AML supervision FAQs

The OFT has been given a role under the Regulations to supervise the anti-money laundering controls of estate agents and consumer credit financial institutions (CCFIs).

Estate agents are those businesses engaged in estate agency work as defined by section 1 of the Estate Agents Act 1979 (this includes property finders and property auctioneers).

Consumer credit financial institutions (CCFIs) are those businesses engaged in consumer credit lending which are not either authorised by the Financial Services Authority (FSA) or supervised by HM Revenue and Customs (HMRC) as a money service business.

Businesses supervised by the OFT need to be registered with the OFT under the Money Laundering Regulations 2007.

Other businesses to which the Regulations apply may be supervised by the FSA, HMRC or certain professional bodies that are listed in Schedule 3.

The OFT has sought in these FAQs to address the main questions which may arise as businesses consider whether they need to comply with the Regulations and if so, whether they are supervised by (and therefore need to register with) the OFT. The answers to these FAQs represents the views of the OFT as a Supervisory Authority under the Regulations.

If these FAQs do not answer your question, a more detailed set of FAQs is available to download on the right of this page. Alternatively, you can email your query to us at amld3@oft.gsi.gov.uk or telephone the AML team to discuss your query on 020 7211 8200

Who is my supervisor?

General

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Q1. I trade in the UK but my company is registered abroad - am I supervised by the OFT?

Yes. If you are either an estate agent or CCFI and you are acting in the course of your business within the UK then the Regulations will apply to that business and you will be supervised by the OFT.

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Q2. What responsibility does a franchise company have towards ensuring compliance by the franchisees?

As separate legal entities the franchisees are responsible for their own compliance with the Regulations.

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Q3. I have several entities operating out of the same premises - which of them should be registered?

Each separate entity engaging in activities as an estate agent or CCFI (or both) in the course of their business will be required to register for supervision by the OFT.

Estate Agency

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Q4. I only carry out commercial estate agency work- am I supervised by the OFT?

Yes. For the purposes of the Regulations there is no distinction between residential and commercial estate agency work.

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Q5. I am a member of the Property Ombudsman scheme and/or the Royal Institution of Chartered Surveyors (RICS)/Surveyors Ombudsman Scheme - will I still be supervised by the OFT?

Yes. The Ombudsman schemes are separate from the need to be supervised under the Regulations and the need to register with the OFT for AML purposes.

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Q6. I am a lettings/property management agent - am I supervised by the OFT?

No. If you are a lettings or property management agent and do not carry out any estate agency work within the meaning of section 1 of the Estate Agents Act 1979 then you are not supervised by the OFT.

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Q7. I am a Housing Association am I supervised by the OFT?

If you carry out estate agency work or are a CCFI in respect of, for instance, granting second charge shared equity mortgages then you will be supervised by the OFT.

You may be engaging in estate agency if you act on behalf of another Housing Association in respect of the sale of a property or if you act on behalf of the home occupier with whom you co-own a property in respect of the sale of their interest.

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Q8. I am a re-location agent am I supervised by the OFT?

If you act as an agent for a buyer and carry out estate agency work within the meaning of section 1 of the Estate Agents Act 1979, you are covered by the Regulations and will be supervised by the OFT.

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Q9. I am a solicitor practicing in England and I carry out estate agency work - am I supervised by the OFT?

If you are a solicitor engaged in estate agency as part of your work as a solicitor then the OFT is not your supervisory authority. If, however, you engage in estate agency work outside your practice as a solicitor then that business will be supervised by the OFT. For further advice see 'Do you need to register for OFT supervision?' on the the Law Society's website.

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Q10. How do the Regulations affect Scottish estate agents?

In Scotland, if you are a Solicitors' Property Centre or a free standing estate agent you come under the Estate Agents Act and are therefore subject to the Regulations (and will be supervised by the OFT).

If you are a solicitors' practice which carries out estate agency work as part of that practice but not as a separate business you will be supervised by the Law Society of Scotland.

The Regulations apply to any business operating in the UK (irrespective of whether it is a limited company, sole trader or partnership) that carries on estate agency work as defined by Section 1 of the Estate Agents Act 1979. This will include estate agents in Scotland unless they are solicitors regulated by the Law Society of Scotland and the estate agency work is carried out in the course of their practice as a solicitor.

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Q11. I am an estate agent and all my customers have bank accounts and their transactions are handled by solicitors - why should I be covered by the Regulations?

This is not a decision made by the OFT. It stems from a European Directive implemented in the UK through Treasury. This reflects the fact that estate agents are involved in large value property transactions. It is not just about handling cash.

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Q12. Do I have to carry out customer due diligence measures on the executor of a will under which a property is being sold?

An executor of the estate of a deceased person is the beneficial owner for the purposes of the Regulations, and therefore falls within the customer due diligence obligations even where the executor is a solicitor. It makes no difference that a solicitor is subject to AML supervision by a professional body such as the SRA. When they are acting as executor, it is perfectly reasonable that their identity should be subject to checks by the estate agent to ensure they are who they say they are in order to avoid the risks of money laundering.

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Q13. My business provides financial services as well as estate agency. The FSA is the AML supervisor for the financial services part. Does the estate agency side of my business also need to register?

Authorised estate agency business' compliance with the Regulations is currently supervised by both the FSA and OFT. Estate agency businesses that are appointed representatives of FSA authorised firms are only supervised by the OFT under the Regulations and must register with the OFT.

Consumer Credit Financial Institutions (CCFIs)

CCFIs are businesses that provide consumer credit. This includes lending money and providing for payment for goods or services by instalments (except where the credit is repayable within 12 months by no more than four instalments) It also includes being a creditor under regulated consumer creditor agreements. The Regulations do not cover credit brokerage, that is, the introduction of a consumer to a third party who provides credit.

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Q14. I hold a category A licence - am I supervised by the OFT?

If your business provides consumer credit you will be supervised by the OFT - providing you are not authorised by the FSA or supervised by HMRC as a money service business.

If your business is engaged in credit brokerage (where your business does not offer the consumer credit itself but 'introduces' the consumer to a third party financial institution that does) then you will not be required to register with the OFT for anti-money laundering supervision purposes.

In providing consumer credit the business should hold a consumer credit licence for category A. However, the OFT will supervise those businesses that require a category A licence whether they hold a current licence or not. The requirement to hold a consumer credit licence is separate to the obligation to be registered for AML supervision purposes.

If you are engaged in providing consumer credit but do not hold a current consumer credit licence you should contact the licensing team immediately on 08457 224499, or apply online.

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Q15. What if I hold a category A licence but I'm not in the business of lending?

If you hold a category A licence but do not provide consumer credit then you will not be required to register with the OFT.

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Q16. I am a consumer credit lender whose parent company is supervised by the FSA as it is an authorised firm - am I also supervised by them?

Not necessarily. As separate legal entities it will depend on whether both companies are authorised by the FSA, and if so, then both will be supervised by them. If it is only the parent company that is authorised by the FSA, and your company (even if it is an appointed representative) is not, then the OFT will be your supervisor for anti-money laundering purposes.

If you are an appointed representative of an FSA authorised firm and you do not provide consumer credit (apart from acting as a broker and introducing consumers to third party companies to obtain credit from), then you will not be supervised by the OFT. However if you do provide consumer credit then you will be required to register with the OFT.

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Q17. I am a pawnbroker - am I supervised by the OFT? 

If you carry out pawn broking and/or payday lending then you will be providing consumer credit and therefore supervised by the OFT. However, if you also:

• carry out third party cheque cashing
• carry out money transmission or
• act in any other way as a money service business

then you will be supervised by HMRC and not the OFT.

For more information see HMRC's website

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Q18. I am a payday lender - am I supervised by the OFT?

Some payday lenders will be supervised by the OFT (see Q15 above) but the majority will be supervised by HMRC because you are likely to be carrying out third party cheque cashing, money transmission or act in other ways as a money service business. For more information see HMRC's website at www.hmrc.gov.uk/mlr.

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Q19. I am a debt collector - am I supervised by the OFT?

Yes, but only if you are a debt purchaser. If you purchase books of debts under regulated consumer credit agreements, then you will require a category A consumer credit licence as you will be carrying on supervised activity, and so the OFT will be your supervisor.

If you are collecting only your own debts or collecting debts on behalf of a third party then you are not covered by the Regulations and so not supervised by any of the supervisory authorities.

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Q20. I am an asset leasing company with a category A consumer credit licence and I am authorised by the FSA but only for insurance purposes - am I supervised by the OFT?

No. You will be supervised by the FSA as you are an authorised firm.

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