Future of AML supervision
Speculation about how AML supervision might evolve is understandable. However, at this stage there is no confirmed model for how the FCA will supervise the accountancy sector and a detailed implementation plan has not yet been published.
What is clear is that the transition will take time and will depend on primary legislation, which has not yet been scheduled. Until that legislative process progresses, the exact timeline for the transition cannot be confirmed.
ICAEW is engaging with the FCA as part of its early discovery work. This includes sharing insight into how our supervisory work currently operates and how our firms interact with the regulatory framework. The FCA is also looking for AML-supervised firms to express their interest in volunteering to participate in research that will help shape the design of the future FCA led AML regulatory model.
For now, the current supervisory framework will remain in place throughout 2026, and almost certainly for the majority of 2027, with a phased transition of firms to the FCA likely to follow.
Targeted changes to the Money Laundering Regulations
Alongside the longer-term supervisory reform, HM Treasury has been progressing more immediate updates to the MLRs through a statutory instrument (the draft Money Laundering and Terrorist Financing (Amendment) Regulations 2026) which was laid in parliament on 25 March 2026. This is expected to come into force before parliament’s 2026 summer recess (ie, in June or early July).
The upcoming amendments are designed to refine existing requirements and include:
Changes to enhanced due diligence (EDD) requirements
Currently, firms are required to apply EDD in situations involving high-risk third countries defined by the Financial Action Task Force (FATF)’s black list (call for action) and its grey list (increased monitoring).
Under the updated regulations, mandatory EDD will only apply to black list countries. This is intended to reduce the regulatory burden associated with the frequently changing grey list.
For many firms it is unlikely to result in significant change to their processes, as they continue to consider a broad range of factors when assessing high-risk clients.
Complex and large transactions wording clarification
A second refinement to EDD requirements addresses ambiguity around complex and large transactions.
The current wording requires EDD for “complex or unusually large” transactions. The revised wording clarifies that EDD should apply where transactions are “unusually complex or unusually large” given the nature of the transaction.
This is intended to reduce overly cautious interpretations and ensure that enhanced checks are focused on out of place transactions that raise a red flag.
Simplifying thresholds and closing scope gaps
The statutory instrument also introduces practical changes to simplify compliance and close perceived gaps.
One such change is the move from euro-denominated thresholds to pounds sterling. For example, the commonly referenced €10,000 threshold will become £10,000. While relatively minor, this removes the need for firms to calculate exchange rates and interpret fluctuating values, making day-to-day compliance more straightforward.
Another important clarification relates to trust or company service providers (TCSPs). The updated regulations will explicitly bring the sale of off-the-shelf companies within scope, which will address a perceived gap in the current AML and counter terrorist financing regime. It ensures that customer due diligence will be carried out across the full range of TCSP services.
Updated Consultative Committee of Accountancy Bodies (CCAB) Anti-money Laundering Guidance
In parallel with these regulatory changes, updates to the CCAB Guidance are being developed to improve clarity of existing AML requirements.
These include:
- how to approach source of funds checks,
- clearer articulation of EDD triggers,
- how to incorporate the National Risk Assessment into firm processes, and
- greater clarity on evidence for identity verification.
In summary
For firms, the message is to continue to focus on getting the fundamentals right while the supervisory reform changes are being planned.
The current regulatory framework remains in place, and supervisory expectations are unchanged in the short term.
AML webinar: early look at new guidance and reviewer insights
Further detail on both the statutory instrument and the updated CCAB guidance will be shared through our upcoming ICAEW webinar:
20/05/2026 10:00 - 11:00 BST
