FSA scraps anti-money laundering proposals
22 July 2003 | 7165 views | 0
The Financial Services Authority has scrapped proposals to make all UK financial institutions undertake a special review of their current customers' identity.
The FSA had been contemplating the rule change to bring the sector into line with the six largest banks, which had independently decided to extend their own anti-money laundering checks to cover historical accounts held by millions of customers.
The watchdog backed away from the plans following a study by PricewaterhouseCoopers that showed that time and IT costs were prohibitive and that any new regulatory obligation would unduly inconvenience customers. PwC estimated that the total cost to the industry of such a move could run to over £170 million.
Carol Sergeant, FSA managing director, says: "This was a difficult decision but given the findings, across the whole of the regulated sector, of the cost-benefit analysis, we could not be satisfied that a mandatory approach would be justified."