In a recent communication from the Financial Conduct Authority (FCA), firms are reminded of the importance of understanding their obligations regarding the completion of FIN074 returns and the Economic Crime Levy.
The FIN074 return is a RegData Report introduced by the FCA in April 2023. It helps identify firms liable to pay the Economic Crime Levy. This return requires firms to report their revenue for a given financial year.
Learn more about the FCA’s role in collecting the Economic Crime Levy here
Who needs to complete the FIN074 return?
Firms supervised by the FCA under the money laundering regulations (MLRs) will receive a FIN074 return. However, not all firms receiving the FIN074 return will be required to pay the Economic Crime Levy. Only those reporting revenue above the minimum threshold will be liable.
Under the MLRs, various types of firms may fall under supervision. Here’s a breakdown for different firm types:
Credit institutions and financial institutions:
- Firms carrying out listed activities from Schedule 2 of the MLRs are classified as financial institutions, unless exempted under regulation 10(3).
- If your firm has received a FIN074 return, it’s likely considered a credit institution or financial institution. Exemptions outlined in regulation 10(3) may apply.
Consumer credit firms:
- Consumer credit firms with permissions for regulated activities may be subject to MLR supervision, depending on their activities.
- Certain exemptions exist based on the type of regulated credit agreements entered into. If unsure, contact the FCA well before the FIN074 due date.
Firms offering consumer hire agreements:
- MLR scope depends on the type of agreements provided and their classification under MLRs. Detailed guidance is available in the JMLSG Guidance.
Insurance firms:
- General insurance contracts are typically not within MLR scope, while long-term insurance may be.
- Additional permissions may subject insurance firms to MLRs, with exemptions available based on activities and permissions.
Pure debt purchasers:
- Firms operating solely in the debt purchase sector are generally exempt from MLR requirements.
- However, if engaged in other MLR-regulated activities, MLR registration may still be necessary.
How to proceed
If you believe your firm is exempt or has grounds to challenge its inclusion under the MLRs, contact the FCA promptly. Providing a detailed assessment well before the FIN074 due date is recommended.
If you think your firm is exempt, contact the FCA here for further assistance.
At Neopay, we understand the importance of regulatory compliance and are here to support you through these processes. For further guidance or assistance, feel free to reach out to our team here.
