Can I ask a client about a register discrepancy without tipping off?

Is it ‘tipping off’ to discuss a discrepancy in the Persons of Significant Control (PSC) register with my client?

Under regulation 30A of the Money Laundering Regulations 2017 (MLRs 2017), practices have a responsibility to report discrepancies between information collected from the relevant register and information gathered while undertaking anti-money laundering requirements such as customer due diligence (CDD) or ongoing monitoring.

Although it is not a requirement to actively seek out such discrepancies, firms that discover discrepancies must report them to Companies House if they are a material discrepancy which can reasonably be considered to be linked to one or more of the following:

• money laundering
• terrorist financing
• concealing details of the business of the customer

Informing the client about the discrepancy and advice on how to rectify it is not ‘tipping off’.

If the client can amend the discrepancy without delay this would negate the need to notify the Companies House.

Any hesitation or resistance by the client would accelerate the need to report the discrepancy.

Check the Companies House guidance on material discrepancies

The responsibility to report does not apply where the information is subject to legal professional privilege.

For further information, see chapter 12.6 of the anti-money laundering guidance for the legal sector.