The FCA tightens scrutiny of Annex 1 firms and their registrations

On 7 August 2026 the Financial Conduct Authority published a statement setting out closer scrutiny of Annex 1 firms. These are businesses that sit outside the authority’s ordinary authorisation regime but must register with it for anti-money-laundering purposes. The category covers unregulated lenders, safe custody providers, money brokers and financial leasing companies.

The statement gives two reasons. The FCA says it is concerned about the potential for these firms to facilitate financial crime, and about the risks to consumers and markets from unregulated lending often conducted through complex structures. It also names a specific weakness it has found: firms inside a group relying on the parent company’s controls without tailoring them to their own operations. Each individual firm within a group, the FCA states, must assess whether those controls are appropriate.

Three consequences follow, each of them stated by the authority itself. Firms carrying on Annex 1 activity without being registered are told to apply now. Firms with applications in progress are told to expect registration to take longer, because applications are being examined more closely. Regulated firms that deal with Annex 1 firms are told to continue their due diligence and to seek confirmation of registration status directly.

The FCA also reports that it has sent information requests to around 900 registered Annex 1 firms in order to understand their activities, business models and risks. That follows similar contact with 300 firms in late 2025. It is a supervisor asking a large part of a sector to describe itself in writing.

A request of that kind is answered from records rather than from recollection. A firm that can produce dated, unaltered evidence of the checks it ran and the decisions it took answers in days instead of reconstructing years of work under time pressure.