The UK’s Financial Conduct Authority (FCA) has entered into a new era in its fight against global financial crime, as HM Treasury has officially announced that the FCA will become the Single Professional Services Supervisor (SPSS) for anti-money laundering and counter-terrorist financing (AML/CTF) for professional services firms in the UK.
The announcement, following a consultation process in late 2025, will see the authority and responsibility for AML/CTF supervision transferred to the FCA from the existing model of 23 separate industry-specific Professional Body Supervisors (PBS), such as the Solicitors Regulation Authority for the legal profession, and the Institute of Chartered Accountants in England and Wales for accounting. The PBSs will continue to retain oversight over non- AML/CTF issues.
The decision follows a long-running review aimed at reforming the UK and the City of London’s reputation as a global gateway for enabling money laundering. The reforms focus on cracking down on so-called “professional enablers”; the network of law firms, accountants, and Trust and Corporate Services Providers (TCSPs) within the UK’s professional services sector. Such firms, that receive and process large sums of client funds, are considered high-risk for providing a “cloak of legitimacy” for criminals around the world attempting to launder illicit wealth in the UK.
Amongst a series of changes, including enhanced “Fit and Proper” tests on beneficial owners and senior management of professional services firms, the FCA will now become the direct supervisory body to more than 60,000 firms across different sectors with vast differences in their size and nature of their operations and money-laundering risks, ranging from the largest global investment banks to local high-street divorce lawyers.
The expansion of its regulatory remit introduces challenges both for the FCA and the professional services industries it will now oversee. Key questions, as the specific implementation plan is finalized, relate to sector expertise and funding. As a financial services regulator, the FCA will face challenges in upscaling its sector expertise to handle issues specific to the legal or accounting sector, and the size and expertise of its inspection and investigation teams will be required to grow quickly to ensure that a single supervisor has the breadth to deliver the intended outcomes and not face “dilution” of the regulatory effectiveness this change is designed to enhance. It will behoove professional services firms to prepare for a more aggressive oversight of AML/CTF by the FCA.
The Financial Conduct Authority (FCA) has been designated as the new anti-money laundering watchdog for the legal sector, in a move that experts warn could result in “sharper” penalties and ultimately reshape the industry.
https://www.theguardian.com/business/2026/jan/01/uk-law-firms-ready-money-laundering-crackdown-fca
