Question to the HM Treasury:

To ask Her Majesty's Government who is responsible for the regulatory interface between HMRC and the Financial Conduct Authority in respect of money service businesses; and what measures are in place to ensure that individual businesses do not fall between the supervision of either body.

The Treasury is responsible for appointing Anti Money Laundering and Counter Terrorism Financing supervisors under the Money Laundering Regulations and works closely with them to ensure they deliver the government’s objective of a robust risk-based approach to supervision.

Whilst supervision of the sector is shared between HMRC and FCA, responsibilities on an individual firm basis are clearly allocated to each supervisor and both HMRC and FCA hold registers of entities subject to their supervision. The FCA is the supervisory authority for credit and financial institutions, including money service businesses (MSBs), when they are authorised persons under the Financial Services and Markets Act 2000. HMRC is the designated supervisor for non-financial institution MSBs that are not otherwise supervised by the FCA.

Each supervisor is responsible for reviewing the AML compliance of MSBs under their supervision using a risk-based approach. The registration process for an MSB involves scrutiny of all beneficial owners, officers and managers to determine whether they are fit and proper to hold these positions. Both supervisors have established procedures for working collaboratively on policing the gateway and on the AML supervision of the MSB sector. This is underpinned by a joint FCA/HMRC Memorandum of Understanding and established legal gateways for sharing information and expertise.