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  • Writer's pictureDeborah

The Financial Conduct Authority (FCA) provided a non-exhaustive list of steps that companies should take in order to prepare their application for registration.

Before preparing the application

  • Establish if they will be carrying out in-scope cryptoasset activity

  • Consider seeking independent legal/compliance advice as part of preparing an application

  • Review the relevant information on the FCA’ webpages as well as the registration form

  • Appoint a Money Laundering Reporting Officer (MLRO)/ Nominated Officer with relevant knowledge, experience and training as well as a level of authority, independence and sufficient access to resources and information. The FCA will assess the fitness and propriety of the MLRO/Nominated Officer.

When preparing the application

  • Include all required information in the business plan, this includes but is not limited to : details of the business model, roles and responsibilities of business partners (such as service providers, brokers, introducers, sub-custodians and outsourcing partners), sources of liquidity, detailed customer journey…

  • Comprehensive and accurate description of products and services (e.g. a cryptoasset token vetting policy, detailed description of how dependent it is on external ecosystems for liquidity, custodian services and underlying smart contracts/DeFi implementations.) .

  • Demonstrate a thorough understanding of the risks from dealing in cryptoassets and design a business wide risk assessment (BWRA) that is tailored to their business model.

  • Implement policies, systems and controls to appropriately manage and mitigate the risks identified in the BWRA

  • Have in place an effective framework for transaction monitoring and blockchain analysis

  • Provide complete information regarding its outsourcing arrangements within and outside the group, as well as within and outside the UK

  • Provide evidence staff training material tailored to its particular business model and associated AML/CTF risks along with its annual training plan

  • Ensure that the Suspicious Activity Reporting policy fully covers the company cryptoasset-related activities

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