Miscellaneous Politically exposed persons: review of guidance
As noted above, the FCA guidance on the treatment of PEPs is an important tool for regulated firms when ensuring they take appropriate and proportionate measures to meet their obligations under the MLRs. Poor adherence to the guidance by firms, particularly by banks and other financial institutions, could result in the seemingly disproportionate treatment reported by some PEPs if firms apply their fullest extent of enhanced due diligence.
	Section 78 requires the FCA to conduct a review of the adherence of regulated firms to its guidance, to identify if there is a systemic issue which is causing unnecessary burdens of domestic PEPs and their family members and known close associates. The review must be completed within twelve months of Royal Assent, and the FCA will be required to consider if the findings of the review necessitate updating its guidance. If the FCA does conclude the guidance requires updating, it must also publish draft guidance alongside the publication of the review’s findings.
	Along with the amendments to the MLRs, the review is intended to help address the problems currently experienced by some domestic PEPs.
	The FCA is required to publish an update on its plan for the review within three months of Royal Assent.