Only firms in the regulated sector are required to report suspicious transactions under POCA and to comply with the requirements of the 2017 Regulations, as amended. In addition, nominated officers appointed by organizations in the non-regulated sector to receive disclosures of suspicions transactions, have reporting requirements under POCA.
The regulated sector includes the following types of businesses when acting in the course of business carried on by them in the United Kingdom:
- financial sector firms, including banks, building societies and other credit institutions; individuals and firms engaged in regulated investment activities under the Financial Services and Markets Act; issuers of electronic money; and companies dealing in long-term life insurance;
- currency exchanges, check encashment centers, and money transmission services (money service businesses);
- auditors, insolvency practitioners, external accountants and tax advisers;
- trust and company service providers;
- art market participants;
- cryptoasset exchange providers;
- custodian wallet providers;
- dealers in high-value goods (including auctioneers) who accept payment in cash of €10,000 or more (either single or linked transactions);
- estate agents and certain letting agents; and
- independent legal professionals, when undertaking relevant business, as defined in Regulation 12.1
Firms in the above categories of business are not in the regulated sector if they engage in financial activity on an occasional or very limited basis. To qualify for this exemption, the firm must satisfy all of the following conditions:
- the firm’s total annual turnover (i.e., revenue) in respect of financial activity does not exceed £100,000;
- financial activity is limited in relation to any customer to no more than one transaction exceeding €1,000, whether the transaction is carried out in one or a series of transactions that appear to be linked;
- financial activity does not exceed 5% of the firm’s total annual turnover;
- financial activity is ancillary and directly related to the firm’s main activity;
- financial activity is not the transmission or remittance of money (or any representation of monetary value) by any means;
- the firm’s main activity is not one of the categories of regulated business; and
- financial activity is provided only to customers of the main activity of the firm and is not offered to the public.
1 See The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (2017 Regulations), SI 2017/692, art. 8, ¶ 2 (UK).