OPBAS report on legal and accountancy professional body supervisors
Reform needed to improve the standards of supervision concerning AML
The Financial Conduct Authority’s (FCA) Office for Professional Body Anti-Money Laundering Supervision (OPBAS) published its latest report on legal and accountancy sector supervision on 28 April, which finds that professional body supervisors (PBSs) are continuing to demonstrate good levels of compliance with the UK’s money laundering regulations. However, OPBAS states that the necessary improvements in how such professional bodies supervise their members have not been good enough.
OPBAS oversees 22 PBSs, with an additional three that have delegated regulatory functions, which includes the Law Society, the Solicitors Regulation Authority, and the Institute of Chartered Accountants in England and Wales.
The fourth report on legal and accountancy sector PBSs states that although PBSs have improved in some areas, such as enforcement action where the value of fines has almost doubled since 2019, many PBSs still fall short of the standard expected by OPBAS. Specifically, the report finds that action taken against firms who break the rules was too slow in some cases, and that too many PBSs still fail to share information and intelligence proactively with regulators and law enforcement.
The FCA’s press release concludes that reform to improve the standards of supervision by PBSs is needed due to the continued lack of effectiveness across PBSs. Accordingly, OPBAS is said to be in support of the UK government’s plans to consult on proposals for AML supervisory reform. The latest OPBAS report details the priorities for the year ahead, which includes continuing to take proactive steps to enhance the effectiveness of the anti-money laundering (AML) supervision in the accountancy and legal sectors. More specifically, from May 2023 supervisory assessments will begin of PBSs against the updated OPBAS sourcebook, which sets out additional guidance on the outcomes PBSs need to achieve to improve the consistency and effectiveness of their AML supervision.
Commenting on the report’s findings, Emad Aladhal, FCA Director of Specialists, said: “The FCA is fully committed to playing a strong role in reducing and preventing financial crime, and, through OPBAS, we are able to have a broader reach into the legal and accountancy sectors as well as across financial services. Professional bodies are continuing to improve their oversight, but they need to be more ambitious and accelerate their efforts so that we can tackle money laundering more effectively. Over the next year, we will be looking to make greater use of all our regulatory tools, including enforcement action where appropriate, to make sure PBSs continue to improve and fulfil their obligations.”