Changes to the UK anti-money laundering supervisory regime

The Financial Conduct Authority will become the single professional services supervisor for anti-money laundering and counter-terrorism financing (AML/CTF) supervision, significantly reducing the role of the Solicitors Regulation Authority.

21 Oct 2025

2 minutes read

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.

Current 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

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.

Given the extensive changes required, the government must:

carefully manage the costs implications of implementing a single supervisor model, and
avoid increasing regulatory burdens that could undermine the competitiveness of our world-beating legal services sector

In its new role, the FCA should have a greater focus on proportionate risk-based regulation, rather than blind compliance.

There must also be a careful transition between the SRA and the FCA, so that cost and complexity risks are mitigated for our members and their clients.

In our response to HM Treasury’s 2023 consultation, we supported consolidation of professional body supervisors to create either:

one accountancy sector supervisor and one legal sector supervisor, with UK-wide jurisdiction, or
one accountancy sector supervisor and one legal sector supervisor for each jurisdiction (England and Wales, Scotland, Northern Ireland)

Timeline

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

October 2023 – in our consultation response, we supported consolidating professional body supervisors but warned of the risk that legal sector-specific expertise could be lost

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

November 2025 – HM Treasury will hold a consultation on the powers the supervisor should have

What this means for solicitors

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.”

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