The FCA's bid for legal and accounting AML supervision: what changes for regulated firms

The FCA has put its hand up for a significantly larger AML remit. In a speech at the Law Society Economic Crime Conference on 17 September, Steve Smart, executive director of enforcement and market oversight, declared the regulator ready to supervise the legal and accounting sectors, framing the pitch around expertise, intelligence-led supervision, and a promise to target enablers rather than compliant firms (FCA).

Key Executive Takeaways

• The FCA is positioning to become the AML supervisor for legal and accounting firms, extending its intelligence reach into the professional services that sit alongside banking flows.
• Financial services firms should expect greater regulatory expectation to share intelligence under the Economic Crime and Corporate Transparency Act, with the NCA's data fusion programme cited as the operating model.
• Enforcement posture is hardening in parallel: the FCA's 10 September operation against illegal peer-to-peer crypto trading shows the same intelligence-led approach applied on the ground.

A supervisory expansion with second-order effects

Smart's framing matters as much as the ask. He anchored the case in scale, citing fraud as nearly half of all crime in England and Wales last year and estimates that over £100bn is laundered through or within the UK annually (FCA). If the FCA succeeds in absorbing supervision from the current patchwork of professional body supervisors, banks and asset managers gain a single counterparty for intelligence on the lawyers and accountants who structure client transactions. That is a material change in how suspicious activity flows are triangulated. It also means that the professional advisers sitting between a bank and its client will, over time, be held to a supervisory standard the bank's own MLRO can more readily interrogate.

Partnership is being redefined as an obligation

Smart's repeated emphasis on partnership is not rhetorical. He explicitly backed the NCA's data fusion programme, which combines banking data with law enforcement and regulatory intelligence, and pointed to the Economic Crime and Corporate Transparency Act as the safe route for firm-to-firm information sharing (FCA). Senior leaders should read this as a shift from voluntary cooperation to expected participation. Firms that opt out of intelligence-sharing mechanisms will increasingly look like outliers when supervisory conversations turn to systemic controls.

Enforcement is running in parallel, not sequentially

The same day Smart delivered his speech, the FCA publicised a coordinated operation with HMRC and the Metropolitan Police Service, targeting three London premises suspected of illegal peer-to-peer crypto trading and issuing cease and desist letters on 10 September 2026 (FCA). Smart's warning that 'Anyone running an unregistered peer-to-peer crypto business should assume we are looking at them' is a signal that the intelligence-led model is already producing operational output (FCA). There are currently no FCA-registered peer-to-peer crypto businesses operating in the UK, which sharpens the perimeter considerably (FCA).

What senior leaders should do now

Three practical implications follow. First, banks and insurers should audit their exposure to professional services intermediaries on the assumption that supervisory standards for those firms will rise, and rise under a familiar regulator. Second, boards should ask MLROs whether the firm is an active participant in NCA data fusion and ECCTA information-sharing gateways, or a passive recipient of typologies. Third, given the parallel enforcement cadence on crypto, firms with any exposure to peer-to-peer flows should assume the FCA's operational tempo will continue. The hive metaphor Smart borrowed from the Bank of England Museum is doing real work: the regulator is telling the market that every actor is expected to check what comes through the door, and the cost of not doing so is about to become more visible.