The Financial Conduct Authority (FCA) said the restrictions were imposed at each firm’s request, limiting their ability to take on new customers and to conduct new business with existing customers, including extending existing credit.
Property lender Kingscrown Finance had voluntary restrictions imposed on its business in April this year, stopping the lender from onboarding new customers or undertaking new business with existing customers, including extending existing credit.
Further voluntary restrictions were imposed in September, limiting how the lender receives payments from existing customers and the requirement to wind down its existing loan book.
The remaining voluntary restrictions were imposed this month, preventing real estate lender MOMSB and bridging lender Momentus Capital from taking on new customers or entering into new lending arrangements, subject to limited exceptions. The firms are also restricted in the circumstances under which they can accept payments from existing customers, and they must undergo an independent review of their AML framework.
Bridging lenders Grosvenor Funding and Grosvenor Funding (North West) have been restricted from taking on new customers or lending arrangements, the circumstances in which they receive payments from existing customers and undergo an independent review of their AML framework.
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Bridging and development finance lender Abbital has been placed under the same voluntary restrictions.
The FCA said the action was part of its enhanced oversight of Annex 1 firms, adding that the firms operate in sectors “that can present a heightened risk of money laundering and other financial crime”.
Annex 1 firms must register with the FCA for supervision under Money Laundering Regulations but are not subject to wider FCA regulation.
Earlier this year, the FCA said it would increase its scrutiny of Annex 1 firms and require them to demonstrate that they understand financial crime risks and have effective systems and controls in place to manage those risks.
The regulator is also assessing responses to an information request sent to around 900 registered Annex 1 firms to identify and disrupt financial crime risks, and determine where further action is needed.
It has also reminded regulated firms to do their due diligence when dealing with Annex 1 firms, including seeking direct confirmation from the firm of its registration status, conducting independent checks of the information it provides, and understanding and managing any risks.
Steve Smart, executive director lead for fighting financial crime at the FCA, said: “We have warned Annex 1 firms that they face increased scrutiny. They must demonstrate they can manage the money laundering risks they face. Where they cannot satisfy us, we will intervene.”
