Changes to the UK Money Laundering Regulations: What you need to know

The UK’s anti-money laundering rules are changing. While some changes aim to reduce compliance burdens, others introduce new requirements that accountancy firms will need to prepare for.

The Money Laundering and Terrorist Financing (Amendment) Regulations 2026 was initially laid before Parliament in March 2026 before being paused when Parliament was prorogued. The legislation has now been laid before Parliament again and will come into law on 30 June 2026.  

The amendments will update the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (“2017 Regulations”). The aim is to improve the effectiveness of the existing framework and respond to emerging risks.  

The changes you should know about 

While the legislation contains a number of amendments, the following changes are the ones most likely to affect accountancy firms and their clients.  

Mandatory Enhanced Due Diligence for FATFs high-risk third countries   

Current regulations require firms to carry out enhanced due diligence (EDD) for situations involving high-risk third countries on the Financial Action Task Force’s (FATF's) black list, known as the “call for action” list, and the FTAF grey list (jurisdictions under increased monitoring).  

Under the new regulations, mandatory EDD will only apply to countries on the FTAF black list. This currently includes Iran, Myanmar and the Democratic People’s Republic of Korea. However, the FATF grey list remains a valuable source of information when assessing the AML risk, particularly where clients trade internationally or have businesses overseas. Firms should continue to consider the list as part of their wider risk assessment process. 

EDD for transactions that are unusually complex and unusually large  

The current regulations require EDD for transactions that are “complex or unusually large”. 

Under the changes, this will become transactions that are “unusually complex or unusually large in each case given the nature of the transaction”. Although the change in wording seems small, it places greater emphasis on transactions that seem out of place and ensures additional scrutiny is applied to them.  

Thresholds will move from euros to pounds sterling 

References to euros will be removed and thresholds will instead be given in pounds sterling.  

This should reduce the administrative burden for accounting firms by removing fluctuations to the thresholds caused by moving exchange rates.  

Trust or Company Service Provider (TCSP) changes  

The sale of “off-the-shelf” companies will be brought into the scope of TCSP activity. Anyone providing this service will therefore need to comply with AML and Counter Terrorist Financing (CTF) regulations.  

“Off the shelf” firms are defined in the legislation as “a firm that either does not carry on business or carries on business, but such business is not the main activity carried on by the firm or sole practitioner selling the firm.”  

This is unlikely to affect many accountancy firms as very few now pre-incorporate “off-the-shelf” firms.    

Pooled client accounts  

The 2026 Regulations will bring changes to the provisions for pooled client accounts.  

Accountancy firms that hold client money in a pooled account will have additional obligations under the 2026 Regulations alongside those already required under the ICAS Clients’ Money Regulations. 

These obligations include maintaining accurate and up-to-date written records of all money paid into and out of the pooled account, which you are required to do under the CMRs, for a period of five years. Firms must also be able to provide information, if requested, about the identity of the individuals and beneficial owners on whose behalf the money is held in the pooled account. 

New requirements for cryptoasset businesses 

There will be new regulations for cryptoasset businesses, including counterparty due diligence requirements and alignment with the Financial Services and Markets Act 2000 framework.  

New EDD will also apply to crypto-asset exchange providers and custodian wallet providers.

When will the changes take effect? 

Most of the provisions will come into force on 30 June 2026.  

Some of the specific provisions, such as enhanced customer due diligence for crypto businesses, will come into effect in 2027.  

What you can do to prepare  

A review of your AML policies, procedures and training materials will help make sure your staff understand the changes. You should consider whether any updates are needed to client money processes to comply with the new regulations around pooled accounts. We don’t expect that you’ll need to make any changes if you’re complying with the Clients’ Money Regulations. 

AML policy documents should be updated to reflect pound sterling thresholds rather than euros. Mandatory EDD policies should also be revised to reflect the changes relating to situations involving high-risk third countries and transactions that are unusually complex and unusually large. 

Other AML changes in development 

Alongside these regulatory changes, guidance produced by the Consultative Committee of Accountancy Bodies is also being updated to improve clarity of AML requirements for firms. We’ll share more on this once it becomes available.