The UK’s risk-based approach to the “Politically Exposed Persons” regime – section 30 of the Bank of England and Financial Services Act 2016

The Bank of England and Financial Services Act 2016 (the “Act”) paves the way for a more risk-based approach to the Politically Exposed Persons (“PEPs”) regime in the UK, in response to what the House of Lords has identified as its disproportionate application in practice to medium-ranking and junior officials. Section 30 of the Act requires the Financial Conduct Authority (“FCA”) to issue guidance on the definition of a PEP, which may require regulated entities to take a proportional, risk-based and differentiated approach to different categories of PEPs, and empowers the Secretary of State to regulate the FCA’s handling of complaints about the way in which regulated firms have interpreted their obligations under the PEP regime. The move comes in the wake of the extension of the PEP regime under the Fourth EU Money Laundering Directive, which will see UK officials fall within the PEP definition. The FCA’s PEP guidance is expected later this year.

In this briefing we examine the new provisions in more detail and explain that, whilst they have the potential to have a positive impact in terms of clarity around PEP obligations, equally they may leave firms exposed to action for over-, as well as under-complying with regulatory requirements.

Read the full article below:

The UK's risk-based approach to the "Politically Exposed Persons" regime - section 30 of the Bank of England and Financial Services Act 2016 | Lexology

The Bank of England and Financial Services Act 2016 (the "Act") paves the way for a more risk-based approach to the Politically Exposed Persons...


about encompass

Founded in 2011 by entrepreneurs Roger Carson and Wayne Johnson, and operating from the UK, encompass is the creator of unique, innovative Know Your Customer (KYC) software for banking, finance, legal and accountancy that enable better, faster commercial decisions. The company is driven by the belief that the best decisions are made when people understand the full picture.

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