Treatment of beneficial owners, officers and managers (BOOMs) in ICAS firms
Beneficial owners, officers, and managers (BOOMs) not properly approved by ICAS still constitute one of the most common findings during our anti-money laundering (AML) monitoring visits. This article provides a quick reminder of the key requirements, to help all firms meet the requirements.
Regulation 26 of the Money Laundering Regulations 2017 requires that individuals with certain roles in supervised firm must first be approved by the provisional body supervisor. These individuals are beneficial owners, officers and managers, collectively referred to as BOOMs. For firms supervised for AML by ICAS, each of the BOOMs must be approved by ICAS.
While the 2017 Regulations include a definition for a BOOM, guidance has been prepared by the Accountancy AML Supervisors Group to make it easier for firms to identify who is included.
The roles and positions that should be considered respectively as beneficial owners, officers, and managers are summarised as follows:
Officer
- A sole practitioner.
- A partner in a partnership (including a Scottish Limited Partnership (SLP)).
- A member in a limited liability partnership (LLP).
- A director or company secretary in a limited company.
- A member of the firm’s management board or equivalent.
Beneficial owner
- A sole practitioner.
- A partner or LLP member in a firm who (i) directly or indirectly, holds more than 25% of the capital or profits or voting rights, or (ii) exercises ultimate control.
- A shareholder in a limited company who (i) directly or indirectly, holds more than 25% of the shares or voting rights, or (ii) ultimately owns or exercises ultimate control.
Manager
- The nominated officer (the MLRO).
- The member of the board of directors (or the equivalent management body) or of its senior management as the officer responsible for the firm’s compliance with the 2017 Regulations.
- Any other principal, senior manager, or member of a management committee who is responsible for setting, approving or ensuring the firm’s compliance with the firm’s AML policies and procedures in relation to the following areas:
- Client acceptance procedures;
- The firm’s risk management practices;
- Internal controls, including employee screening and training for AML purposes;
- Internal audit or the annual AML compliance review process;
- Customer due diligence, including policies for reliance; and
- AML record keeping.
The three most common BOOM issues identified by ICAS on AML monitoring visits are:
- When a manager is not a member of the board or a senior management structure, yet their responsibilities include important AML decisions which consequently makes them a BOOM.
- When a spouse of a partner is the company secretary – even if they play no active part in the firm, they are still a BOOM, as they are an officer of the firm.
- When a spouse is a partner, director (officer) or shareholder (beneficial owner), although not involved in the firm, they are still a BOOM.
It’s important to remember that these roles are classified as BOOMs, regardless of whether a professional qualification is held or not.
It is the firm’s responsibility to ensure that relevant roles and positions are correctly identified and approved by ICAS. A failure to do so could lead to regulatory action being taken by ICAS, including financial penalties. This can be easily avoided by notifying ICAS as soon as possible when any changes take place in your firm.
On an annual basis we ask you to review and confirm all the firm’s BOOMs during the AML Declaration submission. It is also the firm’s responsibility to ensure only appropriate individuals act as BOOMs, and for this reason firms will be required to confirm that each of their BOOMs is ‘fit and proper’ and has not been convicted of a relevant offence.
If you have any queries regarding BOOMs definition, please contact: regulatoryauthorisations@icas.com
More information on ICAS’ BOOMs approval process and AML supervision:
