A description of the key changes to the guidance is shown below but we strongly recommend all firms familiarise themselves with the updates to this key guidance document.
Changes to the guidance introduced via the 2026 Statutory Instrument
Enhanced due diligence (EDD) on complex transactions
The MLRs previously required EDD for all “complex or unusually large” transactions, which can create confusion and encourage overly cautious compliance.
The SI clarifies that EDD is required only for transactions that are “unusually complex or unusually large” in the context of the sector or transaction type. This does not create a new obligation; it simply refines the existing requirement so firms can focus resources on genuinely high-risk transactions rather than routine activity.
High-risk third countries
The updated regulations clarify that, where enhanced due diligence is required in relation to a person or transaction linked to a high-risk third country, this applies only to FATF “call for action” countries, often referred to as the FATF blacklist. In practice, firms’ assessments of high-risk jurisdictions are unlikely to change, and the CCAB AML Guidance for the Accountancy Sector encourages firms to refer to the AASG Risk Outlook when assessing jurisdictional risk.
Currency thresholds into sterling
The SI converts all monetary thresholds for CDD, reporting, and transaction triggers from euros to sterling, with some thresholds slightly adjusted to make sure they don’t impact the de minimis requirements set by the FATF.
TCSPs and off-the-shelf companies
The SI brings the activity of selling “off-the-shelf firms” within the scope of regulated activities for TCSPs. TCSPs selling off-the-shelf companies must now comply with all MLRs obligations, including CDD and ongoing monitoring.
Areas of the guidance that have been reviewed at HM Treasury’s request
EDD – general triggers
The guidance clarifies that the list of general triggers for EDD are a non-exhaustive and non-prescriptive list of risk factors that may be considered for when to carry out EDD.
Source of funds checks
Clarification that the effect of Regulation 28(11)(a) is that source of funds checks are necessary when a transaction appears to be inconsistent with the firm’s knowledge of the customer, the customer's business and risk profile. Any examples included within the guidance are non-exhaustive and non-prescriptive, ensuring they support a risk-based approach without imposing rigid requirements on when to carry out source of funds checks.
Additional section added to the guidance
Sources of evidence
A new section, based on JMLSG guidance, sets out the evidence that can be used to verify a beneficial owner’s identity. It introduces a hierarchy of reliable and independent documents, with a passport as the preferred form of evidence, alongside other acceptable documents. This does not change existing requirements but provides additional clarity to help firms apply the guidance more effectively.