FCA AML handover: can law firms retrieve the record?
The FCA plans to begin legal and accounting AML supervision in late 2028. A practical retrieval exercise can help firms examine their decision records.
The Financial Conduct Authority says it will begin taking on anti-money laundering supervision of 60,000 entities in the legal and accounting sectors towards the end of 2028. In a speech on 17 September, Steve Smart described a risk-based, intelligence-led approach and engagement with existing professional body supervisors. Read the FCA’s speech.
The number covers the two sectors together. It is not a count of law firms, and the date describes the planned start of the handover rather than its completion. The speech is an announcement of direction, not a complete implementation manual. The timetable and approach appear in the FCA’s “What’s changing” section.
For a law-firm operations lead, there is a useful question to examine now: can an authorised colleague reconstruct a completed decision from the material the firm retained?
Test reconstruction, not the size of the file
Our proposed exercise concerns record quality. It does not interpret the rules that apply to a particular firm or prescribe a retention period.
Choose a small, appropriately controlled sample of completed matters. Have the firm’s responsible compliance lead approve its scope and who may inspect the material. Keep confidential records within the approved environment and access arrangements.
Ask a reviewer who was not the original handler to follow one enquiry through to its resolution. The objective is to establish what was asked, what response was received, who evaluated it and why the resulting decision followed.
A folder containing many documents may still leave that sequence unclear. Conversely, a concise record may be useful if it points reliably to the relevant evidence and explains the decision. The exercise should test the connection between the parts.
Follow five links in the decision
- The question. Identify the concern or missing information that prompted the enquiry. Separate it from routine requests made for other reasons.
- The response. Find the answer and supporting material. Establish which version the reviewer considered, including any later clarification.
- The judgement. Locate the recorded explanation of how the response addressed the question. Do not fill an absent explanation with a new assumption.
- The authority. Establish who made or approved the decision and in what capacity. If an approval was conditional, find the condition and its subsequent treatment.
- The retained sequence. Check whether another authorised person could repeat the reconstruction using the same references, without access to the original handler’s personal memory.
These are our editorial test questions. They are not a list of new FCA requirements or a claim that a complete file proves the underlying judgement was correct.
Give different gaps different remedies
Record retrieval time, but do not make speed the only result. Distinguish information that is absent, information that exists but cannot be located, and information whose connection to the decision is unclear.
A missing explanation may need investigation by the responsible team. A difficult search may call for a better reference or filing convention. An unclear approval may require a clearer assignment of responsibility. Buying another system before identifying the gap risks leaving the same problem in a new place.
Preserve the distinction between a contemporaneous record and a later clarification. If the original handler supplies an explanation during the exercise, identify it as a new explanation with its actual date. Do not present it as evidence that was recorded at the time.
Finish with an owner and a repeatable check
Give each identified gap an owner, an agreed remedy and a date for another review. Repeat the exercise on a different suitable sample after the remedy. Keep the result narrow: this shows whether the tested records became easier to reconstruct, not whether the whole firm has passed a compliance assessment.
The practical takeaway is to make one decision understandable to someone who was not there. That is the formal communication issue within the coming handover: preserving the relationship between an enquiry, a response, an authorised judgement and its record.
For the earlier stage of the exchange, our SRA scam-alert analysis examines how a client can check the source and authority of an instruction.
This record reports the timetable and approach stated in the FCA’s 17 September 2026 speech, checked on 29 September. It does not interpret legislation or provide a transition checklist. The retrieval exercise is original editorial analysis, not a regulator-endorsed test. We have not reviewed the files or controls of any law firm.