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

Duties of the FCA: guidance on politically exposed persons U.K.

48.—(1) The FCA must give guidance under section 139A of FSMA (power of the FCA to give guidance) M1 to relevant persons, who are subject to rules made by the FCA, in relation to the enhanced customer due diligence measures required under regulation 35 in respect of politically exposed persons (“PEPs”), their family members and known close associates (within the meanings given in regulation 35(12)).

(2) The guidance referred to in paragraph (1) must include guidance on the following matters—

(a) taking into account regulation 35(14), what functions are, and are not, to be taken to be “prominent public functions” for the purposes of determining whether an individual is a PEP;

(b) which persons should be treated as coming within the definitions of—

(i) a family member of a PEP; or

(ii) a known close associate of a PEP;

(c) what constitutes “appropriate risk-management systems and procedures” for the purposes of regulation 35(1);

(d) what account is to be taken of the jurisdiction in which the prominent public function arises (taking into consideration the controls against money-laundering and terrorist financing in different jurisdictions);

(e) how the level of risk associated with a particular individual is to be assessed for the purposes of regulation 35(3), and what approach is to be taken in relation to a PEP, or a family member or known close associate of a PEP, if the PEP, family member or close associate is assessed as presenting a low level of risk;

(f) who should be treated as coming within the meaning of “senior management” for the purposes of regulation 35(5) and (8);

(g) the situations in which it would be appropriate for the senior management approval mentioned in regulation 35(5) to be given by an individual who is not a member of the board of directors (or, if there is no such board, a member of the equivalent management body) of a business;

(h) what constitutes “adequate measures” and “reasonable measures” for the purposes of paragraphs (5) and (6) respectively of regulation 35;

(i) the extent to which information on public registers may be taken into account for the purposes of regulation 35(5) and (6);

(j) what sort of monitoring and scrutiny is required for the purposes of regulation 35(5) and (8);

(k) what measures are required in relation to persons who have ceased to be PEPs to comply with regulation 35(9); and

(l) how to address risks of money laundering or terrorist financing where a PEP, a family member of a PEP or a known close associate of a PEP, is—

(i) the beneficial owner of a customer;

(ii) a beneficiary of a contract of long-term insurance;

(iii) the beneficial owner of a beneficiary of a contract of long-term insurance.

Marginal Citations

M1 2000 c.8. Section 139A was substituted (together with the rest of Part 9A of FSMA) for the original Part 10 by section 24 of the Financial Services Act 2012 (c.21).