UK AML Reform Advances as FCA Sets Out Supervision Transition

The UK Financial Conduct Authority (FCA) is preparing to take over anti-money laundering and counter-terrorist financing (AML/CTF) supervision for legal service providers, accountancy service providers, and trust and company service providers as part of a wider reform of the UK’s AML supervisory regime.

Under the planned framework, the FCA will assume responsibilities currently shared between professional body supervisors (PBSs) and HM Revenue and Customs (HMRC). The reform is intended to simplify the supervisory structure, improve consistency, and strengthen oversight of AML compliance across professional services.

The changes are expected to affect approximately 60,000 businesses and sole practitioners, including around 34,000 accountancy businesses supervised by PBSs, 7,500 law businesses supervised by PBSs, and 18,000 accountancy and trust and company service providers currently supervised by HMRC.

What the reform means for compliance teams

The transition will not happen immediately. The FCA expects to begin phased implementation in late 2028, with the remaining PBS-supervised businesses expected to move to FCA oversight by around 2030. Until new legislation is passed, affected firms should continue following their existing AML requirements and engaging with their current supervisors.

The Government’s reform will require legislative changes through the Financial Services and Markets Bill and amendments to the Money Laundering Regulations. The FCA is also developing its operating model and engaging with PBSs, HMRC and industry stakeholders ahead of the transition.

The FCA has indicated that its expanded supervisory approach will be risk-based, targeted and proportionate, supported by sector-specific expertise and data-driven supervision. The reform also forms part of wider efforts to create more consistent AML oversight across UK-regulated professional services.

For firms affected by the changes, the immediate priority remains maintaining existing AML controls while monitoring regulatory developments ahead of the phased transition to FCA supervision.