The UK government has decided that the Financial Conduct Authority will become the anti-money laundering and counter-terrorism financing supervisor for legal, accountancy and trust and company service providers, replacing the current patchwork of professional body supervisors, the Solicitors Regulation Authority and HMRC. What is far less settled is exactly when and how that transition happens. This article sets out what HM Treasury has confirmed, what remains open, and what legal and accountancy firms should do while the detail is still being worked out.
What has actually been decided
HM Treasury issued its response to its consultation on the FCA's duties, powers and accountability as AML/CTF supervisor on 21 July 2026, following an earlier November 2025 consultation. The government confirmed the FCA will take on supervision of all firms currently supervised by professional bodies and by HMRC for AML/CTF purposes across legal, accountancy and trust and company service provision, replacing what officials have described as a fragmented, uncoordinated supervisory system. City minister Lucy Rigby framed the change as aligning professional services supervision with the FCA's existing financial-sector oversight.
Treasury's response also confirmed that existing information-gathering, inspection and information-sharing powers under the Money Laundering Regulations will extend to the FCA's new remit, that the FCA will be able to use its existing enforcement powers in relation to professional services firms, and that supervisory activities will be funded on a cost-recovery basis through fees charged to supervised firms, with further consultation on fees still to come.
What is still genuinely open
As of Treasury's July 2026 response, the transition depends on primary legislation that had not been scheduled. Estimates suggest the FCA is expecting to add roughly 60,000 newly supervised businesses to the 40,000 it already regulates, a scale increase Treasury's own 2026/27 FCA budget does not yet appear to fully anticipate. The Institute of Chartered Accountants in England and Wales noted in April 2026 that there was, at that point, 'no confirmed model for how the FCA will supervise the accountancy sector' and no detailed implementation plan published.
The practical expectation, based on the current framework remaining in place through 2026 and likely most of 2027, is a phased transition of firms to the FCA over time rather than a single cutover date. Firms should treat any specific supervisory timeline they encounter as provisional until primary legislation is actually introduced.
What does not change in the meantime
HM Treasury has been explicit that this reform does not change firms' substantive obligations under the Money Laundering Regulations. Firms that are already compliant should not need to change their AML/CTF controls simply because their supervisor is set to change; the reform is about who checks compliance and how, not what compliance requires. This is a useful message to give internally, since staff can otherwise read 'the FCA is taking over' as signalling wholesale new rules, when the near-term reality is closer to a governance and funding change happening around the same underlying legal requirements.
The OPBAS (Office for Professional Body Anti-Money Laundering Supervision) framework has also continued to operate and report during this transition period; its March 2026 findings noted improved AML supervision in the legal and accountancy sectors since 2018, alongside continued underperformance by some professional body supervisors, particularly in enforcement activity, which is part of the case for a single supervisor in the first place.
How firms should prepare while the timeline is still open
Firms do not need a finalised FCA supervisory model to start building the kind of transaction monitoring, customer due diligence and evidence trail an FCA-style supervisor, which already expects more systematic, data-driven oversight of its financial-sector population, is likely to expect. That means moving away from monitoring and file-review practices that rely heavily on individual partner judgement without a documented, consistent methodology behind it, and building the kind of audit trail that supports scaled, risk-based supervision rather than periodic, relationship-based checks.
Firms should also stay engaged with their current professional body supervisor's guidance in the near term, since the existing framework remains authoritative until legislation actually transfers supervisory responsibility, while treating detailed preparation for FCA-style oversight as a sensible medium-term investment rather than an immediate compliance deadline.
