The FSA says it is aiming for consultations this autumn with the financial services industry, includ...
The FSA says it is aiming for consultations this autumn with the financial services industry, including IFAs, on imposing stricter money-laundering checks that could result in higher business costs.
The admission comes as the regulator welcomes today's announcement by six of the UK's biggest banks that they will "voluntarily" impose stricter money-laundering checks on existing customers.
A spokesman for the FSA says that the regulator does not know what the new proposal will cost the banks, or whether those costs will be passed on to customers in the form of higher fees.
But cost it will, although there is no choice for the industry, the spokesman says, because of events in the world since 11 September last year.
"The autumn consultations will be based on a common sense risk-based approach to the need for firms to know who their customer are," the spokesman says, adding "there will be some flexibility built in."
The FSA says it will implement a cost-benefit analysis before the consultations go ahead in order to ensure that its proposals do not excessively burden IFA firms.
For example, it may be the case that where an IFA has advised only a single customer about life assurance back in 1985, the FSA may find it prohibitively expensive to require that IFA to perform an identity check, the spokesman says.
In relation to today's announcement from the banks, most customers will notice no difference.
However, those who have had bank accounts for a long time, since before more recent regulations demanding better identification when opening an account, may be asked to come into a branch with further identification documents "such as a drivers licence or passport".
The FSA also admits that customers to the government's planned "universal bank" may be exempt from most of the new anti-laundering proposals because of existing practicalities.
The FSA recognises that those people the government wants to target in this case often have no drivers licence, no passport, and may not even have a permanent address or be on the electoral register.
In such cases it has already been proposed that a person of "authority", such as a vicar, should be able to write a letter testifying that they know the person applying for a bank account.
Clarke replacing Balkham
'Deep-dive analysis of client behaviour'
Ways to mitigate April’s increases
The best equity income funds examined