MLRO​

As mentioned in our article "5 Essential Points for Hiring a MLRO", the Money Laundering Reporting Officer (MRLO) was always an important role, but has gained even more significance recently. The number and size of fines for anti-money laundering (AML) and financial crime compliance (FCC) breaches is increasing, and money launderers and criminals are exploiting the coronavirus pandemic to ramp up attacks on firms.

The MLRO is a senior figure who will represent your firm. This requires the FCA's 'fit and proper person' approval: CF11 under the outgoing regime, SMF17 under SMCR. This means that a good MLRO must behave in a way that is appropriate to their position.

Purpose of the role

The main focus of the MLRO role usually is to establish and effective compliance culture within a firm for fighting against money laundering, terrorist financial, and other forms of financial crime. Because of the role's high importance, a MLRO must build strong relationships with key stakeholders, senior management and a company's board to ensure they are fully aware of all anti-money laundering matters.

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Key Requirements

• The MLRO's knowledge must include the technical side of reporting and record-keeping requirements like Financial Conduct Authority (FCA) suspicious transaction and order reports (STORs) and National Crime Agency suspicious activity reports (SARs).

• A new MLRO needs sufficient experience to overhaul protocols and procedures to reduce the risk of breaches and avoid fines.

• They must also know how to manage a team. That includes knowing how to delegate and how to develop talented subordinates.

• Money launderers are always seeking new channels to exploit. An MLRO must not just know launderers’ latest methods, but have a keen sense of what might be a new ruse. That said, they must be pragmatic and keep a sense of proportion. They should not immediately ‘red flag’ every little thing.

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Usual Responsibilities

• Comply at all times with the Statements and Code of Practice for Approved Persons

• Implement Anti-Money Laundering and counter-terrorist financing policies aligned with evolving regulatory obligations

• Oversee all aspects of Financial Crime related regulation, policies, procedures and controls

• Daily management of all financial crime prevention efforts. This implies providing updates, escalating issues and highlighting areas of interest to key stakeholders

• Establish and maintain appropriate risk-based monitoring processes

• Oversight of AML/KYC and CDD policies and procedures . Review client files to assess whether they are in line with regulatory requirements

• Provide support, guidance and training for team members to enhance their knowledge financial crime related matters

• Manage and mentor AML teams

• Keep up to date with statutory and regulatory developments in AML.

• Take charge of anti-money laundering training to ensure everyone in the firm receives appropriate training which meets regulatory requirements