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

• (1) The Commissioners must offer a person (“P”) a review of a decision that has been notified to P if an appeal lies under this Chapter in respect of the decision.

• (2) The offer of a review must be made by notice given to P at the same time as the decision is notified to P.

• (3) This regulation does not apply to the notification of the conclusions of a review.

Review by the Commissioners

95

• (1) The Commissioners must review a decision if—

• (a) they have offered a review of the decision under this Chapter, and

• (b) the person concerned (“P”) notifies the Commissioners that P accepts the offer within 30 days from the date of the notice of the offer of a review.

• (2) P may not notify acceptance of the offer where P has already appealed against the decision to the tribunal under regulation 100.

• (3) The Commissioners must not review a decision if P has appealed to the tribunal under regulation 100 in respect of the decision.

Extensions of time

96

• (1) If under this Chapter the Commissioners have offered a person (“P”) a review of a decision the Commissioners may within the relevant period notify P that the relevant period is extended.

• (2) If notice is given, the relevant period is extended to the end of 30 days from—

• (a) the date of the notice; or

• (b) any other date set out in the notice or a further notice.

• (3) More than one notice may be given under paragraph (1).

• (4) In this regulation, “relevant period” means—

• (a) the period of 30 days referred to in regulation 95(1)(b); or

• (b) in the case where one or more notices have already been given under paragraph (1) the period as extended (or as most recently extended) in accordance with paragraph (2).

Review out of time

97

• (1) This regulation applies if—

• (a) the Commissioners have offered a review of a decision under this Chapter to a person (“P”); and

• (b) P does not accept the offer within the time allowed under regulation 95(1)(b) or 96(2).

• (2) The Commissioners must review the decision if—

• (a) after the time allowed, P notifies the Commissioners in writing requesting a review out of time;

• (b) the Commissioners are satisfied that P had a reasonable excuse for not accepting the offer of a review within the time allowed; and

• (c) the Commissioners are satisfied that P made the request without unreasonable delay after the excuse had ceased to apply.

Nature of review etc

98

• (1) This regulation applies if the Commissioners are required to undertake a review under regulation 95 or 97.

• (2) The nature and extent of the review are to be such as appear appropriate to the Commissioners in the circumstances.

• (3) For the purpose of paragraph (2), the Commissioners must, in particular, have regard to steps taken before the beginning of the review—

• (a) by the Commissioners in reaching the decision; and

• (b) by any person in seeking to resolve disagreement about the decision.

• (4) The review must take account of any representations made by the person (“P”) at a stage which gives the Commissioners a reasonable opportunity to consider them.

• (5) The review may conclude that the decision is to be—

• (a) upheld;

• (b) varied; or

• (c) cancelled.

• (6) The Commissioners must give P notice of the conclusions of the review and their reasoning within—

• (a) a period of 45 days beginning with the relevant date; or

• (b) such other period as the Commissioners and P may agree.

• (7) In paragraph (6), “relevant date” means—

• (a) in a case falling within regulation 95, the date the Commissioners received notification accepting the offer of a review from P; or

• (b) in a case falling within regulation 97, the date on which the Commissioners decided to undertake the review.

• (8) Where the Commissioners are required to undertake a review but do not give notice of the conclusions within the time period specified in paragraph (6), the review is to be treated as having concluded that the decision is upheld.

• (9) If paragraph (8) applies, the Commissioners must notify P of the conclusion which the review is treated as having reached.

Appeals against decisions of the Commissioners

99

• (1) A person may appeal to the tribunal in accordance with regulation 100 if the person is the subject of a decision by the Commissioners under—

• (a) regulation 25(2), to issue a direction;

• (b) regulation 58, to the effect that a person is not a fit and proper person (unless the decision is required by virtue of paragraph (3) of that regulation);

• (c) regulation 59(1), to refuse to register an applicant;

• (d) regulation 60, to suspend or cancel the registration of a registered person;

• (e) regulation 76, to impose a penalty or publish a censuring statement;

• (f) regulation 78(2), to impose a prohibition.

• (2) The provisions of Part 5 of the Value Added Tax Act 1994 (appeals), subject to the modifications set out in paragraph (3), apply in respect of appeals to the tribunal made under this regulation as they apply in respect of appeals made to the tribunal under section 83 of that Act (appeals) .

• (3) Part 5 of the Value Added Tax Act 1994 has effect as if sections 83A to 84 , 85A and 85B (appeals and reviews) were omitted.

• (4) The tribunal hearing an appeal under paragraph (1) has the power to—

• (a) quash or vary any decision of the Commissioners, including the power to reduce any penalty to such amount (including nil) as the tribunal thinks appropriate; and

• (b) substitute the tribunal's own decision for any decision quashed on appeal.

• (5) For the purpose of an appeal under this regulation, the meaning of “tribunal” is as defined in section 82 of the Value Added Tax Act 1994 (meaning of tribunal) .

Appeals against decisions of the Commissioners: procedure

100

• (1) Subject to paragraphs (2) to (4), an appeal under regulation 99 is to be made to the tribunal before—

• (a) the end of the period of 30 days beginning with the date of the notice notifying the decision to which the appeal relates; or

• (b) if later, the end of the relevant period (within the meaning of regulation 96).

• (2) In a case where the Commissioners are required to undertake a review under regulation 95—

• (a) an appeal may not be made until the conclusion date; and

• (b) any appeal is to be made within the period of 30 days beginning with the conclusion date.

• (3) In a case where the Commissioners are requested to undertake a review in accordance with regulation 97—

• (a) an appeal may not be made—

• (i) unless the Commissioners have notified the person concerned (“P”) as to whether or not a review will be undertaken; and

• (ii) if the Commissioners have notified P that a review will be undertaken, until the conclusion date;

• (b) any appeal where sub-paragraph (a)(ii) applies is to be made within the period of 30 days beginning with the conclusion date; and

• (c) if the Commissioners have notified P that a review will not be undertaken, an appeal may be made only if the tribunal gives permission to appeal.

• (4) In a case where regulation 98(8) applies, an appeal may be made at any time from the end of the period specified in regulation 98(6) to the date 30 days after the conclusion date.

• (5) An appeal may be made after the end of the period specified in paragraph (1), (2)(b), 3(b) or (4) if the tribunal gives permission to appeal.

• (6) In this regulation, “conclusion date” means the date of the notice notifying the conclusions of the review.

PART 11 — Miscellaneous Provisions

Recovery of charges and penalties through the court

101

Any charge or penalty imposed on a relevant person or on a payment service provider by the FCA or the Commissioners under these Regulations is a debt due from that person to the FCA or the Commissioners respectively, and is recoverable accordingly.

Costs of supervision

102

• (1) The FCA and the Commissioners may impose charges on—

• (a) applicants for approval under Chapter 3 of Part 2;

• (b) applicants for registration under Chapter 2 of Part 6;

• (c) relevant persons supervised by them;

• (d) payment service providers supervised by them;

• (e) professional bodies listed in Schedule 1, for which they undertake enforcement action in relation to relevant persons supervised by those professional bodies.

• (2) Charges levied under paragraph (1) must not exceed such amount as the FCA or the Commissioners (as the case may be) consider will enable them to meet any expenses reasonably incurred by them in carrying out their functions under these Regulations or for any incidental purpose (including any expenses reasonably incurred by them in undertaking enforcement action on behalf of a self-regulatory organisation).

• (3) Without prejudice to the generality of paragraph (2), a charge may be levied in respect of each of the premises at which the relevant person, the provider or a person connected with the relevant person or the provider carries on (or proposes to carry on) business or professional activities.

• (4) The FCA must in respect of each of its financial years pay to the Treasury any amounts received by the FCA during the year by way of penalties imposed under Part 9.

• (5) The Treasury may give directions to the FCA as to how the FCA is to comply with the duty under paragraph (4).

• (6) The directions may in particular—

• (a) specify the time when any payment is required to be made to the Treasury; and

• (b) require the FCA to provide the Treasury at specified times with information relating to penalties that the FCA has imposed under Part 9.

• (7) The Treasury must pay into the Consolidated Fund any sums received by them under this regulation.

• (8) In paragraph (2), “expenses” includes expenses incurred by a local weights and measures authority or the Department for the Economy pursuant to arrangements made for the purposes of these Regulations with the FCA or with the Commissioners—

• (a) by or on behalf of the authority; or

• (b) by the Department for the Economy.

Obligations on public authorities

103

• (1) The following bodies and persons must, if they know or suspect or have reasonable grounds for knowing or suspecting that a person is or has engaged in money laundering or terrorist financing, as soon as practicable, inform the NCA—

• (a) the Auditor General for Scotland;

• (b) the Auditor General for Wales;

• (c) the Bank of England;

• (d) the Comptroller and Auditor General;

• (e) the Comptroller and Auditor General for Northern Ireland;

• (f) the FCA;

• (g) the Gambling Commission;

• (h) the Official Solicitor to the Supreme Court;

• (i) the Pensions Regulator;

• (j) the PRA;

• (k) the Public Trustee;

• (l) the Secretary of State, in the exercise of his or her functions under enactments relating to companies and insolvency;

• (m) the Treasury, in the exercise of their functions under FSMA;

• (n) the Treasury Solicitor;

• (o) a designated professional body for the purposes of Part 20 of FSMA (provision of financial services by members of the professions);

• (p) a person or inspector appointed under section 65 (investigations on behalf of FCA) or 66 (inspections and special meetings) of the Friendly Societies Act 1992 ;

• (q) an inspector appointed under section 106 of the Co-operative and Community Benefit Societies 2014 (appointment of inspectors) or section 18 of the Credit Unions Act 1979 (power to appoint inspector);

• (r) an inspector appointed under section 431 (investigation of a company on its own application), 432 (other company investigations), 442 (power to investigate company ownership) or 446D (appointment of replacement inspectors) of the Companies Act 1985 ;

• (s) a person or inspector appointed under section 55 (investigations on behalf of FCA) or 56 (inspections and special meetings) of the Building Societies Act 1986 ;

• (t) a person appointed under section 167 (appointment of persons to carry out investigations), 168(3) or (5) (appointment of persons to carry out investigations in particular cases), 169(1)(b) (investigations to support overseas regulator) or 284 (power to investigate affairs of a scheme) of FSMA , or under regulations made under section 262(2)(k) (open-ended investment companies) of that Act , to conduct an investigation; and

• (u) a person authorised to require the production of documents under section 447 (Secretary of State's power to require production of documents) of the Companies Act 1985 , or section 84 of the Companies Act 1989 (exercise of powers by officer).

• (2) A disclosure made under paragraph (1) is not to be taken to breach any restriction, however imposed, on the disclosure of information.

• (3) Where a disclosure under paragraph (1) is made in good faith, no civil liability arises in respect of the disclosure on the part of the person by whom, or on whose behalf, it is made.

Suspicious activity disclosures

104

• (1) The NCA must make arrangements to provide appropriate feedback on the suspicious activity disclosures it has received at least once a year.

• (2) The feedback referred to in paragraph (1) may be provided by the NCA jointly with another person, or by another person on behalf of the NCA.

• (3) The feedback referred to in paragraph (1) may be provided in any form the NCA thinks fit.

• (4) In this regulation, a “suspicious activity disclosure” is a disclosure made to the NCA under—

• (a) Part 3 of the Terrorism Act 2000 (terrorist property) ;

• (b) Part 7 of the Proceeds of Crime Act 2002 (money laundering) .

The United Kingdom’s financial intelligence unit

104A

Schedule 6A makes provision in relation to the NCA in its capacity as the United Kingdom’s financial intelligence unit.

Disclosure by the Commissioners

105

• (1) The Commissioners may disclose to the FCA information held in connection with their functions under these Regulations if the disclosure is made for the purpose of enabling or assisting the FCA to discharge any of its functions under the Payment Services Regulations 2017 or the Electronic Money Regulations 2011 .

• (2) Information disclosed to the FCA under paragraph (1) may not be disclosed by the FCA or any person who receives the information directly or indirectly from the FCA except—

• (a) to, or in accordance with authority given by, the Commissioners;

• (b) with a view to the institution of, or otherwise for the purposes of, any criminal proceedings;

• (c) with a view to the institution of any other proceedings by the FCA, for the purposes of any such proceedings, or for the purposes of any reference to the Upper Tribunal under the Payment Services Regulations 2017; or

• (d) in the form of a summary or collection of information so framed as not to enable information relating to any particular person to be ascertained from it.

General restrictions

106

These Regulations do not authorise or require—

• (a) a disclosure in contravention of the data protection legislation; or

• (b) a disclosure which is prohibited by any of Parts 1 to 3 or 5 to 7 of the Investigatory Powers Act 2016 .

Transfers between the United Kingdom and the Channel Islands and the Isle of Man

107

In determining whether a person has failed to comply with any requirement in the funds transfer regulation, any transfer of funds between the United Kingdom and—

• (a) the Channel Islands; or

• (b) the Isle of Man;

is to be treated as a transfer of funds within the United Kingdom.

Review

108

• (1) The Treasury must from time to time—

• (a) carry out a review of the regulatory provision contained in these Regulations; and

• (b) publish a report setting out the conclusions of the review.

• (2) The first report must be published before 26th June 2022.

• (3) Subsequent reports must be published at intervals not exceeding 5 years.

• (4) Section 30(3) of the Small Business, Enterprise and Employment Act 2015 (provision for review) requires that a review carried out under this regulation must, so far as is reasonable, have regard to how—

• (a) the emission allowance auctioning regulation;

• (b) the fourth money laundering directive; and

• (c) the funds transfer regulation;

are implemented in other member States.

• (5) Section 30(4) of the Small Business, Enterprise and Employment Act 2015 requires that a report published under this regulation must, in particular—

• (a) set out the objectives intended to be achieved by the regulatory provision referred to in paragraph (1)(a);

• (b) assess the extent to which those objectives are achieved;

• (c) assess whether those objectives remain appropriate; and

• (d) if those objectives remain appropriate, assess the extent to which they could be achieved in another way which involves less onerous regulatory provision.

• (6) In this regulation, “regulatory provision” has the same meaning as in sections 28 to 32 of the Small Business, Enterprise and Employment Act 2015 (see section 32 of that Act).

Consequential amendments

109

Schedule 7 makes amendments relating to these Regulations.

Revocation and saving provisions

110

• (1) The old money laundering regulations and the old transfer of funds regulations are revoked.

• (2) The old money laundering regulations and the old transfer of funds regulations shall continue to have effect where the conduct constituting a contravention of one of those Regulations, or an offence under one of those Regulations began before the date on which these Regulations come into force.

• (3) Where the old money laundering regulations or the old transfer of funds regulations continue to have effect, a penalty or an offence under the relevant Part of these Regulations is not to have effect in such circumstances.

• (4) Where the conduct is found to have been committed over a period of two or more days, or at some point during a period of two or more days, it is to be taken for the purposes of paragraph (2) to have been begun on the earliest of those days.

• (5) The “old money laundering regulations” means—

• (a) the Money Laundering Regulations 2007 ;

• (b) the Money Laundering (Amendment) Regulations 2007 ;

• (c) the Money Laundering (Amendment) Regulations 2011 ;

• (d) the Money Laundering (Amendment) Regulations 2012 ; and

• (e) the Money Laundering (Amendment) Regulations 2015 .

• (6) The “old transfer of funds regulations” means the Transfer of Funds (Information on the Payer) Regulations 2007 .

SCHEDULE 1 — Professional Bodies

SCHEDULE 2 — Listed Activities

The activities ... are—

(2) Lending including, inter alia: consumer credit, credit agreements relating to immovable property, factoring, with or without recourse, financing of commercial transactions (including forfeiting). (3) Financial leasing. (4) Payment services as defined in regulation 2(1) of the Payment Services Regulations 2017, other than an account information service (within the meaning of that term in regulation 2(1) of those Regulations). (5) Issuing and administering other means of payment (e.g. travellers' cheques and bankers' drafts) .... (6) Guarantees and commitments. (7) Trading for own account or for account of customers in any of the following: (a) money market instruments (cheques, bills, certificates of deposit, etc.); (b) foreign exchange; (c) financial futures and options; (d) exchange and interest-rate instruments; (e) transferable securities. (8) Participation in securities issues and the provision of services relating to such issues. (9) Advice to undertakings on capital structure, industrial strategy and related questions and advice as well as services relating to mergers and the purchase of undertakings. (10) Money broking. (11) Portfolio management and advice. (12) Safekeeping and administration of securities. (14) Safe custody services. (15) Issuing electronic money.

SCHEDULE 3 — Relevant Offences

1

An offence under the Perjury Act 1911 .

2

An offence under section 89 of the Criminal Justice Act 1967 (false written statements tendered in evidence) .

3

An offence under section 20BB of the Taxes Management Act 1970 (falsification of documents) .

4

An offence under section 11 of the European Communities Act 1972 (EU offences) .

5

An offence under Article 10 of the Perjury (Northern Ireland) Order 1979 (false statutory declarations and other false unsworn statements) .

6

An offence under the Customs and Excise Management Act 1979 .

7

An offence under the Estate Agency Act 1979, or specified for the purposes of section 3 of that Act in the Estate Agents (Specified Offences) (No 2) Order 1991 .

8

An offence under any of sections 1 to 5 of the Forgery and Counterfeiting Act 1981 (counterfeiting offences).

9

An offence under section 35 of the Administration of Justice Act 1985 (penalty for pretending to be a licensed conveyancer or recognised body) .

10

An offence under section 11(1) (undischarged bankrupts) or 13 (criminal penalties) of the Company Directors Disqualification Act 1986 .

11

An offence under section 1, 2, 3, 3ZA or 3A of the Computer Misuse Act 1990 (computer misuse offences).

12

An offence under section 112 (false representations or obtaining benefit) or 114 (offences relating to contributions) of the Social Security Administration Act 1992 .

13

An offence under section 52 of the Criminal Justice Act 1993 (the offence of insider dealing).

14

An offence under the Value Added Tax Act 1994 .

15

An offence under section 44(2) of the Criminal Law (Consolidation) (Scotland) Act 1995 (false statement and declarations) .

16

An offence under the Data Protection Act 1998 .

17

An offence under the Terrorism Act 2000 .

18

An offence under paragraph 7(2) or (3) of Schedule 3 to the Anti-Terrorism, Crime and Security Act 2001 (offences).

19

An offence under the Money Laundering Regulations 2001 , the Money Laundering Regulations 2003 , the Money Laundering Regulations 2007 or under these Regulations.

20

An offence under section 35 of the Tax Credits Act 2002 (offence of fraud).

21

An offence under Part 7 (money laundering) or Part 8 (investigations) of, or listed in Schedule 2 (lifestyle offences: England and Wales), 4 (lifestyle offences: Scotland) or 5 (lifestyle offences: Northern Ireland) to, the Proceeds of Crime Act 2002 .

22

An offence under the Commissioners for Revenue and Customs Act 2005 .

23

An offence under the Terrorism Act 2006 .

24

An offence under section 1, 2, 6 or 7 of the Bribery Act 2010 (bribery).

25

An offence under section 45 of the Serious Crime Act 2015 (offence of participating in activities of organised crime gang).

26

An offence under Parts 1 (general privacy protections); 2 (lawful interception of communications), 3 (authorisations for obtaining communications data), 5 (equipment interference), 6 (bulk warrants) and 7 (bulk personal dataset warrants) of the Investigatory Powers Act 2016 .

27

An offence under section 45 (failure to prevent facilitation of UK tax evasion offences) or 46 (failure to prevent facilitation of foreign tax evasion offences) of the Criminal Finances Act 2017 .

27A

An offence under the Data Protection Act 2018, apart from an offence under section 173 of that Act.

28

An offence of cheating the public revenue.

29

An offence under the law of any part of the United Kingdom consisting of being knowingly concerned in, or in taking steps with a view to, the fraudulent evasion of tax.

30

Any offence which has deception or dishonesty as one of its components.

31

The common law offences of conspiracy to defraud and perverting the course of justice.

32

An offence of attempting, conspiring or inciting the commission of an offence specified in this Schedule.

33

An offence under section 44 of the Serious Crime Act 2007 of doing an act capable of encouraging or assisting the commission of an offence specified in this Schedule.

34

An offence of aiding, abetting, counselling or procuring the commission of an offence specified in this Schedule.

35

An act which—

• (a) constituted an offence under the law of a foreign country, and

• (b) would have constituted an offence under any of paragraphs 1 to 34 under the law of any part of the United Kingdom if it had been done—

• (i) in that part of the United Kingdom;

• (ii) by a person who is linked to part of the United Kingdom (within the meaning of paragraph 5(3) of Schedule 7A to the Proceeds of Crime Act 2002 (connection with relevant part of the United Kingdom) ); or

• (iii) as regards the United Kingdom.

SCHEDULE3AZA — Material Discrepancies

A material discrepancy in this Schedule may arise, as the case may be, in relation to information about a beneficial owner within the meaning of regulation 3 of these Regulations (including about a person of significant control within the meaning of Part 21A of the Companies Act 2006) and in relation to information about a registrable beneficial owner within the meaning of Part 3 of Schedule 1 to the Economic Crime (Transparency and Enforcement) Act 2022.

1A material discrepancy in this Schedule is one which satisfies the condition in paragraph 2, including one which is in a form listed in paragraph 3.

2The condition in this paragraph is that the discrepancy, by its nature, and having regard to all the circumstances, may reasonably be considered—ato be linked to money laundering or terrorist financing; orbto conceal details of the business of the customer.

3Discrepancies listed in this paragraph are in the form of—aa difference in name;ban incorrect entry for nature of control;can incorrect entry for date of birth;dan incorrect entry for nationality;ean incorrect entry for correspondence address;fa missing entry for a person of significant control or a registrable beneficial owner;gan incorrect entry for the date the individual became a registrable person.

SCHEDULE 3ZA — High-Risk Third Countries

SCHEDULE 3A — Excluded Trusts

Legislative Trusts

1

A trust imposed or required by an enactment.

1A

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;

• (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.

Trusts imposed by court order

2

A trust created by, or in order to satisfy the terms of, an order of a court or tribunal.

Pension scheme trusts

3

A trust holding sums or assets of a pension scheme which is a registered pension scheme for the purposes of Part 4 of the Finance Act 2004.

Trusts of insurance policies

4

• (1) A trust of a life policy paying out only—

• (a) on the death, terminal or critical illness, or permanent or temporary disablement of the person assured; or

• (b) to meet the cost of healthcare services provided to the person assured.

• (2) A trust of an insurance policy paying out only—

• (a) on the temporary disablement of the person assured, where that policy was applied for at the same time as a policy under sub-paragraph (1); or

• (b) to meet the cost of healthcare services provided to the person assured.

• (3) A trust of the benefits payable on the death of the person assured under a retirement policy.

Charitable trusts

5

A trust for charitable purposes which—

• (a) in Scotland or Northern Ireland, is registered as a charity; or

• (b) in England and Wales, is registered as a charity or not required to register by virtue of section 30(2)(a) to (d) of the Charities Act 2011.

Pilot trusts

6

A trust which—

• (a) holds property with a value not exceeding £100, and

• (b) was created before the date on which regulation 42(2)(iii) of these Regulations comes into force.

Bank accounts for minors etc

6A

• (1) A trust which is created as a requirement of opening a relevant account for the sole benefit of—

• (a) a person under the age of 18;

• (b) a person who lacks capacity within the meaning of section 2 of the Mental Capacity Act 2005;

• (c) a person who is incapable within the meaning of section 1 of the Adults with Incapacity (Scotland) Act 2000; or

• (d) a person who is incapable of managing and administering the person’s property and affairs, by reason of mental disorder within the meaning of Article 3(1) of the Mental Health (Northern Ireland) Order 1986.

• (2) In this paragraph—

• “relevant account” means an account, consisting only of a sum of money, held with an authorised Part 4A person carrying on by way of business the activity specified in article 5 (accepting deposits) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

• “authorised Part 4A person” means an authorised person who has a Part 4A permission, within the meaning given to that term in section 55A(5) of FSMA, to carry on that specified activity.

Trusts having effect on death

7

• (1) A trust effected by will where—

• (a) the trust is holding only the property comprised in a person’s estate on death, and

• (b) less than two years has passed since that person’s death.

• (2) In this paragraph, a person’s “estate” means the aggregate of all the property to which that person is beneficially entitled.

8

A trust where—

• (a) the trust is holding only benefits received on the death of the person assured under a policy within paragraph 4, and

• (b) less than two years has passed since that person’s death.

8A

• (1) A trust created under a deed or instrument which—

• (a) varies any of the dispositions of property comprised in a person’s (“P’s”) estate on death, and

• (b) was made by the persons or any of the persons who benefit or would benefit from the dispositions,

where less than two years has passed since P’s death.

• (2) In this paragraph, a person’s “estate” means the aggregate of all property to which that person is beneficially entitled.

Co-ownership

9

A trust of jointly held property where the trustees and the beneficiaries are the same persons.

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 have passed since that person’s death.

Revocation of survivorship destination trusts

9B

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.

Financial markets infrastructure

10

• (1) A trust—

• (a) created under, or for the purpose of, the default arrangements of a designated system or of the default rules of a recognised body, or for the purpose of any action or proceedings taken by or for such a system or body under such arrangements or rules;

• (b) relating to the creation of a beneficial interest in securities belonging to a person whose name and address are maintained on a register of securities (within the meaning of regulation 3(1) of the Uncertificated Securities Regulations 2001); or

• (c) created by or for a segregating entity—

• (i) for the purpose of protecting sums or assets belonging to the segregating entity’s clients; or

• (ii) for the purpose of complying with a legal obligation to safeguard and segregate sums or assets belonging to the segregating entity’s clients or to keep separate client records and accounts.

• (2) In this paragraph—

• “clearing member” and “default rules” have the meanings given, respectively, in sections 190(1) and 188 of the Companies Act 1989;

• “default arrangements”, “designated system” and “participant” have the meanings given in regulation 2(1) of the Financial Markets and Insolvency (Settlement Finality) Regulations 1999;

• “recognised body” and “recognised central counterparty” have the meanings given in section 313 of FSMA;

• “segregating entity” means—an authorised person;a clearing member of a recognised central counterparty;a participant in a designated system;a designated system; ora recognised body.

Professional services

11

A trust created for the purpose of enabling or facilitating the holding of sums, assets or (in the case of sub-paragraph (c)), documents, belonging to a person other than the trustee, in connection with which sums, assets or documents the trustee is—

• (a) carrying on by way of business the activity specified in article 40 (safeguarding and administering investments) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

• (b) acting by way of business as the trustee of an authorised unit trust scheme (and for this purpose “trustee” and “authorised unit trust scheme” have the meanings given in section 237 of FSMA); or

• (c) acting by way of business as an agent holding sums, assets or documents in escrow until the performance of a contractual condition agreed between two or more other persons, including the person for whom the sums, assets or documents are being held.

Client money etc.

12

A trust created by a relevant supervised person for the purpose of holding client money, securities or other assets, where that trust is incidental to the carrying on of business by the relevant supervised person.

Capital markets etc.

13

A trust created for the purpose of enabling or facilitating an activity listed in points 2, 3, 6, 7 or 8 of ... Schedule 2, or for protecting or enforcing rights relating to that activity, where—

• (a) one or more of the participants in that activity is a relevant supervised person, and

• (b) the use of the trust is incidental to the principal purpose of that activity.

Commercial transactions

14

A trust created for the purpose of—

• (a) enabling or facilitating a transaction effected for genuine commercial reasons; or

• (b) protecting or enforcing rights relating to such a transaction,

where the use of the trust is incidental to the principal purpose of the transaction.

Registration of assets

15

A trust created on the transfer or disposal of an asset where the purpose of the trust is to hold the legal title to the asset on trust for the person to whom the transfer or disposal is being made until the time when the procedure required by law to effect the transfer or disposal of legal title is completed.

Trusts meeting legislative requirements

16

A trust holding property to which section 71A or 71D of the Inheritance Tax Act 1984 applies.

17

A trust of property in respect of which a direction under paragraph 1 of Schedule 4 to the Inheritance Tax Act 1984 has effect.

18

A trust of funds derived from a payment—

• (a) made for the benefit of a person in consequence of a personal injury to that person, and

• (b) disregarded from capital under regulation 46(2) of, and paragraph 12 of Schedule 10 to, the Income Support (General) Regulations 1987.

19

A trust holding tenants’ contributions for the purposes of section 42 of the Landlord and Tenant Act 1987.

20

The plan trust of a share incentive plan which meets the requirements of Part 9 of Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003.

21

A trust created under a share option scheme that meets the requirements of Parts 2 to 7 of Schedule 3 to the Income Tax (Earnings and Pensions) Act 2003.

22

A trust holding property for a beneficiary who is a disabled person within the meaning given by Schedule 1A to the Finance Act 2005.

Public authorities

23

A trust created for the purposes of enabling or assisting—

• (a) a public authority, within the meaning of section 3(1) of the Freedom of Information Act 2000, or a body specified in section 80(2) of that Act;

• (b) a Scottish public authority, within the meaning of section 3(1) of the Freedom of Information (Scotland) Act 2002;

• (c) the Security Service, the Secret Intelligence Service, the Government Communications Headquarters or the National Crime Agency; or

• (d) the Welsh Assembly Government,

to carry out its functions, including any functions as a court or tribunal and, in the case of the Bank of England, any of its functions as a monetary authority within the meaning of section 244(2)(c) of the Banking Act 2009.

General exclusion

23A

• (1) A trust which—

• (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.

• (2) This paragraph does not apply to a trust which is a UK trust which is an express trust where—

• (a) the settlor has, during his or her lifetime, created one or more other UK trusts which are express trusts, and

• (b) one of the trusts mentioned in paragraph (a) is or was an excluded trust under this paragraph.

• (3) In this paragraph, “assets of appreciable worth” includes works of art, antiques, collectibles, jewellery and other non-financial assets capable of increasing in value over time.

Interpretation

24

In this Schedule, “relevant supervised person” means—

• (a) a relevant person; or

• (b) a person who is subject to requirements in national legislation having an equivalent effect to those laid down in the fourth money laundering directive on an obliged entity (within the meaning of that directive) and supervised for compliance with those requirements in a manner equivalent to section 2 of Chapter VI of the fourth money laundering directive.

SCHEDULE 4 — Supervisory Information

1

The number of persons subject to the supervision of the supervisory authority, or in the case of a self-regulatory organisation, the number of its members (“supervised persons”).

2

The number of supervised persons who are individuals.

3

In the case of a self-regulatory organisation, the number of its supervised persons who act as trust or company service providers.

4

In the case of a self-regulatory organisation, the number of applications for membership which the organisation has—

• (a) received,

• (b) rejected, and

• (c) accepted.

5

The services provided by supervised persons.

6

The number of firms subject to the supervision of the supervisory authority which the authority considers to be—

• (a) high risk;

• (b) medium risk;

• (c) low risk;

and for these purposes, “risk” refers to the risk that the firm will be subject to money laundering or terrorist financing.

7

The number of applications for approval received by the supervisory authority under regulation 26, and the number of those that—

• (a) were refused;

• (b) were accepted;

• (c) are to be determined.

8

The number of approvals under regulation 26 which were not valid, or ceased to be valid under paragraph (9) of that regulation.

9

In the case of a self-regulatory organisation, the number, amount and type of disciplinary measures it has imposed in relation to contraventions of these Regulations on supervised persons.

10

The number of times the supervisory authority has—

• (a) refused to register an applicant for registration under regulation 59; or

• (b) exercised any powers under regulation 60.

11

The number of times the supervisory authority has exercised any powers under Part 8.

12

The number of contraventions of these Regulations committed by supervised persons.

12A

The number of contraventions of these Regulations identified upon exercise of the powers under Part 8.

13

The number and amount of penalties or charges which have been imposed under Part 9.

14

The number of times the supervisory authority has exercised the other powers under Part 9.

15

The number of times the supervisory authority or any of its supervised persons has made a suspicious activity disclosure to the NCA, and for these purposes, “suspicious activity disclosure” has the meaning given in regulation 104(4).

15A

A copy of any suspicious activity disclosure (within the meaning given in regulation 104(4)) the supervisory authority or any of its supervised persons has made to the NCA.

16

The number of supervised persons who have contravened requirements imposed by or under—

• (a) Part 3 of the Terrorism Act 2000 (terrorist property) , or

• (b) Part 7 (money laundering) or 8 (investigations) of the Proceeds of Crime Act 2002 .

17

Information on the money laundering and terrorist financing practices that the supervisory authority considers apply to its own sector.

18

Indications that the supervisory authority considers to suggest that a transfer of criminal funds takes place in their own sector.

19

The amount of human resource allocated by the supervisory authority to supervising the countering of money laundering and terrorist financing.

SCHEDULE 5 — Connected Persons

Corporate Bodies

1

If the relevant person or payment service provider is a body corporate, any person who is or has been—

• (a) an officer or manager of the body corporate;

• (b) an officer or manager of a parent undertaking of the body corporate;

• (c) an employee of the body corporate;

• (d) an agent of the body corporate; or

• (e) an agent of a parent undertaking of the body corporate.

Partnerships

2

If the relevant person or payment service provider is a partnership, any person who is or has been a member, manager, employee or agent of the partnership.

Unincorporated Associations

3

If the relevant person or payment service provider is an unincorporated association of persons which is not a partnership, any person who is or has been a member, an officer, manager, employee or agent of the association.

Individuals

4

If the relevant person or payment service provider is an individual, any person who is or has been an employee or agent of that individual.

SCHEDULE 6 — Meaning of “relevant requirement”

1

For the purposes of Part 9 of these Regulations, “relevant requirement” means—

• (a) a requirement imposed by the funds transfer regulation specified—

• (i) in relation to a payment service provider of a payer, in paragraph 2;

• (ii) in relation to a payment service provider of a payee, in paragraph 3;

• (iii) in relation to the payment service provider of an intermediary, in paragraph 4.

• (b) a requirement imposed (otherwise than on supervisory authorities, registering authorities or auction platforms) in or under the regulations specified in paragraphs 5 to 13;

• (c) the following requirements imposed on auction platforms—

• (i) the customer due diligence requirements in regulation 17 of the UK auctioning regulations;

• (ii) the monitoring and record keeping requirements of regulation 37 of the UK auctioning regulations; or

• (iii) the requirements imposed in regulations 18 to 21 or 24 of these Regulations;

• (iv) any requirement imposed under regulations 66, 69(2), 70(7), 77(2) and (6) or 78(2) or (5) of these Regulations.

2

The requirements specified in this paragraph are those imposed in—

• (a) Article 4 (information accompanying transfers of funds);

• (b) Article 5 (information within the EEA);

• (c) Article 6 (transfer of funds outside the EEA);

• (d) Article 14 (provision of information);

• (e) Article 15 (data protection);

• (f) Article 16 (record retention).

3

The requirements specified in this paragraph are those imposed in—

• (a) Article 7 (detection of missing information on the payer or the payee);

• (b) Article 8 (transfers of funds with missing or incomplete information on the payer or the payee);

• (c) Article 9 (assessment and reporting);

• (d) Article 14 (provision of information);

• (e) Article 15 (data protection);

• (f) Article 16 (record retention).

4

The requirements specified in this paragraph are those imposed in—

• (a) Article 10 (retention of information on the payer and the payee with the transfer);

• (b) Article 11 (detection of missing information on the payer or the payee);

• (c) Article 12 (transfer of funds with missing information on the payer or the payee);

• (d) Article 13 (assessment and reporting);

• (e) Article 14 (provision of information);

• (f) Article 15 (data protection);

• (g) Article 16 (record retention).

5

The requirements specified in this paragraph are those—

• (a) imposed in—

• (i) regulation 18 (risk assessment by relevant persons);

• (ia) regulation 18A (risk assessment by relevant persons in relation to proliferation financing);

• (ii) regulation 19 (policies, controls and procedures);

• (iia) regulation 19A (policies, controls and procedures in relation to proliferation financing);

• (iii) regulation 20 (policies, controls and procedures: group level);

• (iv) regulation 21 (internal controls);

• (v) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (vi) regulation 23 (requirement on authorised person to inform the FCA);

• (vii) regulation 24 (training);

• (b) imposed by supervisory authorities under regulation 25 (supervisory action).

6

The requirements specified in this paragraph are those imposed in regulation 26(1), (4), (5) and (10) (prohibition and approvals).

7

The requirements specified in this paragraph are those imposed in—

• (a) regulation 27 (customer due diligence);

• (b) regulation 28 (customer due diligence measures);

• (c) regulation 29 (additional customer due diligence measures: credit institutions and financial institutions),

• (d) regulation 30 (timing of verification);

• (dza) regulation 30ZA (insolvent bank customers);

• (da) regulation 30A (requirement to report discrepancies in registers);

• (e) regulation 31(1) (requirement to cease transactions);

• (f) regulation 33(1) and (4) to (6) (obligation to apply enhanced customer due diligence);

• (g) regulation 34 (enhanced customer due diligence: credit institutions, financial institutions and correspondent relationships);

• (h) regulation 35 (enhanced customer due diligence: politically exposed persons);

• (i) regulation 37 (application of simplified due diligence);

• (j) regulation 38(3) (electronic money).

8

The requirements specified in this paragraph are those imposed in—

• (a) regulation 39(2) and (4) (reliance);

• (b) regulation 40(1) and (5) to (7) (record keeping);

• (c) regulation 41 (data protection).

9

The requirements specified in this paragraph are those imposed in—

• (a) regulation 43 (corporate bodies: obligations);

• (b) regulation 44 (trustee obligations);

• (c) regulation 45(2) , (9) and (10A) to (10I) (register of beneficial ownership);

• (d) regulation 45ZA(3) to (7) (register of beneficial ownership: additional types of trust).

9A

The requirements specified in this paragraph are those imposed in regulation 45B (duty to respond to requests for information) and 45G(1) and (3) (record keeping).

10

The requirements specified in this paragraph are those imposed in—

• (a) regulation 56(1) and (5) (requirement to be registered);

• (aa) regulation 56B (requirement that cryptoasset firms acting as cryptoasset exchange providers or custodian wallet providers inform the FCA);

• (b) regulation 57(1) and (4) (applications for registration in a register maintained under regulations 54 or 55);

• (c) regulation 60A (disclosure by cryptoasset businesses).

11

The requirements specified in this paragraph are those imposed in regulation 64(2) (obligations of payment service providers);

11A

The requirements specified in this paragraph are those imposed in—

• (a) regulation 64C (information accompanying an inter-cryptoasset business transfer);

• (b) regulation 64D (missing or non-corresponding information: the cryptoasset business of a beneficiary);

• (c) regulation 64E (missing information: intermediaries);

• (d) regulation 64F (retention of information with an inter-cryptoasset business transfer: intermediaries);

• (e) regulation 64G (requesting information: unhosted wallet transfers and cryptoasset businesses);

• (f) regulation 64H (provision of information).

12

The requirements specified in this paragraph are those imposed under—

• (a) regulation 66 (power to require information);

• (b) regulation 69(2) (entry, inspection of premises without a warrant);

• (c) regulation 70(7) (entry of premises under warrant);

• (ca) regulation 74A (reporting requirements: cryptoasset businesses);

• (cb) regulation 74B (report by a skilled person: cryptoasset businesses);

• (cc) regulation 74C (directions: cryptoasset businesses);

• (d) regulation 77(2) and (6) (power to impose civil penalties: suspension and removal of authorisation);

• (e) regulation 78(2) and (5) (power to prohibit individuals from managing).

13

The requirement specified in this paragraph is the requirement imposed in regulation 84(1).

SCHEDULE 6A — The United Kingdom’s Financial Intelligence Unit

Interpretation

1

In this Schedule

• “external request” means a request to the NCA for information by a foreign FIU which may be relevant for the purpose of the foreign FIU’s performance of FIU functions;

• “FIU functions” means the functions of a financial intelligence unit as set out in the fourth money laundering directive;

• “foreign competent authority” means an authority in an EEA state other than the United Kingdom which has equivalent functions to those of a United Kingdom competent authority to which a foreign FIU may provide information in connection with its performance of FIU functions;

• “foreign FIU” means an authority in an EEA state other than the United Kingdom which performs FIU functions in that state;

• “relevant information” means information the NCA possesses in connection with its performance of FIU functions which it considers relevant to an external request;

• “the 2000 Act” means the Terrorism Act 2000 ;

• “the 2002 Act” means the Proceeds of Crime Act 2002 ;

• “United Kingdom competent authority” means any authority other than the NCA concerned in the prevention, investigation, detection or prosecution of criminal offences contained in Part 7 (money laundering) of the 2002 Act or Part 3 (terrorist property) of the 2000 Act, and any supervisory authority, to which the NCA disseminates information in its performance of FIU functions.

Reports to the National Crime Agency

2

Where the NCA has, in its performance of FIU functions, disseminated any information to a United Kingdom competent authority, that authority must, upon request, provide a report to the NCA about the authority’s use of that information, including the outcome of any investigations or inspections conducted on the basis of that information.

Co-operation

3

The NCA must take such steps as it considers appropriate to co-operate with foreign FIUs in their performance of FIU functions.

Provision of information in response to external requests

4

In response to an external request, the NCA must (subject to paragraph 10) provide promptly any relevant information in the NCA’s possession.

5

Where an external request is received and the NCA does not possess information which the NCA considers relevant to the external request, and it suspects a relevant person possesses such information, the NCA—

• (a) may exercise its powers under Parts 7 and 8 (investigations) of the 2002 Act, any orders made under section 445 (external investigations) of that Act, or Part 3 of the 2000 Act , as applicable, to seek an order for information from such person, and

• (b) must (subject to paragraph 10) provide any relevant information received in consequence of any such order promptly to the foreign FIU concerned.

6

The NCA must designate at least one point of contact with responsibility for receiving external requests.

7

Where the NCA has provided relevant information to a foreign FIU, and that foreign FIU makes a request for consent to disseminate some or all of the relevant information to a foreign competent authority, the NCA must (subject to paragraph 11) consent to the dissemination of as much of the requested information as possible and communicate its consent promptly to the foreign FIU.

8

Where the NCA provides relevant information in response to an external request in accordance with this Schedule, the NCA shall take such steps as it considers appropriate to ensure that such information is transmitted securely.

Conditions and restrictions on provision or further dissemination of relevant information

9

The NCA may impose such restrictions and conditions on the use of relevant information provided in response to an external request as the NCA considers appropriate.

10

Where an obligation arises under this Schedule for the NCA to provide relevant information in response to an external request, the NCA may decide not to provide some or all of the information where and to the extent that the NCA considers that doing so could be contrary to national law.

11

The NCA is not required to comply with the duty to give consent to the dissemination of information to a foreign competent authority under paragraph 7 if and to the extent that the NCA considers that the giving of such consent could—

• (a) prejudice an investigation, whether into a criminal cause or matter or in relation to any investigation referred to in section 341 (investigations) of the 2002 Act or to which Schedule 5A (terrorist financing investigations) to the 2000 Act applies; or

• (b) be contrary to national law.

12

The NCA must have particular regard—

• (a) where making a decision under paragraph 10, to the need for as unfettered an exchange of relevant information in response to external requests as possible, or

• (b) where making a decision under paragraph 11, to the need for as unfettered dissemination of information as possible by a foreign FIU to foreign competent authorities,

in order for the foreign FIU concerned to carry out FIU functions efficiently and effectively.

Requests for information by the NCA to foreign FIUs

13

Paragraphs 14 and 15 apply where the NCA wishes to obtain information concerning a relevant person which has its head office in an EEA state other than the United Kingdom.

14

The NCA must address a request for the information to the foreign FIU in the state in which the relevant person has its head office.

15

Where the NCA makes a request to a foreign FIU for information which the NCA considers may be relevant for its performance of FIU functions, the request must contain the relevant facts and background information, reasons for the request and how the information sought is proposed to be used.

Conditions and restrictions on use of information received by the NCA from foreign FIUs

16

Where the NCA receives information from a foreign FIU, the NCA must—

• (a) use the information only for the purpose for which it was sought or provided, unless it has obtained the prior consent of the foreign FIU to any other use of the information;

• (b) comply with any restrictions or conditions of use which have been imposed by the foreign FIU in respect of the information; and

• (c) obtain the prior consent of the foreign FIU to any further dissemination of the information.

Schedule 6B — Changes in Control of Registered Cryptoasset Businesses

Modifications: Control over registered cryptoasset businesses registered before 25th October 2027

1

Part 12 of FSMA (control over authorised persons) applies, with the modifications specified in paragraph 2, to a registered cryptoasset business that is included in the register before 25th October 2027 and to which Part 12 of FSMA would not otherwise apply.

2

The modifications specified in this paragraph are—

• (a) references to a “UK authorised person” are to be read as references to a registered cryptoasset business;

• (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) is to be read as if subsections (2ZA) and (2A) were omitted;

• (d) section 181 (acquiring control) is to be read as if it said—

(181) (1) For the purposes of this Part, a person (“A”) acquires control over a registered cryptoasset business (“B”) if, should the acquisition proceed— (a) A would become a beneficial owner within the meaning of regulation 5 or 6 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 of— (i) B; or (ii) a parent undertaking of B (“P”); or (b) if 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) otherwise hold 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.

• (e) section 182 (increasing control) is to be read as if it said—

(182) (1) For the purposes of this Part, a person (“A”) increases control over a registered cryptoasset business (“B”) if, should the increase in control proceed— (a) A would become a beneficial owner within the meaning given by regulation 5 or 6 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 of— (i) B; or (ii) a parent undertaking of B (“P”); or (b) if 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) is to be read as if it said—

(183) (1) For the purposes of this Part, a person (“A”) reduces control over a registered cryptoasset business (“B”) if, should the decrease in control proceed— (a) A would cease to be a beneficial owner within the meaning given by regulation 5 or 6 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 of— (i) B; or (ii) a parent undertaking of B (“P”); or (b) if 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 ceases to have control over B if— (a) A ceases to be a beneficial owner within the meaning given by regulation 5 or 6 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 of B or P; or (b) if paragraph (a) does not apply, A ceases to be in the position of holding— (i) 10% or more of the shares in B; (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) is to be read as if subsections (4) to (10) were omitted;

• (h) section 185 (assessment: general) 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), in relation to a section 178 notice-giver who falls within section 181(a) or 182(1)(a), for “matters” there were substituted “matter”;

• (i) section 186 (assessment criteria) is to be read in relation to a section 178 notice-giver who falls within section 181(a) or 182(1)(a) as if it said—

(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 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) is to be read as if subsection (2)(b) were omitted;

• (k) section 187A (assessment: consultation by PRA with FCA) is to be disregarded;

• (l) section 187B (assessment: consultation by FCA with PRA) is to be disregarded;

• (m) section 187C (variation etc of conditions) is to be disregarded;

• (n) section 189 (assessment: procedure) is to be read as if—

• (i) subsections (1A), (1ZB) and (1B) were omitted;

• (ii) in subsection (6), “Unless section 190A applies” were omitted;

• (o) section 190 (requests for further information) is to be read as if subsections (1A) and (4)(b) were omitted;

• (p) section 190A (assessment and resolution) is to be disregarded;

• (q) section 191A (objection by the appropriate regulator) 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) 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 registered cryptoasset business (“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 FCA may direct that, in respect of a beneficial owner of B or P, 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) 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) is to be read as if subsection (1A) were omitted;

• (u) section 191F (offences under this Part) 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 minimum; (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 and Northern Ireland, to a fine not exceeding the statutory minimum; (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) is to be read—

• (i) as if the definitions of “the appropriate regulator”, “qualifying credit institution” and “UK authorised person” were omitted;

• (ii) at the appropriate places there were inserted—

• “registered cryptoasset business” means a cryptoasset exchange provider or a custodian wallet provider which is included in the register maintained by the FCA under regulation 54(1A) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

Modifications: Control over registered cryptoasset businesses registered on and after 25 October 2027

3

Part 12 of FSMA (control over authorised persons) applies, with the modifications specified in paragraph 4, to a registered cryptoasset business that is included in the register on or after 25th October 2027 and to which Part 12 of FSMA would not otherwise apply.

4

The modifications specified in this paragraph are—

• (a) references to a “UK authorised person” are to be read as references to a registered cryptoasset business;

• (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) is to be read as if subsections (2ZA) and (2A) were omitted;

• (d) section 184 (disregarded holdings) is to be read as if subsections (4) to (10) were omitted;

• (e) section 185 (assessment: general) 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) is to be read as if subsection (2)(b) were omitted;

• (g) section 187A (assessment: consultation by PRA with FCA) is to be disregarded;

• (h) section 187B (assessment: consultation by FCA with PRA) is to be disregarded;

• (i) section 187C (variation etc of conditions) is to be disregarded;

• (j) section 189 (assessment: procedure) 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) is to be read as if subsections (1A) and (4)(b) were omitted;

• (l) section 190A (assessment and resolution) is to be disregarded;

• (m) section 191A (objection by the appropriate regulator) 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) is to be read as if subsection (2A) were omitted;

• (o) section 191C (orders for sale of shares) 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) is to be read as if subsection (1A) were omitted;

• (q) section 191F (offences under this Part) 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 and Northern Ireland, to a fine not exceeding the statutory minimum; (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) is to be read as if—

• (i) the definitions of “the appropriate regulator”, “qualifying credit institution” and “UK authorised person” were omitted;

• (ii) at the appropriate place there were inserted—

• “registered cryptoasset business” means a cryptoasset exchange provider or a custodian wallet provider which is included in the register maintained by the FCA under regulation 54(1A) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

Interpretation

5

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);

• “custodian wallet provider” has the meaning given by regulation 14A(2);

• “registered cryptoasset business” means a cryptoasset exchange provider which is included in the register maintained by the FCA under regulation 54(1A).

SCHEDULE 7 — Consequential Amendments

PART 1 — Consequential Amendments to Primary Legislation

Solicitors (Scotland) Act 1980

1

In section 34 of the Solicitors (Scotland) Act 1980 , after subsection (1C), insert—

(1D) Rules made under this section may make provision as to the way in which solicitors and incorporated practices are to comply with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

Northern Ireland Act 1998

2

In Schedule 3 to the Northern Ireland Act 1998 (reserved matters) —

• (a) in paragraph 25, for “the Money Laundering Regulations 2007” substitute “the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017”;

• (b) omit paragraph 25A.

Financial Services and Markets Act 2000

3

• (1) FSMA is amended as follows.

• (2) In section 226 (complaints: the ombudsman scheme etc) after subsection (7) insert—

(7A) The rules must provide that a person within subsection (7B) is eligible in relation to a complaint to which subsection (7C) applies. (7B) A person is within this subsection if he or she has been identified by a respondent, in carrying on an activity to which the rules apply, as— (a) a politically exposed person; (b) a family member of a politically exposed person; or (c) a known close associate of a politically exposed person. (7C) This subsection applies to a complaint— (a) that the complainant has been incorrectly identified as a person within subsection (7B); or (b) relating to an act or omission of the respondent in consequence of the identification of the complainant as a person within subsection (7B). (7D) In subsection (7B), “politically exposed person”, “family member” and “known close associate” have the meanings given in regulation 35(12) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

• (3) For the heading of Part 20C (as inserted by the Bank of England and Financial Services Act 2016) , substitute “Politically exposed persons: money laundering and terrorist financing”.

• (4) In section 333U (guidance relating to money laundering and politically exposed persons)—

• (a) in the heading, after “Money laundering” insert “ and terrorist financing ”; and

• (b) in subsection (3)—

• (i) for “Secretary of State” substitute “ Treasury ”; and

• (ii) in paragraph (b), after “by the FCA” insert “ or under the ombudsman scheme ”.

Terrorism Act 2000

4

• (1) The Terrorism Act 2000 is amended as follows.

• (2) In section 21G (other permitted disclosures etc), in subsection (1)(a), for “the Money Laundering Regulations 2007 (S.I. 2007/2157)” substitute “ the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 ”.

• (3) In section 21H(4), for the words from “Directive 2005/60/EC” to “2005” substitute “ Directive 2015/849/EU of the European Parliament and of the Council of 20th May 2015 ”.

• (4) Part 1 of Schedule 3A (business in the regulated sector) is amended in accordance with sub-paragraphs (5) to (10).

• (5) In paragraph 1(1)—

• (a) in paragraph (b) —

• (i) at the end of sub-paragraph (i), omit “or”;

• (ii) after sub-paragraph (i), insert—

(ia) an undertaking whose only listed activity is as a creditor under an agreement which— (aa) falls within section 12(a) of the Consumer Credit Act 1974 (debtor-creditor-supplier agreements); (bb) provides fixed sum credit (within the meaning given in section 10(1)(b) of the Consumer Credit Act 1974 (running-account credit and fixed-sum credit)) in relation to the provision of services; and (cc) provides financial accommodation by way of deferred payment or payment by instalments over a period not exceeding 12 months; or

• (b) after paragraph (j) , insert—

(ja) the carrying on of local audit work within the meaning of Schedule 5 to the Local Audit and Accountability Act 2014 (eligibility and regulation of local auditors) by any firm or individual who is a local auditor within the meaning of section 4(1) of that Act (general requirements for audit);

• (c) in paragraph (q)—

• (i) after “involves the” insert “ making or ”;

• (ii) for “15,000” substitute “ 10,000 ”.

• (6) In paragraph 1(5)(b), omit “contained in international standards and are”.

• (7) In paragraph 1(6) , at the end of paragraph (c) for “or” substitute “ and ”.

• (8) In paragraph 2(1)—

• (a) in paragraph (c) for “25” substitute “ 26 ”;

• (b) in paragraph (d), at the end, omit “or”;

• (c) at the end, insert—

(g) the carrying on by a local authority (within the meaning given in article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001) of an activity which would be a regulated activity for the purposes of the Financial Services and Markets Act 2000 but for article 72G of that Order; or (h) the preparation of a home report, which for these purposes means the documents prescribed for the purposes of sections 98, 99(1) or 101(2) of the Housing (Scotland) Act 2006 .

• (9) In paragraph 2(3)—

• (a) in paragraph (a), for “£64,000” substitute “£100,000;

• (b) in paragraph (f), after “(r)” insert “ to (t) ”.

• (10) In paragraph 3—

• (a) in sub-paragraph (1), at the appropriate place insert—

“the Capital Requirements Directive” means Directive 2013/36/EU of the European Parliament and of the Council of 26th June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms ;

• (b) in sub-paragraph (3)—

• (i) after “Capital Requirements Regulation” insert “ , the Capital Requirements Directive ”;

• (ii) after “Part as” insert “ in that Regulation or ”.

• (11) In Part 2 of Schedule 3A (supervisory authorities), in paragraph 4—

• (a) in sub-paragraph (1), omit paragraphs (b), (ea) and (f) (but not the “and” after paragraph (f));

• (b) in sub-paragraph (2)—

• (i) after paragraph (d), insert—

(da) the Chartered Institute of Legal Executives;

• (ii) omit paragraph (f).

Criminal Justice and Police Act 2001

5

In the Criminal Justice and Police Act 2001 —

• (a) in section 68(2) (application to Scotland)—

• (i) in paragraph (g), for “regulation 39(6) of the Money Laundering Regulations 2007” substitute “regulation 70(7) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017”;

• (ii) omit paragraph (h);

• (b) in Part 1 of Schedule 1 (powers of seizure to which section 50 of the 2001 Act applies)—

• (i) in the heading above paragraph 73J, for “The Money Laundering Regulations 2007” substitute “ The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 ”;

• (ii) in paragraph 73J, for “regulation 39(6) of the Money Laundering Regulations 2007” substitute “ regulation 70(7) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 ”;

• (iii) omit paragraph 73K and the heading above it.

Proceeds of Crime Act 2002

6

• (1) The Proceeds of Crime Act 2002 is amended as follows.