Banks, building societies, investment firms, e-money institutions, consumer credit firms and life insurers are among the firms that will be subject to the recent requirement when it comes into effect on 31 December.

General insurers will initially be exempt from having to submit an annual financial crime report, but the FCA has said it will see into “bringing them into scope at a later date”.

The FCA has developed a standard template makeup that firms subject to the ‘REP-CRIM’ rules will possess to fill out within 60 business days of the complete of their next reporting period where that reporting period falls on or subsequent 31 December 2016.

In the first year of the recent requirement firms will be capable to submit the data on a “best endeavours basis”.

beneath the recent reporting obligations (55-sheet / 851KB PDF), firms will desire to submit details such as the number of “politically exposed persons” (PEP) and other “big-risk customers” they possess dealings with, as well the geographic areas in which those individuals are located.

Firms must also provide data on the number of ‘suspicious activity reports’ they possess submitted internally as well as those disclosed externally to the National Crime Agency (NCA) or beneath a acquiesce order.

Data to be disclosed will also relate to firms’ compliance with international sanctions and should further detail what they believe to be the top fraud risks the FCA should be aware of.

The FCA also said that firms operating within a broader group structure will be capable to submit a single financial crime report for a set of regulated firms within the same group “as drawnout as the firms included every share a common financial year complete”.

In confirming the recent requirement the FCA rejected concerns raised by some firms that in meeting their recent reporting duties the companies may commit an offence of ‘tipping-off’. The data to be collected will be gathered through GABRIEL, the FCA’s electronic reporting system, the regulator said.

The FCA said it will publish “aggregated and anonymised financial crime statistics” using the data it collects, beginning in 2017.

“At reward, our financial crime supervisory toil relies on the employ of ad hoc data requests to gather information about firms’ systems and controls,” the FCA said. “We do not currently routinely gather information from firms about financial crime, the risks they are exposed to, or how they manage those risks. This affects our ability to operate a truly risk-sensitive supervisory approach in line with global standards. Consequently, we propose to introduce a financial crime return for the first season.”

“We will employ the data collected by this return to support our financial crime supervision strategy. Analysing the data will enable us to conduct more desk-based supervisory toil than is currently possible. In revolve, this will aid us identify financial crime risks and trends, as well as possible emerging issues. It will also ensure we possess better quality and more consistent comparable data, allowing us to accurately risk-rate firms and better target our specialist resources on firms that pose the highest financial crime risk,” it said.

The FCA said it expects the data to aid it “identify emerging intra- and cross-sector risks” and that the introduction of the recent reporting requirement is likely to “reduce the desire for us to construct ad hoc data requests from firms”.

“The introduction of the financial crime annual data reports sees through unit of the commitments set out in the FCA’s business plan for 2016/17,” said regulatory law expert Anne-Marie Ottaway of Pinsent Masons, the law firm behind Out-Law.com. “This will locate an increased burden on firms who will desire to ensure that their internal reporting systems can accurately capture the required data.” 

“Unsurprisingly the reporting requirement covers the number of customers who are categorised as big risk, whether by virtue of being a PEP or based in a big risk jurisdiction or sector, and includes questions on third parties, such as introducers and appointed representatives. Firms will also be required to disclose the number of reports that the bank staff construct internally to the money laundering reporting officer and how numerous of those ultimately result in a suspicious activity report being made to the NCA. It will also seek to ascertain whether the number of staff allocated to financial crime toil is proportionate to the risks the firm has identified,” she said.

“Firms that haven’t allocated sufficient resources to address their financial crime risks, or that construct very few SARs, given their customer risk can expect more scrutiny from the FCA,” Ottaway said.