulations are made. (8) These Regulations extend to England and Wales, Scotland and Northern Ireland.

PART 2

The Financial Services and Markets Act 2000 (Exemption) Order 2001 Amendment of the Financial Services and Markets Act 2000 (Exemption) Order 2001

2. In the Financial Services and Markets Act 2000 (Exemption) Order 2001(a), in Part 4 of

the Schedule (persons exempt in respect of particular regulated activities)— (a) omit paragraph 58 and the heading of that regulation; (b) at the appropriate place, insert— “Overseas sovereign wealth funds operated by a central bank or public body

59. Norges Bank is exempt from the general prohibition in respect of any regulated

activity of the kind specified by article 14, 21, 25, 37, 40 or 53 of the Regulated Activities Order (dealing in investments as principal, dealing in investments as agent, arranging deals in investments, managing investments, safeguarding and administering investments, and advising on investments).”.

PART 3

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 Amendment of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

3. The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer)

Regulations 2017(b) are amended in accordance with regulations 4 to 37. Amendment of Part 1: introduction

4. In regulation 3 (general interpretation)(c )—

(a) in paragraph (1), after the definition of “credit institution”, insert— ““cryptoasset business” has the meaning given by regulation 64B;”; (b) in paragraph (2)(a), for “euros” substitute “sterling”; (c) in paragraph (2)(b)— (a) S.I. 2001/1201. (b) S.I. 2017/692. (c) There have been amendments to regulation 3 but none are relevant.

(i) for “sterling (or any other currency)” substitute “another currency”; (ii) for “euros”, in both places it occurs, substitute “sterling”; (iii) omit “sterling or”; (iv) for “the euro” substitute “sterling”. Amendment of Part 2: Money Laundering and Terrorist Financing

5. In regulation 10(2)(b) (credit institutions and financial institutions)(a), after “long-term

insurance”, insert “other than reinsurance contracts”.

6. In regulation 12 (independent legal professionals and trust or company service providers)(b)—

(a) after paragraph (2)(a), insert— “(ab) selling an off-the-shelf firm”; (b) after paragraph (2), insert— “(3) In this regulation, an “off-the-shelf firm” means a firm that either: (a) does not carry on business; or (b) carries on business but such business is not the main activity carried on by the trust or company service provider.”. 7. In regulation 13(4)(b)(ii) (estate agents and letting agents)(c ), for “10,000 euros” substitute “£10,000”. 8. In regulation 14 (high value dealers, casinos, auctions platforms and art market participants)(d), for “10,000 euros”, in each place it occurs, substitute “£10,000”.

9. In regulation 15 (exclusions)—

(a) in paragraph 1(c), for “or 40 to 49” substitute “, 40 to 49 or 59”; (b) in paragraph (3)(b), for “1,000 euros” substitute “£1,000”.

10. In regulation 19(4)(a)(i)(aa) (policies, controls and procedures), for “complex or unusually

large” substitute “unusually complex or unusually large in each case given the nature of the transaction”. 11. In regulation 19A(4)(a)(i)(aa) (policies, controls and procedures in relation to proliferation financing)(e ), for “complex or unusually large” substitute “unusually complex or unusually large in each case given the nature of the transaction”. 12. In regulation 23 (requirement on authorised person to inform the FCA), after paragraph (3), insert— “(3A) If, at any time after an authorised person whose supervisory authority is the FCA (“A”) has provided the FCA with any information under this regulation— (a) there is a material change affecting any matter contained in that information; or (b) it becomes apparent to A that the information contains an inaccuracy, (a) Paragraph (2)(b) of regulation 10 was amended by S.I. 2019/253 and S.I. 2019/680. (b) Paragraph 2(a) of regulation 12 was substitued by S.I. 2022/860. (c) Paragraph (4) of regulation 13 was inserted by S.I. 2019/1511. (d) Paragraph (1)(d) of Regulation 14 was inserted by S.I. 2019/1511. (e) Regulation 19A was inserted by S.I. 2022/860.

then A must provide the FCA with details of the change or a correction of the inaccuracy within 30 days beginning with the date of the occurrence of the change or the discovery of the inaccuracy.”. Amendment of Part 3: Customer Due Diligence

13. In regulation 27 (customer due diligence)(a)—

(a) in paragraph (1)(b), for “1,000 euros” substitute “£800”; (b) in paragraph (2), for “15,000 euros” substitute “£12,000”; (c) in paragraph (3), for “10,000 euros” substitute “£10,000; (d) in paragraph (5), for “2,000 euros” substitute “£2,000; (e) in paragraph (7), for “2,000 euros” substitute “£2,000”; (f) in paragraph (7A), insert “occasional” after “any”; (g) in paragraph (7A)(ii), for “10,000 euros” substitute “£10,000”; (h) in paragraph (7C)(a)— (i) insert “occasional” after “any such” and for “or series of linked transactions,” substitute “whether executed in a single operation or in several operations which appear to be linked,”; (ii) for “10,000 euros” substitute “£10,000”; (i) in paragraph (7C)(b), for “10,000 euros” substitute “£10,000”; (j) in paragraph (7E), for “1000 euros” substitute “£800”. 14. In regulation 29 (additional customer due diligence measures: credit institutions and financial institutions)(b), after paragraph (9), insert— “(10) Paragraphs (11) to (17) apply if the relevant person is providing a customer with an account into which monies are pooled (“pooled account”). (11) Prior to providing a customer with a pooled account, the relevant person— (a) must have taken reasonable measures to understand the purpose of the pooled account and how the customer proposes to use it; (b) must have taken steps to be satisfied that the purpose and proposed use of the pooled account is consistent with the relevant person’s knowledge of the customer, the customer’s business and risk profile, and where it is not so satisfied, has conducted an updated assessment of, and where appropriate obtained further information on, the purpose and intended nature of the business relationship and the customer’s risk profile; and (c) having obtained any necessary additional information and being satisfied that the purpose and proposed use of the pooled account is consistent with the relevant person's knowledge of the customer, the customer's business and risk profile, must have assessed the level of risk of money laundering and terrorist financing associated with the customer using the pooled account and taken reasonable steps to manage and mitigate the risks arising from that use by the customer. (12) In assessing the management and mitigation of the risks associated with the use of the pooled account by the customer under paragraph (11), the relevant person must consider, (a) Paragraph (2) of regulation 27 was amended by S.I. 2019/1511 and S.I. 2022/860; paragraph (7A) and (7C) were inserted by S.I. 2019/1511; paragraph (7E) was inserted by S.I. 2022/860. (b) Regulation 29 has been amended but none of the amendments are relevant.

among other things, the appropriateness of imposing controls on the pooled account to manage and mitigate the risks. (13) The relevant person must be able to demonstrate to its supervisory authority that the extent of the measures it has taken to satisfy the requirements under paragraphs (11) and (12) are appropriate in view of the risks of money laundering and terrorist financing. (14) When a customer has a pooled account with a relevant person, the customer must make available to the relevant person, on request from the relevant person, information on the identity of the persons on whose behalf monies are held in the pooled account and information on the identity of any beneficial owners of those persons. (15) A customer which is provided with a pooled account by a relevant person must maintain accurate and up-to-date records in writing of all the monies that are paid in and out of the pooled account for a period of five years beginning on the date on which the customer knows, or has reasonable grounds to believe, that the transaction is complete. (16) The customer of the relevant person must on request provide information about itself and the management and use of any pooled account it has with the relevant person to any law enforcement authority. (17) A disclosure made under paragraph (13), (14) and (16) is not to be taken to breach any restriction, however imposed, on the disclosure of information.”. 15. In regulation 30(2) (timing of verification), after “Subject to paragraphs (3) and (4)”, insert “and regulation 30ZA”.

16. After regulation 30, insert—

“Insolvent bank customers 30ZA. —(1) A credit institution may verify the identity of an insolvent bank customer opening an account, any person purporting to act on behalf of that customer or any beneficial owner of that customer after— (a) establishing a business relationship with that customer; and (b) permitting that customer to open an account and transact from it. (2) Where a credit institution establishes a business relationship with an insolvent bank customer and permits that customer to open an account and transact from it in accordance with paragraph (1), the credit institution must complete the verification of identity of that customer as soon as practicable after contact is first established. (3) Paragraph (1) does not apply to an insolvent bank customer who is an individual, or any person purporting to act on behalf of that individual, unless— (a) it is not reasonably practicable for the credit institution to verify the individual’s identity (or that of the person purporting to act on their behalf) within its usual time frame for verification as a result of the volume of new customers seeking to open accounts; and (b) the credit institution reasonably considers that the volume of new customers is a result of the insolvency of the insolvent bank. (4) On the first occasion that a credit institution opens an account for an insolvent bank customer before verifying the identity of the customer, any person purporting to act on their behalf, or any beneficial owner of that customer, it must notify the FCA in writing within the period of seven days beginning with the day on which that customer’s account is opened.

(5) Where it becomes apparent to the credit institution that enhanced customer due diligence measures are required to be applied, the credit institution must not carry out any transactions from an insolvent bank customer’s account until verification of identity is complete. (6) In this regulation— ““insolvency date” means the date on which a bank insolvency order is made under section 94 of the Banking Act 2009(a); “insolvent bank” means either— (a) a bank as defined in section 2 of the Banking Act 2009 that has entered into the procedure in Part 2 of that Act; or (b) a building society as defined in section 119 of the Building Societies Act 1986(b) that has entered into the procedure in Part 2 of the Banking Act 2009, as applied and modified by section 90C of the Building Societies Act 1986; “insolvent bank customer” means any customer who a credit institution is reasonably satisfied was a depositor at an insolvent bank at the insolvency date where that customer (or a person purporting to act on their behalf) applies to open an account with the credit institution within the period of one month beginning with the insolvency date in respect of that insolvent bank.””.

17. In regulation 30A (requirement to report discrepancies in registers)(c )—

(a) in paragraph (1), for “Before” substitute “Subject to paragraph (9), before”; (b) after paragraph (8), insert— “(9) In relation to an insolvent bank customer of a type described in paragraph (1)(a) to (f), a credit institution may comply with the requirement in paragraph (1) after the establishment of a business relationship with that customer.”.

18. In regulation 33 (obligation to apply enhanced customer due diligence)(d)—

(a) in paragraph (1)(f)(i), for “complex or unusually large” substitute “unusually complex or unusually large in each case given the nature of the transaction”; (b) in paragraph (3)(a), for the definition of “high-risk third country” substitute— “a “FATF call for action country” means a country named on the list of High-Risk Jurisdictions subject to a Call for Action published by the Financial Action Task Force as such list has effect from time to time.”. 19. After regulation 34 (enhanced customer due diligence: credit institutions, financial institutions and correspondent relationships), insert— “Enhanced customer due diligence: cryptoasset exchange providers and custodian wallet providers 34A. —(1) A cryptoasset exchange provider or a custodian wallet provider (the “correspondent”) which has or proposes to have a correspondent relationship involving the (a) 2009 c. 1. (b) 1986 c. 53. (c) Regulation 30A was substituted by S.I. 2022/137; paragraph (1) was amended by S.I. 2022/860; paragrpah (8) was inserted by S.I. 2022/860. (d) Paragraph 33(1)(f) of regulation 33 was substituted by S.I. 2019/1511; paragraph (3)(a) was substituted by S.I. 2019/1511, S.I. 2021/392 and S.I. 2024/69.

execution of services of a type described in regulation 14A(1) or (2) including transactions in, or transfers of, cryptoassets with another provider providing similar services (the “respondent”) from a third country must, in addition to the measures required by regulation 33— (a) gather sufficient information about the respondent to understand fully the nature of its business; (b) determine from publicly-available information from credible sources the reputation of the respondent and the quality of the supervision to which the respondent is subject; (c) assess the respondent's controls to counter money laundering and terrorist financing; (d) obtain approval from senior management before establishing a new correspondent relationship; (e) document the responsibilities of the respondent and correspondent in the correspondent relationship; and (f) be satisfied that, in respect of those of the respondent's customers who have direct access to accounts with the correspondent, the respondent— (i) has verified the identity of, and conducts ongoing customer due diligence measures in relation to, such customers; and (ii) is able to provide to the correspondent, upon request, the documents or information obtained when applying such customer due diligence measures. (2) Cryptoasset exchange providers and custodian wallet providers must not enter into, or continue, a correspondent relationship with a shell bank. (3) Cryptoasset exchange providers and custodian wallet providers must take appropriate enhanced measures to ensure that they do not enter into, or continue, a correspondent relationship with a credit institution or financial institution which is known to allow its accounts to be used by a shell bank. (4) For the purposes of this regulation— (a) “cryptoasset” has the meaning given by regulation 14A(3)(a) (cryptoasset exchange providers and custodian wallet providers) and includes a right to, or interest in, the cryptoasset; (b) “correspondent relationship” means the relationships between and among cryptoasset exchange providers, custodian wallet providers, credit institutions and financial institutions including where similar services are provided by a correspondent to a respondent, and including relationships established for transactions in, or transfers of, cryptoassets; (c) “shell bank” has the meaning given by regulation 34(4)(b) and (c).”.

20. In regulation 37 (application of simplified customer due diligence)(a), omit paragraphs (5)

and (6).

21. In regulation 38 (electronic money)(b)—

(a) in paragraph (1)(a), for “150 euros” substitute “£150”; (b) in paragraph (1)(b)(ii), for “150 euros ”substitute “£150”; (c) in paragraph (2)(a), for “50 euros” substitute “£50”. (a) Paragraph (6) of regulation 37 was amended by S.I. 2019/253 and S.I. 2019/680. (b) Paragraph (1) and (2) of regulation 38 were substituted by S.I. 2019/1511.

Amendment of Part 4: Reliance and Record-keeping 22. In regulation 39(4) (reliance)(a), for “high-risk third country”, in both places it occurs, substitute “FATF call for action country”.

Amendment of regulation 42

23. In regulation 42(2)(b)(iii) (application of this Part)(b)—

(a) at the end of sub-paragraph (aa), omit “or”; (b) after sub-paragraph (aa), insert— “(aaa) acquired an interest in land in the United Kingdom before 6th October 2020 and continued to hold that interest up to and including on [X date]; or”.

Amendment of regulation 45

24. In regulation 45(14) (register of beneficial ownership)(c ), omit sub-paragraph (f).

Amendment of regulation 45ZA

25. —(1) Regulation 45ZA (register of beneficial ownership: additional types of trust)(d) is

amended as follows. (2) In paragraph (2)— (a) in sub-paragraph (b)— (i) omit the “or” at the end of paragraph (i); (ii) after paragraph (ii), insert— “; or” “(iii) acquired an interest in land in the United Kingdom before 6th October 2020 and continued to hold that interest up to and including on [X date];” (b) for sub-paragraph (c) substitute— “(c) a “type C trust” is a non-UK trust which is an express trust and is not listed in Schedule 3A, where none of the trustees are resident in the United Kingdom and those trustees, in their capacity as such— (i) acquire an interest in land in the United Kingdom; or (ii) acquired an interest in land in the United Kingdom before 6th October 2020 and continued to hold that interest up to and including on [X date].”. (3) In paragraph (5)— (a) in sub-paragraphs (a) and (b), for “(b) or (c)” substitute “(b)(i), (b)(ii) or (c)(i)”; (b) after sub-paragraph (a), insert— “(aa) on or before [6 months after X date], in the case of a trust which falls within paragraph (1)(b)(iii) or (c)(ii);”. (a) Paragraph (4) of regulation 39 was substituted by S.I. 2021/392. (b) Paragraph (2)(b) of regulation 42 was amended by S.I. 2020/991. (c) Paragraph (14) of regulation 45 was amended by S.I. 2018/1237. (d) Regulation 45ZA was inserted by S.I. 2020/991 and was amended by S.I. 2022/137.

Amendment of regulation 45ZB

26. In regulation 45ZB (access to information on the register)(a), in paragraphs (3) and (8), for “or a type B trust” substitute “, a type B trust or a type C trust”. Amendment of Part 6: Money Laundering and Terrorist Financing: Supervision and

Registration

27. In regulation 50 (duty to co-operate)(b)—

(a) in paragraph (1)(a), after “the Treasury”, insert “, the registrar”; (b) in paragraph (1)(b), after “supervisory authorities”, insert “, the registrar”; (c) after paragraph (5), insert— “(6) A reference to the registrar in this regulation is to the registrar of companies within the meaning of section 1060(3) of the Companies Act 2006(c ).”.

28. In regulation 52 (disclosure by supervisory authorities and other relevant authorities)(d)—

(a) in paragraph (1)(b), omit “or”; (b) in paragraph (1)(c), for “functions.” substitute “functions; or”; (c) after paragraph (1)(c), insert— “(d) the functions of the Financial Regulators Complaints Commissioner in relation to the complaints scheme in Part 6 of the Financial Services Act 2012.”; (d) in paragraph (1A), for “(e) or (f)” substitute “(e), (f) or (g)”; (e) in paragraph (1B), for “(e) or (f)” substitute “(e), (f) or (g)”; (f) after paragraph (5)(f), insert— “(g) the Financial Regulators Complaints Commissioner.”.

29. In regulation 52A (obligation of confidentiality)(e )—

(a) in paragraph (2), for “credit institution or financial institution” substitute “credit institution, financial institution or cryptoasset business”; (b) in paragraph (3)(a)(iii), for “credit institutions and financial institutions” substitute “credit institutions, financial institutions and cryptoasset businesses”; (c) in paragraph (4)(a)— (i) for “a credit institution or a financial institution” substitute “a credit institution, a financial institution or a cryptoasset business”; (ii) for “credit institutions or financial institutions” substitute “credit institutions, financial institutions or cryptoasset businesses”; (d) in paragraph (4)— (i) sub-paragraph (b), for “credit or financial institution”, substitute “credit or financial institution or cryptoasset business”; (a) Regulation 45ZB was inserted by S.I. 2020/991 and was amended by S.I. 1986/595 (N.I. 4), S.S.I. 2005/465 and by S.I. 2022/860. (b) Paragraph (4) of regulation 50 was amended by S.I. 2019/680 and S.I. 2019/253. (c) 2006 c. 46. (d) Paragraph (5)(f) of regulation 52 was inserted by S.I. 2022/860. (e) Paragraph 3(a) of regulation 52A was substituted by S.I. 2022/860; paragraph 4(b) of regulation 54A was substituted by S.I. 2020/628.

(ii) sub-paragraph (b)(i), for “credit institutions or financial institutions” substitute “credit institutions, financial institutions or cryptoasset businesses”; (iii) sub-paragraph (b)(ii), for “credit institutions or financial institutions” substitute “credit institutions, financial institutions or cryptoasset businesses”; (e) in paragraph (7), for “credit institutions or financial institutions” substitute “credit institutions, financial institutions or cryptoasset businesses”. 30. In regulation 52B(3)(a) (obligation of confidentiality: offence)(a), for “; and” substitute “; or”.

31. In regulation 58A (fit and proper person test: cryptoasset businesses)(b)—

(a) in paragraph (2), for “beneficial owner” substitute “controller”; (b) after paragraph (4), insert— “(5) In this regulation “controller” has the meaning given by section 422 FSMA.”. Amendment of Part 7A: Cryptoasset Transfers 32. In regulation 64C(4) (information accompanying an inter-cryptoasset business transfer)(c ), for “1000 euros” substitute “£800”.

33. In regulation 64G(1)(b) (requesting information: unhosted wallet transfers and cryptoasset

businesses)(d), for “1000 euros” substitute “£800”. Amendment of Schedule 1: Professional Bodies 34. In Schedule 1 (professional Bodies), for “International Association of Bookkeepers” substitute “Institute of Accountants and Bookkeepers”.

Amendment of Schedule 3A

35. —(1) Schedule 3A (excluded Trusts)(e ), is amended as follows. (2) After paragraph 8, insert— “8A. A trust created under a deed or instrument which— (a) varies any of the dispositions of property comprised in a person’s estate on death; (b) was made by the persons or any of the persons who benefit or would benefit from the dispositions, and less than two years has passed since that person’s death.”. (3) After paragraph 9, insert— “9A. A trust which ceases to be an excluded trust under paragraph 9 of this Schedule where— (a) the sole reason for paragraph 9 ceasing to apply is the death of one of the trustees, and (b) less than two years has passed since that person’s death. (a) Regulation 52B was inserted by S.I. 2019/1511. (b) Regulation 58A was inserted by S.I. 2019/1511. (c) Regulation 64C was inserted by S.I. 2022/860. (d) Regulation 64G was inserted by S.I. 2022/860. (e) Schedule 3A was inserted by S.I. 2020/991. There are amendments to this Schedule not relevant to these Regulations.

9B. A trust which ceases to be an excluded trust under paragraph 1 of this Schedule where— (a) the trust had been an excluded trust by virtue of section 34 of the Trustee Act 1925(a). (b) the sole reason for paragraph 1 ceasing to apply is the death of one of the trustees; and (c) less than two years has passed since that person’s death.

Revocation of survivorship destination trusts

9C. A trust created under a deed or instrument which— (a) revokes a survivorship destination in respect of common property in Scotland; and (b) provides that from the date of execution of the deed or instrument the common property is held in trust for the common owners equally between them and for their respective executors and assignees.”. (4) After paragraph 23, insert— “General exclusion 23A. —(1) A trust which was created on or after [X date] and satisfies all of the conditions in sub-paragraph (2). (2) The conditions referred to in sub-paragraph (1) are that the trust— (a) does not hold any interest in land in the United Kingdom; (b) does not hold assets of appreciable worth with a value exceeding £2,000 in total; (c) has not held property with a cumulative total value exceeding £10,000 since the date on which it was created; and (d) does not have an income exceeding £5,000 per annum. (3) This paragraph does not apply to a trust which is not the first UK express trust that is an excluded trust under this Schedule created by the settlor during the lifetime of that settlor. (4) In this paragraph “assets of appreciable worth” includes works of art, antiques, collectibles, jewellery and other non-financial assets capable of appreciating in value.”. Amendment of Schedule 6: Meaning of “relevant requirement”

36. In Schedule 6 (meaning of “relevant requirement”)(b)—

(a) after paragraph (7)(d), insert— “(dza) regulation 30ZA (insolvent bank customers);”; (b) after paragraph (7)(g), insert— “(ga) regulation 34A (enhanced customer due diligence: cryptoasset exchange providers and custodian wallet providers)”. (a) 1925 c. 19. Section 34 was amended by the Trusts of Land and Appointment of Trustees Act 1996 (c. 47). (b) Paragraph (7)(d) of schedule 6 was inserted by S.I. 2019/1511.

Amendment of Schedule 6B: Changes in Control of Registered Cryptoasset Businesses

37. For Schedule 6B (changes in control of registered cryptoasset businesses)(a) substitute—

Regulation 60B “SCHEDULE 6B

Changes in Control of Registered Cryptoasset Businesses

Modifications: Control over registered cryptoasset exchange providers and registered custodian wallet providers – pre- FSMA authorisation providers

1. This paragraph applies to a registered cryptoasset exchange provider or a registered

custodian wallet provider that is included in the register before [the date that is added to art 1(3) of the Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025].

2. Part 12 of FSMA (control over authorised persons)(b) applies, with the modifications

specified in paragraph 3, to an acquisition of, an increase, reduction or cessation of control over a cryptoasset business to which paragraph 1 applies.

3. The modifications specified in this paragraph are—

(a) references to a “UK authorised person” are to be read as references to a registered cryptoasset exchange provider or registered custodian wallet provider to which Part 12 of FSMA does not otherwise apply; (b) references to “appropriate regulator” and “each regulator” are to be read as references to the FCA; (c) section 178 (obligation to notify the appropriate regulator: acquisitions of control)(c ) is to be read as if— (i) subsection (2ZA) were omitted; (ii) subsection (2A) were omitted; (d) section 181 (acquiring control)(d) is to be read as if for that section there were substituted— “181. For the purposes of this Part, a person (“A”) acquires control over a UK authorised person (“B”) if, should the acquisition proceed— (a) A would become a beneficial owner of B or a parent undertaking of B (“P”), within the meaning of regulations 5 or 6 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017; or (b) if sub-paragraph (a) does not apply A would— (i) hold 10% or more of the shares in B or P; (ii) hold 10% or more of the voting power in B or P; or (iii) would otherwise hold shares or voting power in B or P (a) Schedule 6B was inserted by S.I. 2022/680. (b) 2000 c. 8. (c) Subsection (2ZA) was added by S.I. 2018/135; subsection (2A) was added by section 26(1) and (3) of the Financial Services Act 2012 (c. 21). (d) Section 181 was substituted by S.I. 2009/534.

as a result of which A is able to exercise significant influence over the management of B.” (e) section 182 (increasing control)(a) is to be read as if for that section there were substituted— “(1) For the purposes of this Part, a person (“A”) increases control over a UK authorised person (“B”) if, should the increase in control proceed— (a) A would become a beneficial owner of B or a parent undertaking of B (“P”), within the meaning given by regulations 5 or 6 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017; or (b) if sub-paragraph (a) does not apply— (i) the percentage of shares which A holds in B or P would increase by any of the steps mentioned in subsection (2); (ii) the percentage of voting power A holds in B or P would increase by any of the steps mentioned in subsection (2); or (iii) A becomes a parent undertaking of B. (2) The steps are— (a) from less than 20% to 20% or more; (b) from less than 30% to 30% or more; (c) from less than 50% to 50% or more.” (f) section 183 (reducing or ceasing to have control)(b) is to be read as if for that section there were substituted— “(1) For the purposes of this Part, a person (“A”) reduces control over a UK authorised person (“B”) if, should the decrease in control proceed— (a) A would cease to be a beneficial owner of B or a parent undertaking of B (“P”), within the meaning given by regulations 5 or 6 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017; or (b) if sub-paragraph (a) does not apply— (i) the percentage of shares which A holds in B or P would decrease by any of the steps mentioned in subsection (2); (ii) the percentage of voting power A holds in B or P would decrease by any of the steps mentioned in subsection (2); or (iii) A ceases to be a parent undertaking of B. (2) The steps are— (a) from 50 % or more to less than 50%; (b) from 30% or more to less than 30%; (c) from 20% or more to less than 20%. (3) For the purposes of this Part, a person (“A”) ceases to have control over a UK authorised person (“B”) if— (a) Section 182 was substituted by S.I. 2009/534. (b) Section 183 was substituted by S.I. 2009/534.

(a) A ceases to be a beneficial owner of B or a parent undertaking of B (“P”), within the meaning given by regulations 5 or 6 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017; or (b) if sub-paragraph (a) does not apply, A ceases to be in the position of holding— (i) 10% or more of the shares in B or in a parent undertaking of B (“P”); (ii) 10% or more of the voting power in B or P; or (iii) shares or voting power in B or P as a result of which A is able to exercise significant influence over the management of B.” (g) section 184 (disregarded holdings)(a) is to be read as if subsections (4) to (10) were omitted; (h) section 185 (assessment: general)(b) is to be read as if— (i) in subsection (2)(a), “and the financial soundness of the acquisition” were omitted; (ii) in subsection (3)(a), for “matters” there were substituted “matter”; (i) section 186 (assessment criteria)(c ) is to be read in relation to a section 178 notice-giver who falls within— (i) section 181(a) as modified by paragraph 3(d) of this Schedule; or (ii) section 182(1)(a) as modified by paragraph 3(e) of this Schedule as follows— “Assessment criteria

186. The matter specified in section 185(3)(a) is whether the section 178

notice-giver is a fit and proper person within the meaning given by of regulation 58A of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (fit and proper test: cryptoasset businesses).” (j) section 187 (approval with conditions)(d) is to be read as if subsection (2)(b) were omitted; (k) section 187A (assessment: consultation by PRA with FCA)(e ) is to be disregarded; (l) section 187B (assessment: consultation by FCA with PRA)(f ) is to be disregarded; (m) section 187C (variation etc of conditions)(g) is to be disregarded; (n) section 189 (assessment: procedure)(h) is to be read as if— (i) subsections (1A), (1ZB) and (1B) were omitted; (ii) in subsection (6), “Unless section 190A applies” were omitted; (a) Section 184 was substituted by S.I. 2009/534. (b) Section 185 was substituted by S.I. 2009/534. (c) Section 186 was substituted by S.I. 2009/534. (d) Section 187 was substituted by S.I. 2009/534; subsection (2) was substituted by section 26(1) and (5) of the Financial Services Act 2012. (e) There have been amendments to section 187A but none are relevant. (f) There have been amendments to section 187B but none are relevant. (g) There have been amendments to section 187C but none are relevant. (h) Section 189 was substituted by S.I. 2009/534 and amended by s.26(1) and (2) of the Financial Services Act 2012. There are other amendments but none are relevant.

(o) section 190 (requests for further information)(a) is to be read as if subsections (1A) and (4)(b) were omitted; (p) section 190A (assessment and resolution)(b) is to be disregarded; (q) section 191A (objection by the appropriate regulator)(c ) is to be read as if— (i) in subsection (2)(c), for “matters in” there were substituted “matter specified in”; (ii) subsection (4A) were omitted; (r) section 191B (restriction notices)(d) is to be read as if— (i) in subsection (2)(a), after “voting power” there were inserted “or otherwise being a beneficial owner (within the meaning of regulations 5 or 6 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017) of the UK authorised person (“B”) or a parent undertaking of B”; (ii) in subsection (2)(b), “in relation to the shares or voting power,” were omitted; (iii) subsection (2A) were omitted; (iv) after subsection (3) there were inserted— “(3ZA) In a restriction notice, the appropriate regulator may direct that, in respect of a beneficial owner of a UK authorised person (“B”) or a parent undertaking of B, until further notice, no influence over the management or activities of B is to be exercisable by the beneficial owner.” (v) subsection (3A) were omitted; (vi) in subsection (6)(b), after “held in” there were inserted “, or beneficial ownership of,”; (s) section 191C (orders for sale of shares)(e ) is to be read as if— (i) subsections (2A), (7) and (8) were omitted; (ii) in subsection (2B) for “Where the appropriate regulator is the FCA it” there were substituted “the FCA”; (t) section 191D (obligation to notify the appropriate regulator: dispositions of control)(f ) is to be read as if subsection (1A) were omitted; (u) section 191F (offences under this Part)(g) is to be read as if— (i) in subsection (2), “or section 190A applies” were omitted; (ii) subsection (4A) were omitted; (iii) for subsections (8) and (9) there were substituted— (a) Section 190 was substituted by S.I. 2009/534; subsection (1A) was inserted by S.I. 2014/3329 and S.I. 2017/43; subsection (4)(b) was substituted by S.I. 2019/632. (b) There have been amendments to section 190A but none are relevant. (c) Section 191A was substituted by S.I. 2009/534; subsection (2) was substituted by section 26(1) and (2) of the Financial Services Act 2012; subsection (4A) was inserted by section 26(1) and (7) of that Act. There have been other amendments but none are relevant. (d) Section 191B was substituted by S.I. 2009/534; subsection (2) was amended by section 26(1) and (2) of the Financial Services Act 2012; subsection (2A) was added by section 26(1) and (8) of that Act. There have been other amendments but none are relevant. (e) Section 191C was substituted by S.I. 2009/534; subsection (2A) was added by section 26(1) and (9) of the Financial Services Act 2012; subsection (2A) was added by section 26(1) and (8) of that Act; Subsections (7) and (8) were added by S.I. 2016/1239. There have been other amendments but none are relevant. (f) Section 191D was substituted by S.I. 2009/534. Subsection (1A) was added by section 26(1) and (10) of the Financial Services Act 2012. There have been other amendments but none are relevant. (g) Section 191F was substituted by S.I. 2009/534; subsection (2) was substituted by S.I. 2013/423 and inserted by S.I. 2016/1239; subsection (4A) was inserted by S.I. 2016/1239; subsections (8) and (9) were inserted by 2016/1239.

“(8) A person guilty of an offence under subsection (1) to (3) or (5) to (7) is liable— (a) on summary conviction— (i) in England and Wales, to a fine; (ii) in Scotland or Northern Ireland, to a fine not exceeding the statutory maximum; (b) on conviction on indictment, to a fine. (9) A person guilty of an offence under subsection (4) is liable— (a) on summary conviction— (i) in England and Wales, to a fine; (ii) in Scotland or Northern Ireland, to a fine not exceeding the statutory maximum; (b) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both.”; (iv) after subsection (9) there were inserted— “(10) A person is not guilty of an offence under this section if that person took all reasonable steps and exercised all due diligence to avoid committing the offence.”; (v) section 191G (interpretation)(a) is to be read as if the definitions of “the appropriate regulator”, “qualifying credit institution” and “UK authorised person” were omitted. Modifications: Control over registered cryptoasset exchange providers and registered custodian wallet providers – post- FSMA authorisation providers

4. This paragraph applies to a registered cryptoasset exchange provider or a registered

custodian wallet provider that is included in the register on or after [the date that is added to art 1(3) of the Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025]

5. Part 12 of FSMA (control over authorised persons)(b) applies, with the modifications

specified in paragraph 6, to an acquisition of or an increase, reduction or cessation of control over a cryptoasset business to which paragraph 4 applies.

6. The modifications specified in this paragraph are—

(a) references to a “UK authorised person” are to be read as references to a registered cryptoasset exchange provider or registered custodian wallet provider to which Part 12 of FSMA does not otherwise apply; (b) references to “appropriate regulator” and “each regulator” are to be read as references to the FCA; (c) section 178 (obligation to notify the appropriate regulator: acquisitions of control)(c ) is to be read as if— (i) subsection (2ZA) were omitted; (a) Section 191G was substituted by S.I. 2009/534 and amended by section 26(1) and (12) of the Financial Services Act 2012 and S.I. 2019/63. (b) 2000 c. 8. (c) Subsection (2ZA) was added by S.I. 2018/135; subsection (2A) was added by section 26(1) and (3) of the Financial Services Act 2012 (c. 21).

(ii) subsection (2A) were omitted; (d) section 184 (disregarded holdings)(a) is to be read as if subsections (4) to (10) were omitted; (e) section 185 (assessment: general)(b) is to be read as if in subsection (2)(a), “and the financial soundness of the acquisition” were omitted; (f) section 187 (approval with conditions)(c ) is to be read as if subsection (2)(b) were omitted; (g) section 187A (assessment: consultation by PRA with FCA)(d) is to be disregarded; (h) section 187B (assessment: consultation by FCA with PRA)(e ) is to be disregarded; (i) section 187C (variation etc of conditions)(f ) is to be disregarded; (j) section 189 (assessment: procedure)(g) is to be read as if— (i) subsections (1A), (1ZB) and (1B) were omitted; (ii) in subsection (6), “Unless section 190A applies” were omitted; (k) section 190 (requests for further information)(h) is to be read as if subsections (1A) and (4)(b) were omitted; (l) section 190A (assessment and resolution)(i ) is to be disregarded; (m) section 191A (objection by the appropriate regulator)(j ) is to be read as if— (i) in subsection (2)(c), for “matters in” there were substituted “matter specified in”; (ii) subsection (4A) were omitted. (n) section 191B (restriction notices)(k) is to be read as if subsection (2A) were omitted; (o) section 191C (orders for sale of shares)(l ) is to be read as if— (i) subsections (2A), (7) and (8) were omitted; (ii) for “Where the appropriate regulator is the FCA it” there were substituted “the FCA”; (p) section 191D (obligation to notify the appropriate regulator: dispositions of control)(m) is to be read as if subsection (1A) were omitted; (a) Section 184 was substituted by S.I. 2009/534 and amended by S.I. 2013/3115, 2015/1755 and 2019/534. (b) Section 185 was substituted by S.I. 2009/534 and amended by section 26(1) and (2) of the Financial Services Act 2012 (c. 21). (c) Section 187 was substituted by S.I. 2009/534; subsection (2) was substituted by section 26(1) and (5) of the Financial Services Act 2012. (d) There have been amendments to section 187A but none are relevant. (e) There have been amendments to section 187B but none are relevant. (f) There have been amendments to section 187C but none are relevant. (g) Section 189 was substituted by S.I. 2009/534 and amended by s.26(1) and (2) of the Financial Services Act 2012. There are other amendments but none are relevant. (h) Section 190 was substituted by S.I. 2009/534; subsection (1A) was inserted by S.I. 2014/3329 and S.I. 2017/43; subsection (4)(b) was substituted by S.I. 2019/632. (i) There have been amendments to section 190A but none are relevant. (j) Section 191A was substituted by S.I. 2009/534; subsection (2) was substituted by section 26(1) and (2) of the Financial Services Act 2012; subsection (4A) was inserted by section 26(1) and (7) of that Act. There have been other amendments but none are relevant. (k) Section 191B was substituted by S.I. 2009/534; subsection (2A) was added by section 26(1) and (8) of that Act. There have been other amendments but none are relevant. (l) Section 191C was substituted by S.I. 2009/534; subsection (2A) was added by section 26(1) and (9) of the Financial Services Act 2012; Subsections (7) and (8) were added by S.I. 2016/1239. There have been other amendments but none are relevant. (m) Section 191D was substituted by S.I. 2009/534. Subsection (1A) was added by section 26(1) and (10) of the Financial Services Act 2012. There have been other amendments but none are relevant.

(q) section 191F (offences under this Part)(a) is to be read as if— (i) in subsection (2), “or section 190A applies” were omitted; (ii) subsection (4A) were omitted; (iii) for subsections (8) and (9) there were substituted— “(8) A person guilty of an offence under subsection (1) to (3) or (5) to (7) is liable— (a) on summary conviction— (i) in England and Wales, to a fine; (ii) in Scotland or Northern Ireland, to a fine not exceeding the statutory maximum; (b) on conviction on indictment, to a fine. (9) A person guilty of an offence under subsection (4) is liable— (a) on summary conviction— (i) in England and Wales, to a fine; (ii) in Scotland or Northern Ireland, to a fine not exceeding the statutory maximum; (b) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both.”; (iv) after subsection (9) there were inserted— “(10) A person is not guilty of an offence under this section if that person took all reasonable steps and exercised all due diligence to avoid committing the offence.”; (r) section 191G (interpretation)(b) is to be read as if the definitions of “the appropriate regulator”, “qualifying credit institution” and “UK authorised person” were omitted.

Interpretation

7. In this Schedule—

““cryptoasset business” means a cryptoasset exchange provider or a custodian wallet provider; “cryptoasset exchange provider” has the meaning given by regulation 14A(1)(b)(c ); “custodian wallet provider” has the meaning given by regulation 14A(2)(d); “parent undertaking” has the meaning given by section 420 of the Financial Services and Markets Act 2000(e ); (a) Section 191F was substituted by S.I. 2009/534; subsection (2) was substituted by S.I. 2013/423 and inserted by S.I. 2016/1239; subsection (4A) was inserted by S.I. 2016/1239; subsections (8) and (9) were inserted by 2016/1239. (b) Section 191G was substituted by S.I. 2009/534 and amended by section 26(1) and (12) of the Financial Services Act 2012 and S.I. 2019/632. (c) Regulation 14A was inserted by S.I. 2019/1511. (d) Regulation 14A was inserted by S.I. 2019/1511. (e) 2000 c. 8. Section 420(1) was amended by S.I. 2008/948; sub-section (2)(b) was amended by S.I. 2019/632.

“registered cryptoasset exchange provider” means a cryptoasset exchange provider which is included in the register maintained by the FCA under regulation 54(1A) (duty to maintain registers of certain relevant persons)(a); “registered custodian wallet provider” means a custodian wallet provider which is included in the register maintained by the FCA under regulation 54(1A).””. Saving provision relating to amendment of regulation 58A of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

38. The amendments made by regulation 31 do not apply for the purposes of regulation 60 of

the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 to a cryptoasset exchange provider or custodian wallet provider that was included in the register maintained by the FCA under regulation 54(1A) of those Regulations(b) immediately before [the date that is added to art 1(3) of the Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025] and that continues to be included in that register on and after that date.

Name

Two of the Lords Commissioners of His Majesty’s Treasury Date (a) Regulation 54(1A) was inserted by S.I. 2019/1511. (b) Regulation 54(1A) was inserted by S.I. 2019/1511.

EXPLANATORY NOTE

(This note is not part of the Regulations) These Regulations amend the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692) (the “MLRs”) and the Financial Services and Markets Act 2000 (Exemption) Order 2001 (S.I. 2001/1201) (the “Order”). Regulation 2 amends the Schedule to the Order to delete paragraph 58 and insert at paragraph

59 of the Schedule an exemption in respect of overseas sovereign wealth funds (OSWFs) operated

by a central bank or public body. Regulation 4(a) amends regulation 3 of the MLRs to insert a definition of “cryptoasset business”. Regulation 4(b) amends regulation 3(2)(a) of the MLRs so that the reference to "euros" is replaced with "sterling"; regulation 4(c) amends regulation 3(2)(b) of the MLRs so that the currency conversion is expressed in relation to converting sterling instead of converting euros. Regulation 5 amends regulation 10(2)(b) of the MLRs to exclude reinsurance contracts from the definition of “insurance undertaking”. Regulation 6 amends regulation 12(2) of the MLRs to bring the service of selling an "off-the-shelf firm” (as defined in new regulation 12(3) of the MLRs) within scope of the services that a "trust or company service provider" provides. Regulations 7, 8, 9(b), 13(a) to (e), (g), (h)(ii), (i) and (j), 21, 32 and 33 replace references to euros in the MLRs with references to sterling. The references in euros are converted on a 1:1 basis (for example, €10,000 becomes £10,000), except where to do so would risk failing to meet Financial Action Task Force ("FATF") standards. For this reason, the reference in regulation 27(2) MLRs to "15,000 euros" is replaced with "£12,000"; the reference in regulation 27(7E) MLRs to "1000 euros" is replaced with "£800"; the reference in regulation 64C(4) MLRs to "1000 euros" is replaced with "£800"; and the reference in regulation 64G(1)(b) to "1000 euros" is replaced with "£800". Regulation 9(a) amends regulation 15 of the MLRs so that Parts 1 to 4, 6 and 8 to 11 of the MLRs will not apply to OSWFs operated by a central bank or public body listed in the Schedule to the Order when carrying out exempt activities. Regulations 10, 11 and 18(a) amend regulations 19, 19A and 33 of the MLRs so that a relevant person must apply enhanced customer due diligence measures and enhanced ongoing monitoring where a transaction is unusually complex or unusually large given the nature of the transaction. A relevant person must also establish and maintain policies, controls and procedures which provide for the identification and scrutiny of such cases. Regulation 12 amends regulation 23 of the MLRs so that an authorised person who has provided the FCA with information under that regulation is required to report to the FCA any inaccuracy in, or material change affecting, that information within 30 days beginning with the date of the occurrence of the change or discovery of the inaccuracy. Regulation 13(f) and (h)(i) amend regulation 27 of the MLRs so that the customer due diligence transaction-based triggers for letting agents and art market participants are aligned with the equivalent provisions for high value dealers.

Regulation 14 amends regulation 29 of the MLRs to require relevant persons providing a customer with a pooled account to undertake additional customer due diligence measures to understand the purpose of the pooled account and assess, manage and mitigate the level of money laundering and terrorist financing risk. Customers are required to maintain written records and provide information, on request, in respect of the pooled account. Regulation 15 amends regulation 30 of the MLRs so that the identity verification requirement in regulation 30(2) of the MLRs is made subject to the provisions in new regulation 30ZA. Regulation 16 inserts a new regulation 30ZA in the MLRs to create an exception to the customer verification requirement in regulation 30(2) of the MLRs. Its effect is that, subject to certain requirements and conditions, a credit institution may verify the identity of an insolvent bank customer (as defined in new regulation 30ZA(6)) after establishing a business relationship with that customer and permitting that customer to open an account and transact from it. The credit institution must instead complete the verification of identity as soon as practicable after contact is first established. This exception also applies to persons purporting to act on behalf of insolvent bank customers or beneficial owners of insolvent bank customers. However, it only applies to insolvent bank customers that are individuals (and persons purporting to act on their behalf) where it is not reasonably practicable for the credit institution to complete verification within its usual time frame due to the volume of new customers seeking to open new accounts, where this volume is caused by the insolvency of the bank in question. Under new regulation 30ZA(5), if it becomes apparent to the credit institution that enhanced customer due diligence measures are required to be applied, no transactions may be carried out for the insolvent bank customer until identity verification is complete. Regulation 17 amends regulation 30A of the MLRs so that a credit institution may comply with the requirement to report discrepancies in registers, if applicable, after establishing a business relationship with an insolvent bank customer (as defined in new 30ZA(6)). Regulations 18(b) and 22 amend regulations 33 and 39 of the MLRs to substitute the definition of "high-risk third country" for a new definition of "FATF call for action country". Regulation 19 inserts new regulation 34A in the MLRs which makes provision to require cryptoasset businesses to conduct counterparty due diligence when making transactions. This is consistent with Financial Action Task Force recommendations 13 (Correspondent Banking) and 15 (New technologies). Regulation 20 amends regulation 37 of the MLRs so that pooled accounts are removed from the application of simplified due diligence. Regulation 23 amends regulation 42(2)(b)(iii) of the MLRs to extend the requirement to register to trusts, other than excluded trusts, which acquired an interest in UK land before 6th October 2020 and continue to hold that interest at [DATE]. Regulation 24 omits Stamp Duty Reserve Tax (SDRT) from regulation 45(14) of the MLRs. This means that a liability to pay SDRT will not result in a trust becoming a taxable relevant trust that must be registered. Regulation 25 amends regulation 45ZA of the MLRs so that relevant trusts which acquired land before 6th October 2020 and continue to hold that interest at [DATE] are included in the definitions of "type B trust" and "type C trust". Regulation 26 extends the access to information provisions in regulation 45ZB of the MLRs to include type C trusts.

Regulation 27 amends the duty to cooperate in regulation 50 of the MLRs so that a supervisory authority must take such steps as it considers appropriate to co-operate with the registrar of companies in relation to the development and implementation of policies to counter money laundering and terrorist financing. A supervisory authority must also take such steps as it considers appropriate to co-ordinate activities to counter money laundering and terrorist financing with the registrar of companies. Regulation 28(b) amends regulation 52(5) of the MLRs to add the Financial Regulators Complaints Commissioner to the list of "relevant authorities" for the purposes of regulation 52. Regulation 29 amends regulation 52A of the MLRs so that all provisions in that regulation relating to credit institutions and financial institutions also extend to cryptoasset businesses. Regulation 30 amends regulation 52B(3) of the MLRs so that the defence to the offence in regulation 52B(1) of the MLRs no longer requires both 52B(3)(a) and (b) to be satisfied. Instead, the accused needs only to prove either one of 52B(3)(a) or (b). Regulation 31 amends the fit and proper test in regulation 58A of the MLRs. It replaces the requirement on the Financial Conduct Authority when considering an application to be included in a register maintained under regulation 54(1A) as a cryptoasset exchange provider or as a custodian wallet provider, to assess the beneficial owner of an applicant (within the meaning of regulation 5 or 6 of the MLRs), with a requirement to assess a controller of the applicant (within the meaning of section 422 of the Financial Services and Markets Act 2000). Regulation 34 amends Schedule 1 to the MLRs to reflect that the International Association of Bookkeepers has changed its name to the Institute of Accountants and Bookkeepers. Regulation 35 amends Schedule 3A to the MLRs to expand the list of excluded trusts which are not required to register. Regulation 36 amends Schedule 6 to the MLRs to expand the meaning of “relevant requirement” to include new regulations 30ZA and 34A. Regulation 37 substitutes a new Schedule 6B into the MLRs. Schedule 6B allows the Financial Conduct Authority to object to an acquisition or change in control of a registered cryptoasset business before the acquisition takes place, and to publish notices relating to such objection. This amendment relates to the changes made by [the Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions)(Cryptoassets) Order 2025 S.I. ###] which establishes a new financial services regulatory regime for cryptoassets. Paragraphs 1 to 3 of the

Schedule set out how the provisions of Part 12 of the Financial Services and Markets Act 2000

are to apply to a cryptoasset exchange provider or a custodian wallet provider that is registered under the MLRs before those regulatory changes take effect. Paragraphs 4 to 6 of the Schedule set out how Part 12 applies to a cryptoasset exchange provider or a custodian wallet provider that is registered under the MLRs after the regulatory changes take effect. Paragraph 7 sets out interpretation provisions that apply in both cases. Regulation 38 provides for a savings provision relating to the amendment of regulation 58A of the MLRs. [An impact assessment of the effect that this instrument will have on the costs of business, the voluntary sector and the public sector [will be] available from HM Treasury at 1 Horse Guards Road, London SW1A 2HQ.]