FCA warns of gaps in brokers' money laundering controls

(Sharecast News) - The UK's financial watchdog said on Thursday that wholesale brokers must do more to improve their money laundering safeguards. The Financial Conduct Authority said that following a review, it had identified several problem areas.

These include underestimating the money laundering risks firms are exposed to; over-reliance on others in the transaction chain to complete due diligence on customers; and limited information sharing between firms.

Steve Smart, FCA joint executive director of enforcement and market oversight, said: "The flow of capital is an essential part of a thriving and competitive market, but tainted cash must not be allowed to pollute the rest.

"For the UK financial services industry to grow, investors and institutions need to have trust in it.

"Firms needs to keep their controls under review and ensure they are effective against financial crime."

The FCA said it would now work closely with firms, industry and law enforcement to improve both understanding and information sharing about emerging risks.