Changes to the UK anti-money laundering supervisory regime

What’s changing

The UK government announced in October 2025 that the Financial Conduct Authority (FCA) will be the single professional services supervisor.

This forms part of the government’s reform of the anti-money laundering (AML) and counter-terrorism financing (CTF) supervision regime.

The role of the Solicitors Regulation Authority (SRA) will be significantly reduced.

The changes follow HM Treasury’s 2023 consultation into reforming AML and CTF supervision.

Our view

The AML regime is highly complex.

We are concerned that the UK government has chosen to create a single professional services supervisor, which comes with many challenges.

• Supervision must be sector-specific: FCA oversight must be tailored to the realities of legal practice, reflecting solicitors’ ethical duties, professional training and legal professional privilege. A one-size-fits-all model is inappropriate
• Proportionality and cost: the reforms risk imposing significant administrative burdens and higher costs without evidence of improved AML outcomes, with knock-on effects for consumer choice and legal fees
• Preserving practitioner-led guidance: AML guidance must remain practitioner-led to reflect the profession’s unique regulatory and ethical obligations. FCA-authored guidance would dilute essential sector expertise
• Regulatory overlap and accountability: expanded FCA powers could duplicate existing regulation, create double jeopardy and undermine access to justice. Strong safeguards are needed for privilege, confidentiality, transparency and appeal rights
• Unproven case for expansion: with minimal evidence of money laundering in the profession, the proposals risk adding cost and complexity without delivering meaningful AML benefits, while damaging the UK’s competitiveness
• Protection of the SARs regime: granting supervisors direct access to SARs for supervisory purposes risks compromising confidentiality, undermining the Proceeds of Crime Act framework, and increasing security and misuse risks. The integrity and safety of the SARs system must not be weakened

Read our full response to the consultation.

Timeline

June 2023 – HM Treasury consulted on four potential models for reform of the UK’s AML and CTF supervisory regime.

October 2023 – we supported consolidating professional body supervisors but warned of the risk that legal sector-specific expertise could be lost in our consultation response (PDF 225 KB).

October 2025 – HM Treasury announced its reforms to the supervision regime.

November 2025 – HM Treasury held a consultation on the key duties, powers and accountabilities the FCA will need to effectively supervise professional services businesses.

December 2025 – we responded to the consultation, which closed on 24 December. HM Treasury also published its AML and CTF supervision report 2024-25, an audit of the old regime with detailed, sector-wide metrics, which the effectiveness of the new, consolidated regime can be measured against

The role of the Law Society

As a named regulator, the Law Society holds statutory obligations under Schedule 1 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs).

Although regulatory and enforcement powers have been delegated to the SRA, the Law Society retains an essential non-regulatory supervisory role, which includes:

• providing information, guidance and education on AML and economic crime compliance
• supporting best practice within the legal profession
• contributing to policy development, sector engagement and strategic reform

What this means for solicitors and firms

The FCA will supervise firms that carry out activities within scope of the MLRs as:

• legal service providers
• accountancy service providers
• trust and company service providers

The reform is still subject to “the passage of enabling legislation, confirmation of funding arrangements, and development of a detailed transition and delivery plan”.

This means the date the FCA will start supervising the professional services sector will be “heavily dependent on the availability of parliamentary time.”

Success under the new supervisory model will depend on firms’ ability to:

• maintain real-time understanding of client and matter risks
• integrate dynamic monitoring tools, rather than relying on annual reviews
• evidence effective governance, oversight and escalation pathways
• ensure SAR quality, particularly the articulation of suspicion
• keep pace with supervisory expectations for digital identity, online onboarding and AI-related risks

Next steps

“It is vital that representative bodies continue to play a central role in shaping and contributing to legal sector-wide guidance,” said Law Society president Mark Evans.

“Whilst we see significant challenges and would not have chosen this route, we stand ready to work with the government and the FCA as it implements the SPSS model.”

We will work to make sure:

• our members are not adversely affected by the changes to the AML supervisory regime
• there is an informed understanding of the sector and level of risks