FCA Annex 1 restrictions: registration does not answer every counterparty question

The brief

The FCA announced restrictions on six Annex 1 lenders on 23 October following concerns about their anti-money laundering controls. These firms register for AML supervision; that status is different from wider FCA authorisation. Read the FCA release.

Our analysis focuses on the question behind a counterparty check. “Registered” is incomplete unless the record identifies the entity, the relevant activity and any restrictions that affect the proposed transaction. Ask the counterparty for its status, verify it independently and retain the evidence used. Then record the decision this evidence supports. A stored registration number should not become a permanent shortcut around a fresh question about whether the planned business can proceed under the firm’s current conditions.

The full record

The FCA says the restrictions were imposed at the firms’ requests and limit new customers or new business with existing customers, including extending existing credit, with terms differing by firm. The release stresses independent checks and says AML registration does not replace a regulated firm’s own due diligence. FCA announcement, 23 October 2026.

Our analysis: verify the permission relevant to the action

Begin with the proposed transaction. Identify the precise legal entity and the activity it would perform. Ask which status or permission is relevant to that activity, and who within your organisation is responsible for assessing it. An umbrella description of a business is not enough to answer those questions.

A counterparty’s reply is useful evidence of what it represented. It should be retained separately from the independent check and the conclusion reached. If the two differ, make the discrepancy visible rather than replacing one with the other.

Record the effective position

For a hypothetical new lending arrangement, capture the date of the status check and any conditions relevant to the action under consideration. Preserve the source and the reviewer’s explanation. Someone reviewing the file later should be able to tell which position was relied on, without treating today’s search result as proof of yesterday’s status.

Where restrictions contain exceptions, the responsible professional must assess the actual terms. A general news release cannot settle whether a particular transaction falls within an exception. This article makes no transaction-specific conclusion and does not reproduce allegations about individual firms.

Give changes a route into active work

Consider what happens if a material status change is discovered after onboarding. Identify the ongoing matters affected, the person who will assess the change and the instructions that need to be reviewed. Record whether work has been paused, allowed to continue or referred for further advice, with the reason.

Test that route using a fictional restriction. Start with the person who receives the information and follow it through to the colleague preparing the next transaction. A correct entry in a central register is of limited use if the person about to act cannot see its consequence.

Make the conclusion specific

Replace an unexplained “checks passed” label with a concise account of what was checked and what it permits the team to conclude. Keep unresolved questions open until an authorised person addresses them. The practical value lies in connecting status evidence to the next action, rather than accumulating screenshots of registration results.

This is an editorial control-design proposal. It neither supplies a legal opinion on a counterparty nor suggests that registration guarantees the quality of its controls.

Related reading: Verifying administration updates.

Read the FCA release of 23 October 2026. Individual restriction notices were not analysed, so the article makes no firm-specific exception or transaction conclusion. Proposed workflow is editorial analysis.

1. FCA: restrictions on six firms following AML concerns, 23 October 2026