On 18 July 2024, the UK Financial Conduct Authority (FCA) published the findings of its multi-firm review on firms’ treatment of politically exposed persons (PEPs). This review is likely to be of interest to family offices and their advisers for the following reasons:
• UBOs of family offices are often treated as being within the scope of the PEP categorization.
• An overly restrictive approach to KYC and AML controls on the part of financial institutions can create friction and delays for family offices and their UBOs, and the FCA’s findings may provide some basis to push back on or query the approach on this point (see below).
• Given the FCA’s strong public stance on the PEP issue, we may see other global regulators following the UK’s lead in the future.