The Money Laundering and Terrorist Financing (Amendment) Regulations 2026

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”).

They replace various references to euros throughout the MLRs with references to sterling, converting these references on a 1:1 basis (for example, 10,000 euros becomes £10,000), except where to do so would risk failing to meet the recommendations on combating money laundering and the financing of terrorism and proliferation, set by the Financial Action Task Force (“FATF”), the inter-governmental body that sets international standards which the UK is committed to implementing (see regulations 3(b) and (c), 8, 9, 10(b), 14(a) to (e), (f)(ii), (g)(iii), (h) and (i), 22, 32 and 33).

Regulations 4 and 7 amend regulations 4 and 12 of the MLRs to bring the service of selling an “off-the-shelf firm” within scope of the services that a “trust or company service provider” provides and specify that this service is to be treated as a business relationship.

They make provision in relation to customer and enhanced due diligence. Regulations 5, 15 and 21 amend regulations 8, 29 and 37 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. Measures undertaken in relation to pooled accounts may be adjusted as part of the application of simplified due diligence.

Regulation 14(f)(i) and (g)(i) and (ii) amends regulation 27 of the MLRs to align the customer due diligence transaction-based triggers for letting agents and art market participants with those for high value dealers.

These Regulations make provision in relation to insolvent bank customers. Regulation 17 inserts a new regulation 30ZA into the MLRs. Its effect is that, subject to certain requirements, a credit institution may permit an insolvent bank customer to open an account and transact from it prior to completing customer due diligence measures (including enhanced due diligence measures, where relevant) other than identifying the customer and, if applicable, identifying a person purporting to act on the customer’s behalf (and verifying that such person is authorised so to act). Regulations 16 and 18 amend regulations 30 and 30A of the MLRs respectively, to disapply verification timing requirements and delay the requirement to report discrepancies in registers when a credit institution establishes a business relationship with an insolvent bank customer under regulation 30ZA.

Regulations 19(a), 19(c) and 23 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 20 inserts new regulation 34A into the MLRs to require cryptoasset businesses to conduct enhanced customer due diligence in correspondent relationships (as defined in new regulation 34A(4)(b) of the MLRs). This is consistent with FATF recommendations 13 (correspondent banking) and 15 (new technologies).

These Regulations make provision in relation to trust registration. Regulations 24 to 26 amend regulations 42, 45 and 45ZA 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 continued to hold that interest at the date at which the amendments to regulations 42 and 45ZA come into force. Regulation 25(3) omits Stamp Duty Reserve Tax (SDRT) from regulation 45(14) of the MLRs so that a liability to pay SDRT will not result in a trust becoming a taxable trust that must be registered. Regulation 27 amends regulation 45ZB of the MLRs to extend the access to information provisions to include type C trusts (as defined in regulation 45ZA(2)(c) of the MLRs). Regulation 35 amends Schedule 3A to the MLRs to expand the list of excluded trusts which are not required to register.

These Regulations make amendments in relation to supervision. Regulation 28 extends the supervisory duty to cooperate to the registrar of companies (regulation 50 of the MLRs) and regulation 29 makes provision on disclosure by supervisory authorities and other relevant authorities (regulation 52 of the MLRs).

Regulation 30(a), (b) and (e) to (g) 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.

The remainder of regulation 30 and regulation 31 amend regulations 52A and 52B of the MLRs in respect of confidential information to expand the Financial Conduct Authority’s (FCA) disclosure gateways under the MLRs to include the existing exceptions to section 348 of the Financial Services and Markets Act 2000 (c. 8) (FSMA) and amend the defence to the offence in regulation 52B(1) to no longer require 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 37 substitutes a new Schedule 6B into the MLRs. This amendment aligns with the establishment of a new financial services regulatory regime for cryptoassets under the Financial Services and Markets Act 2000 (Cryptoassets) Order 2026 (S.I. 2026/102). In particular for a cryptoasset exchange provider or a custodian wallet provider that is registered under the MLRs before those regulatory changes take effect on 25th October 2027, the category required to give notice of a change of control is expanded to include a person who would be considered “a controller” within the meaning of FSMA.

The Regulations also make provision for various other matters including: varying the threshold for enhanced due diligence measures so that they apply to transactions that are unusually complex or unusually large given the nature of the transaction; excluding reinsurance contracts from the definition of “insurance undertaking”; excluding Norges Bank from the application of certain Parts of the MLRs when carrying out activities for which it is exempt from regulation under FSMA; requiring authorised persons to report to the FCA within 30 days an inaccuracy in, or material change affecting, information provided under regulation 23 of the MLRs; amending Schedule 1 to the MLRs to update the list of professional bodies; amending Schedule 6 to the MLRs, which sets out provisions of the MLRs that are “relevant requirements” for the purposes of enforcement action under Part 9, to include new regulations 30ZA and 34A; and making related amendments to the Terrorism Act 2000 (c. 11) and the Proceeds of Crime Act 2002 (c. 29).

An impact assessment of the effect that this instrument will have on the costs of business, the voluntary sector and the public sector is available from HM Treasury at 1 Horse Guards Road, London SW1A 2HQ and is published alongside this instrument on www.legislation.gov.uk.