FG25/3: Treatment of politically exposed persons

Read FG25/3 (PDF) 

Why we're issuing this guidance

We are updating our guidance to reflect changes to the legislative framework in the UK since 2017. 

In the updated guidance, we:

• Clarify that firms should not treat non-executive Board members of civil service departments in the UK as PEPs.
• Reflect changes to The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (Money Laundering Regulations 2017) .
• Update sign off for PEP business relationships. 

A PEP is someone holding a prominent public position who is entrusted with prominent public functions either in the UK or elsewhere in the world. 

Who this is for 

The changes will be relevant to FCA-supervised firms under the Money Laundering Regulations 2017.  

They may also be of interest to:  

• Individuals and organisations working with firms subject to our supervision.
• Financial services trade associations.
• Any other parties interested in our anti-money laundering supervision, such as non-governmental organisations working on financial crime prevention or academics.
• Customers who meet the definition of a PEP, close family member or known close associate in the UK or elsewhere. 

Next steps

Firms should read our Final Guidance with our multi-firm review (PDF) of the treatment of politically exposed persons published in July 2024. 

Background

We first produced guidance in July 2017 (FG17/6 PDF) for firms in dealing with PEPs.

Under the Financial Services and Markets Act 2023, we needed to review the way that firms are applying our guidance and consider whether it required any changes.

We completed a review and consulted on proposed changes (PDF).

Generally, we found that our guidance remains appropriate. However, we identified several areas where we have amended our guidance due to legislative changes or to make it clearer to help firms comply.