FCA Annex 1 Firms

FCA Annex 1 firms are supervised for anti-money laundering (AML) purposes by the Financial Conduct Authority. As part of the supervisory regime, firms must register directly with the FCA for AML, including obtaining FCA online access credentials, registering the company and relevant senior responsible individuals (such as the MLRO/AML lead), and participating in the FCA’s formal application process.

Once registered, Annex 1 firms are subject to ongoing FCA AML supervision, which includes risk-based interaction, periodic reviews, and the expectation that firms maintain and evidence effective AML frameworks and controls in practice.

The FCA expects Annex 1 firms to demonstrate that their AML frameworks are robust, proportionate and operating effectively in practice. Firms must not only have documented policies and procedures, but also be able to evidence that AML controls are consistently and appropriately applied.

These expectations have been reinforced by the FCA through its Dear CEO letter to Annex 1 firms, which highlighted areas of supervisory concern and made clear that firms operating in this sector are expected to meet strict AML standards.

In particular, the FCA expects Annex 1 firms to be able to demonstrate that they have:

• A firm-wide risk assessment tailored to the nature, scale and complexity of their Annex 1 activities
• AML policies, controls and procedures that are embedded into day-to-day operations and decision-making
• Customer due diligence (CDD) and enhanced due diligence (EDD) applied consistently, with clear and complete documentation
• Effective governance, oversight and escalation arrangements, including clearly defined AML responsibilities
• Appropriate ongoing monitoring, periodic review and effective challenge
• Training that is role-appropriate, up to date and properly recorded
• Well-maintained audit trails and evidence demonstrating how AML decisions are made, reviewed and overseen

The FCA’s Dear CEO communication underscores its outcomes-based, evidence-led approach to supervision, with a particular focus on governance, accountability and the effectiveness of AML controls in practice — not simply the existence of policies.

The AML Practice supports Annex 1 firms at every stage of AML compliance and supervision readiness. Specifically, we help firms to:

• Conduct gap analyses and AML audits aligned to FCA supervisory expectations
• For new firms, prepare for and complete FCA AML registration, including platform access, business and senior personnel filings
• Develop and enhance AML policies, procedures and risk assessments tailored to Annex 1 risk profiles
• Provide trainings and refresher sessions tailored to FCA AML expectations
• Deliver clear, FCA-ready attestation and evidence documentation
• Offer ongoing AML support, including ad-hoc advice, regulatory updates, newsletters and supervisory engagement support

Our approach is grounded in real-world application and regulator-ready documentation, giving firms confidence that their AML frameworks are proportionate, effective and capable of standing up to FCA scrutiny.