The Financial Conduct Authority (FCA) has assured the legal community it is “not looking to catch you out” where firms are “ trying to do the right thing” in a speech delivered by executive director of enforcement and market oversight, Steve Smart at the Law Society Economic Crime Conference 2026.
In a transfer of powers, the FCA is set to begin the takeover from the Solicitors Regulation Authority (SRA) and other supervisors in late 2028, a phased transition that aims to reach completion by 2030.
Addressing the regulator’s future approach Smart, said the FCA will take an “risk-based, intelligence-led approach” to targeting money laundering, adding that the information being requested from firms will depend on “the risk you face”, however inevitably the FCA aims to reduce duplication and firm burden where it can.
He said: “We know most of you uphold strong standards and have proportionate controls in place. But the small minority who enable crime should expect us to find them – and to face consequences.
“Rooting them out protects your reputation and keeps this a level playing field.”
Smart said the financial regulator has the expertise, tools and intelligence to supervise the sectors “effectively”, while noting the importance of “partnership” between regulators, firms and law enforcement in a joint effort to tackle financial crime.
“Fraud accounted for nearly half of all crime in England and Wales last year, and estimates suggest that over £100 billion is laundered through or within the UK each year,” Smart explained.
“At the FCA, we disrupt financial crime every day across thousands of firms, and we are acting against the full spectrum of financial crime – from fraud and online scams to money laundering and insider dealing.”
Smart spoke alongside the head of AML proactive supervision at the SRA, Mandeep Sandhu, both covering topics around the importance of information sharing in disrupting criminal activity, trends in suspicious activity, how AI technology can support faster identification of risks and the recently published Anti-Money Laundering and Asset Recovery (AMLAR) Strategy 2026-2029.
As firms anticipate the potentially stringent changes the FCA will make in the coming years, Smart reassured the legal sector that “we’re on the same side, confronting the same enemy: the criminals”.
What we know so far
To date the FCA has announced in relation to AML supervision, it will:
- maintain a public register of supervised firms
- require registration as a condition of carrying out AML-regulated activity
- gain powers to cancel registrations where firms are no longer undertaking regulated activity
- apply strengthened ‘fit and proper’ assessments (Regulation 58) across legal and accountancy sectors.
An emphasis on “strong collaboration” across the public and private sectors remains “essential” to protecting the UK from financial crime and strengthening the collective response to emerging threats, the FCA said.
