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UK FSA Warns Will be Examining Firms’ Data Practices Around AML

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The UK Financial Services Authority (FSA) has given the industry a heads up in its latest newsletter that it will be scrutinising firms’ systems and controls around anti-money laundering data, especially for politically exposed persons (PEPs), over the course of the next five months and going into next year. Details of the regulatory project are scant at the moment, but the regulator is bound to assess firms’ overall data management efforts to maintain this data in a timely manner.

As noted recently by WestLB’s executive director of operations control Sarah Feast and Royal Bank of Canada’s global head of reference data Julia Sutton, getting a handle on client data from across an organisation is far from a simple process. Both firms are working with a number of vendor partners in order to get their data into shape for incoming regulatory requirements and to meet current requirements in a more efficient and timely manner.

Given the FSA’s current bent towards heavy penalties for those it finds in non-compliance with regulations such as MiFID, firms can expect a heavy handed approach to be taken in regard to AML infractions also. Moreover, the regulator’s ability and intent to drill down to a much more granular level of data detail (as exhibited in its fining of BarCap last year for transaction reporting failures), should also be heeded.

The FSA has indicated, however, that the firms involved in the review have all now been contacted (you have been warned) and the results will be published in the first quarter of next year.

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