FCA's first AML enforcement against professional body supervisor: Key compliance lessons for firms

The Financial Conduct Authority (FCA) has issued its first enforcement outcome against a professional body supervisor, announcing on 2 December 2025 that it had censured the Institute of Certified Bookkeepers (ICB) for serious deficiencies in its anti-money laundering (AML) supervision.

Summary of findings and issues

Between January 2022 and July 2023, ICB breached key AML regulations relating to its role as an AML supervisor, thereby increasing the risks of financial crime amongst members. ICB is a professional body supervisor responsible for overseeing the AML compliance of over 3,000 bookkeepers under the Money Laundering Regulations 2017.

The FCA identified multiple serious breaches. ICB did not effectively monitor its members, and did not adopt an adequate risk-based approach to the exercise of its supervisory functions. The most serious breaches were caused or made worse by ICB's decision to suspend all inspections – both onsite and virtual – for nine months.

ICB's compliance team had limited confidence in the accuracy of the risk assessments and risk profiles produced during this period, meaning ICB could not use them as a reliable basis to target its key supervisory activities. The decision to suspend inspections was made on 17 October 2022 without any plan to mitigate the impact on ICB's ability to adequately supervise its members, and the suspension period lasted until 26 July 2023. ICB also maintained poor records of its supervisory activities and key supervisory decisions, with no written record setting out a reasoned explanation for the suspension.

Significance regarding the FCA's supervisory role

The FCA's first enforcement outcome against a professional body supervisor demonstrates the FCA’s willingness to take action where there is inadequate oversight of member organisations. 

ICB is one of 25 professional body supervisors in the legal and accountancy sectors that are supervised by the Office for Professional Body Anti-Money Laundering Supervision (OPBAS). The government has recently announced planned reforms to make the FCA the Single Professional Services Supervisor, aiming to deliver a more effective approach to combatting illicit finance. 

This case signals the FCA's commitment to rigorous enforcement in the AML supervision space ahead of these reforms.

Lessons and implications for financial services firms

Whilst this enforcement action relates to a professional body supervisor, it offers critical lessons for all regulated firms. 

First, risk-based approaches to AML compliance must be genuinely data-driven and properly understood by compliance teams. ICB's staff had limited confidence in their risk assessment software, with large numbers of members either not using it or failing to keep it updated. Firms must ensure their risk methodologies are transparent, well-documented, and fully understood by those implementing them.

Second, compliance activities cannot be suspended without robust justification and contingency measures. ICB suspended inspections for nine months without adequate planning or documentation, despite repeated concerns raised by compliance staff. Any pause in critical compliance functions must be properly justified, time-limited, and subject to senior management oversight.

Third, comprehensive record-keeping is essential. ICB failed to document the rationale for suspending inspections. Firms must maintain thorough records of significant compliance decisions to demonstrate regulatory compliance.

Fourth, technology governance matters. Key ICB staff could not locate documentation of the algorithm used for risk ratings, as it had been developed by former employees. Firms must maintain proper documentation of compliance systems and ensure knowledge transfer when staff depart.

Conclusion

This case underscores the FCA's heightened focus on AML supervision standards and its propensity for investigating financial crime issues. In the FCA’s press-release, Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said:

Firms should review their AML frameworks to ensure effective risk-based approaches, regular risk profile reviews, thorough documentation, and proper understanding of compliance systems and methodologies.

For guidance on strengthening your AML compliance framework or to discuss how these regulatory developments may affect your organisation, get in touch with our team.