ECSH51200 | Money service businesses providing services in other supervised sectors

It is not uncommon to see money service businesses (MSBs) offering other supervised services. Where a MSB business carries out functions or offers services in multiple supervised sectors, the business must obtain the appropriate, sometimes additional, permissions and/or supervision registration. An example being an MSB that carries out e-money functions or whose business model includes trust or company service provider (TCSP) activities.

A casino supervised by the Gambling Commission (GC) under the Gambling Act 2005 may also be supervised by the GC under The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) for MSB-related activities and must be registered with HMRC and/or potentially authorised by the Financial Conduct Authority (FCA), depending on the services they are offering.

Some MSBs provide community focussed services and serve a local community where there is more trust within a specific group, or a traditional lack of trust in mainstream services. An example being diaspora communities (a population that is scattered across regions which are separate from its geographic place of origin), especially in UK cities, where these businesses often only serve the local community and gain business by word of mouth or have a monopoly on the population they serve. Officers should consider that whilst these services may be essential to a local community, the money laundering risks increase where multiple supervised services are offered by the same business, for example money transmission and currency exchange. The business should have appropriate risk assessments (RAs) and policies, controls and procedures (PCPs) in place to mitigate these increased risks.

In all cases the business’s anti-money laundering registration must reflect all relevant activity it conducts, as must its compliance with MLR 2017.

Further information on supervision can be found at ECSH51225.