FCA restricts six unregulated lenders over anti-money laundering concerns
The FCA has placed restrictions on six Annex 1 lenders after raising concerns about their anti-money laundering controls while assessing their applications.
The UK Financial Conduct Authority (FCA) said on 23 October 2026 that it has placed restrictions on 6 unregulated lenders, known as Annex 1 firms. According to the FCA, it raised concerns about the firms' anti-money laundering policies, controls and procedures while assessing their applications. The FCA says the restrictions were imposed on each firm's request and limit their ability to take on new customers or do new business with existing customers.
Annex 1 firms work in sectors with a higher risk of money laundering. They must register with the FCA for supervision under the Money Laundering Regulations, but they are not authorised or subject to wider FCA regulation.
The firms named are Kingscrown Finance Ltd, MOMSB Ltd, Momentus Capital Ltd, Grosvenor Funding Ltd, Grosvenor Funding (North West) Ltd and Abbital Ltd. The FCA says further restrictions on Kingscrown limit how it may receive payments from existing customers and require an orderly wind-down of its existing loan book. The restrictions on MOMSB, Momentus and the two Grosvenor firms require an independent review of their anti-money laundering framework, and Abbital's require an independent review of its anti-money laundering systems and controls.
The FCA says it is assessing responses to an information request sent to around 900 registered Annex 1 firms. It also reminded regulated firms that registration under the Money Laundering Regulations is not a substitute for their own due diligence when dealing with Annex 1 firms.
Why it matters to AML professionals
Banks and payment firms often treat a counterparty's registration with a supervisor as proof that it is low risk. This case is a reminder that registration does not replace an institution's own due diligence on a lender or other non-bank client. AML professionals who onboard or monitor non-bank lenders should expect closer questions from supervisors about how those relationships are risk-assessed.
Red flags in this case
- A non-bank lender client that cannot explain how it checks where loan repayments come from
- Loan repayments arriving from third parties with no clear link to the borrower
- A lender client whose registration status or permitted activities do not match what it does in practice
- Rapid growth in a lender client's loan book with no matching growth in its compliance resources
If this landed in your queue
- Confirm the client's registration status directly on the supervisor's register, not from documents the client supplies
- Ask the lender client for its own AML policies, risk assessment and evidence of how it checks borrowers and repayments
- Review repayment flows for third-party payers and unexplained early settlements
- Record your risk assessment of the relationship and escalate if the client is subject to regulatory restrictions
Key terms
- Annex 1 firm
- A UK business carrying out certain financial activities, such as lending, that must register with the FCA for anti-money laundering supervision but is not otherwise authorised by it.
- Voluntary restriction
- A limit on a firm's business that the regulator imposes at the firm's own request, often to address the regulator's concerns.
- Money Laundering Regulations
- The UK rules that set customer due diligence, record keeping and reporting duties for businesses at risk of money laundering.
Interview angle
A client says it is registered with the FCA for AML supervision. Is that enough to treat it as low risk?
Say no: verify the registration independently, assess the client's own controls and activity, and record your risk assessment, because registration does not replace your own due diligence.
Sources
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