A senior City figure and Labour peer has added her voice to concerns about upcoming changes to anti-money laundering regulation. Baroness Bi (solicitor Farmida Bi), chair of Norton Rose Fulbright for Europe, Middle East and Asia Pacific, said she had doubts about the Financial Conduct Authority’s capacity to regulate lawyers.
The FCA will take over AML supervision from the Solicitors Regulation Authority under the Financial Services and Markets Bill, now going through parliament. The FCA will replace more than 20 professional supervisory bodies to become the sole supervisor.
Addressing a Lords debate this month, Lady Bi questioned whether the financial services regulator had the necessary expertise to deal with the legal profession. ‘The outcome will be that we will simply have another regulator to answer to, in addition to the 15 we currently have, and one that has no experience of supervising professional services firms, let alone law firms,’ she said.
‘I can assure your lordships that solicitors are not currently an under-regulated profession, and it is not a lack of regulation that contributes to financial crime. I suggest that where crimes are being committed, the law is enforced, and where schemes exist that are not currently illegal, they are made so.’
The government has earmarked around £5.4m over two years to cover the preparatory work for the expansion of the FCA’s responsibilities. Bi said this money would be better spent on the legal advice sector.
The government said last week it would ensure that any new powers handed to the FCA are proportionate and do not create an extra burden for law firms.
Treasury minister Rachel Blake said the government’s approach has been ‘to build on existing powers where they are sufficient, to introduce targeted improvements where necessary, while aiming to ensure that any new powers are proportionate and do not create extra burdens on firms’.
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