The useful question is what changes for users, developers or buyers, and whether the announcement stays industry context or becomes something people can actually use.

The Financial Conduct Authority (FCA) has expressed concerns about risks posed by Annex 1 firms, which include unregulated lenders, safe custody providers, money brokers, and financial leasing companies. These firms must register with the FCA for anti-money laundering purposes. The regulator warns that firms operating without registration should apply immediately, as the FCA has identified vulnerabilities that could facilitate financial crime, particularly where firms rely on parent company controls rather than tailored risk assessments.

The FCA highlights that Annex 1 firms cannot depend on generic or off-the-shelf financial crime procedures designed for other businesses. Each firm must implement controls specific to its operations and risk profile. The regulator also warns of risks to consumers and markets from unregulated lending, often conducted through complex structures such as special purpose vehicles, and has previously alerted regulated firms to exercise caution when dealing with these entities.

To mitigate these risks, the FCA is intensifying its scrutiny of registration applications from Annex 1 firms. Applicants must demonstrate robust compliance with money laundering regulations, and the FCA expects the registration process to take longer than usual. The regulator has also issued an information request to approximately 900 Annex 1 firms to better understand their activities, business models, and associated risks.

This initiative follows a previous review of 300 Annex 1 firms conducted in late 2025, ensuring all registered firms have now been contacted. The FCA will use the gathered information, alongside other intelligence, to identify and disrupt financial crime risks within this sector, reinforcing its oversight of these high-risk financial activities.