FCA increases scrutiny of Annex 1 firms, including money brokers

The UK Financial Conduct Authority said it is applying increased scrutiny to Annex 1 firms, a category that includes unregulated lenders, safe custody providers, money brokers and financial leasing companies that need FCA registration for anti-money laundering purposes.

The regulator said it is concerned that some firms may facilitate financial crime, including cases where businesses rely too heavily on group-level controls or use procedures that are not tailored to their own risks and operations. The FCA also highlighted risks from unregulated lending conducted through complex structures, including special purpose vehicles.

As part of the review, the FCA said it has sent an information request to about 900 Annex 1 firms. Combined with earlier work covering 300 firms in late 2025, the regulator said this means it will have contacted all registered Annex 1 firms.

Why it matters

Money brokers and safe custody providers can sit close to trading, funding and collateral workflows. If the FCA tightens registration reviews or identifies weak financial-crime controls, affected firms may face slower onboarding, more questions from counterparties or pressure to strengthen governance before regulated firms continue doing business with them.

For traders, the practical risk is indirect but real: broker and platform relationships can depend on clean counterparty due diligence. A firm caught in an AML review may see service interruptions, delayed approvals or reduced access to regulated partners.

What to watch next

Watch whether the FCA follows its information requests with public enforcement, registration refusals or additional guidance for regulated firms dealing with Annex 1 counterparties. Firms should also expect registration applications in this sector to take longer.