Proposed AML Regulation Changes: What Conveyancers Need to Know

The proposed changes to the Money Laundering and Terrorist Financing Regulations aim to make Anti-Money Laundering (AML) checks more effective, targeted, and proportionate. For conveyancers, these changes will bring both simplifications and new responsibilities. One key update is the clarification of Customer Due Diligence (CDD) rules, ensuring that the triggers for these checks are consistent across industries. This will make it easier for conveyancers to understand when CDD checks are required, reducing confusion and unnecessary work.

Enhanced Due Diligence (EDD) requirements are also being refined. EDD will now only apply to countries on the highest-risk list, rather than a broader list, and will focus on transactions that are unusually large or complex for the sector. This change allows conveyancers to concentrate their efforts on genuinely high-risk transactions and jurisdictions, saving time and resources on routine cases that do not pose significant risks.

Pooled Client Accounts (PCAs) are another area of change. Banks will no longer automatically treat PCAs as low-risk and will instead assess the purpose and risks of each account. Conveyancers using PCAs will need to provide banks with information about the individuals whose funds are held in these accounts, which may require additional administrative work. However, this change aims to increase transparency and improve oversight.

Coordination between supervisory bodies is also being strengthened. Organizations like Companies House and the Financial Conduct Authority (FCA) will share more information to improve oversight and streamline processes. For conveyancers, this could mean better access to relevant information and smoother compliance procedures.

Trust registration requirements are being expanded, with more types of trusts now required to register and provide details about their beneficial owners. Conveyancers handling property transactions involving trusts will need to ensure that these trusts are properly registered and compliant with the new rules. Additionally, all financial thresholds, such as the £10,000 trigger for CDD checks, will now be in pounds rather than euros, simplifying compliance by eliminating the need for currency conversions.

The sale of off-the-shelf companies will now be a regulated activity, requiring CDD checks. Conveyancers working with these companies will need to ensure they meet AML requirements. Meanwhile, changes to the regulation of cryptoasset businesses will have minimal direct impact on conveyancers unless they are involved in transactions with such businesses. Other minor updates, such as clearer exemptions for certain funds and stricter rules for cryptoasset businesses working with foreign banks, contribute to a more streamlined AML system.

Overall, these changes aim to make AML checks simpler, more focused, and effective. For conveyancers, this means clearer rules, less unnecessary work, and a greater focus on genuinely high-risk areas. While some additional administrative effort may be required, particularly for pooled accounts and trust registration, the updates are designed to create a more efficient and targeted system.