FAQs - Dear MLRO letter

To notify us, you need to use the notification form on our website:

A sample form, showing how you should complete it (including suggested wording for the notification), is also available.

15 January 2008.

You must tell us within 28 days of beginning this activity.

To be an MSB or TCSP, you must be undertaking these activities by way of business. Also, in this case, you are not transmitting money yourself, but are making using money transmission services provided by others. So you are not a money transmitter and you do not need to notify us.

When you transmit mortgage advances, you are probably using money transmission services (e.g. BACS/CHAPS payments) that someone else provides (usually a bank). If you are not providing the money transmission service yourself, then you do not need to notify us.

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Yes, you will need to notify us again using the form. This is because we have now upgraded our systems to reflect these changes.

If the firm offers bureaux de change services, or is a cheque casher, but only on an 'occasional or very limited basis', it will not be necessary to notify us. This is because Regulation 4(2) of the Money Laundering Regulations 2007 says financial activity that is undertaken on an 'occasional or very limited basis' is not subject to the Regulations. Trust or Company Service Providers and money remitters are not able to benefit from this exemption. The phrase 'occasional or very limited basis' is defined quite tightly in Schedule 2 of the Regulations. MSB activity must satisfy all the following criteria to qualify from the exemption:

• The business must not be a money remitter.
• Total yearly turnover from MSB activity must be less than £64,000.
• MSB activity is limited to no more than one transaction exceeding €1,000 for any customer, whether the transaction is carried out in a single operation, or a series of linked operations.
• MSB activity does not exceed 5% of the total yearly turnover.
• MSB activity is supplementary and directly related to your main activity.
• Your main activity does not fall within Regulation 3(1)(a) to (f) of the Money Laundering Regulations.
• You only provide MSB activity to customers of your main activity and you do not offer it to the public.

(Updated 12 June 2008: previous text suggested that TCSPs could qualify for this exemption, which is incorrect. For queries on this point, please contact moneylaunderingregulations@fsa.gov.uk)

We sent our Dear MLRO letter by email only to the firms we felt were likely to be affected. This was to avoid burdening firms with information that was not relevant to them. But we published a copy on our website to ensure everyone had access to it.

We do not make assumptions about the activities individual institutions perform. The notification also covers services like trust and company service provision – not all banks would do this. So you still need to make a notification.

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Check you are using the right form. Some firms have tried to use the wrong registration form that unregulated 'Annex I' businesses (like leasing companies, safety deposit box providers, etc) need to use to register with us. You can find the right form below:

Notifications form [PDF]

You should not read section 31(2)(a) by itself – you must also read 31(2)(b). This states that 31(2)(a) only applies if you notify us before 15 January 2008 (see Question 2). Our 'Dear MLRO' letter explains the requirement to make the notification that is described in 31(2)(b).

You can find this in Regulation 3(10) of the Money Laundering Regulations 2007. Please see page 8 of the Treasury's consultation paper on implementing the Third Money Laundering Directive. This is available on their website.

This can be found in Regulation 2(1) of the Money Laundering Regulations 2007. Please see page 5 of the Treasury's consultation paper on implementing the Third Money Laundering Directive. This is available on their website.

Yes. To be a money services business or a trust or company service provider, you must be undertaking these activities by way of business. When deciding whether this is the case, you should consider whether you have set up a business with the intention of undertaking the activities, whether you advertise or publicise the provision of the activities, and whether the activity is carried out for money or other benefit. (Updated 12 June 2008. This text now reflects the definition of 'by way of business' prepared by HM Revenue and Customs. For queries on this point, please contact moneylaunderingregulations@fsa.gov.uk).

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You do not need to notify us if you introduce customers to a trust or company service provider or a money service business.

Yes – it applies to all authorised firms. If you are also a money service business or a trust and company service provider, you should tell us using the Notifcations form. This requirement stems from Regulation 31 of the Money Laundering Regulations 2007 that came into effect on 15 December 2007.

An exception is firms who offer mainstream regulated activities and which are supervised either by the Institute of Chartered Accountants in England and Wales (ICAEW) or the Solicitors Regulation Authority (SRA). We have agreed with the ICAEW and SRA that they will oversee TCSP activity undertaken by these firms. We may extend to members of other professional bodies listed in Schedule 3 to the Regulations, although we have not yet reached agreement with those bodies.

If a legal entity is an unauthorised TCSP or a MSB, the HMRC will oversee it. We are not offering firms the opportunity to change their supervisor.

The Money Laundering Regulations 2007 do require that authorised persons have appropriate risk-based systems and controls in place to identify where customers are politically exposed persons. It is, however, the firm's responsibility to think about what controls would be right for them. So there is no requirement to use the systems described above. The Joint Money Laundering Steering Group's (JMLSG) guidance contains detailed information about practical steps you can take to meet your obligations. This is in two parts, and you can find it on the JMLSG website at:

Part 1 | Part_II

Part I contains more detail about PEPs. See pages 49, 50 and 51 in particular. Section 5.5.27 discusses alternative means by which you can research whether a customer qualifies as a PEP.

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Each legal entity that performs one or more of these activities will need to apply separately. However, you need only use one form for this.

Be aware that, if your group contains unauthorised legal entities that perform MSB or TCSP activities, or provide certain other services such as leasing or safety deposit boxes, they may have to register separately (either with us or with another supervisory authority). For more information about this, see What is required of businesses that will need to register?.

If you are an agent of a company that transmits money you do not need to notify us of this.

A TCSP will be supervised by HM Revenue and Customs, unless we authorise it. If we do, we will also supervise it. It will not be necessary for a legal entity that is a trust or company service provider to register with both us and HM Revenue and Customs. You can find a flowchart [PDF] summarising this on our website.

To find out more about HMRC's role in this area, please see their website.

Our web pages at www.fsa.gov.uk/mlr contain more detail, as well as useful contacts and definitions.

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Yes, it is likely that many building societies will undertake activities that need to be notified to us under Regulation 31 of the Money Laundering Regulations 2007.

No: it is our view that a "cheque casher" cashes cheques issued by a third party that are made payable to customers.

Regulation 31 of the Money Laundering Regulations 2007 require that an 'authorised person' must notify us when they act as a "money service business" or a "trust or company services provider". Authorised person in this sense means a person who is authorised under the Financial Services and Markets Act 2000. We understand that a London branch of an EU regulated bank would be an authorised person under Schedule 3 to the FSMA. As such, the Money Laundering Regulations will apply to activities that it carries on in the UK from its branch. It follows that it will need to notify us if it acts or proposes to act as a TCSP or MSB.

No. In this case, your bankers are making a money transfer on your behalf. As such, you do not act as a money transmitter.