HM Treasury (HMT) has published the draft Money Laundering and Terrorist Financing (Amendment and Miscellaneous Provision) Regulations 2025, accompanied by a policy note, for technical consultation. This follows HMT's 2024 consultation on improving the effectiveness of the UK Money Laundering Regulations (MLRs), with the government's response published in July this year. The consultation identified key weaknesses in the UK's anti-money laundering (AML) regime, including issues with pooled client accounts, trust registration, cryptoasset regulation and the practicalities of customer due diligence (CDD). The draft statutory instrument (SI) proposes targeted amendments to the MLRs 2017 and related legislation to address these concerns. The key changes are set out below.
Key changes include:
- Refining CDD triggers for letting agents and art market participants.
- Introducing flexibility for identity verification in bank insolvency cases.
- Narrowing enhanced due diligence obligations to focus on genuinely high-risk scenarios.
- Decoupling pooled client accounts from simplified due diligence framework.
- Strengthening information-sharing among AML supervisors.
- Clarifying registration and scope issues, including converting monetary thresholds from euros to sterling and requiring trust and company service providers to conduct CDD across the full range of Trust Company Service Provider services, including off-the-shelf company sales.
- Aligning cryptoasset firm registration with the Financial Services and Markets Act (FSMA).
The deadline for comments is 30 September, with respondents invited to assess the clarity, operability and potential unintended consequences of the draft provisions. Subject to feedback, the final SI is expected to be laid before Parliament in early 2026 and will take effect 21 days after being made. Provisions relating to cryptoasset businesses will align with the commencement of the FSMA cryptoasset perimeter.
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