Starting a business is one of the hardest, costliest, and most stressful things to do, particularly in the financial sector. It takes time, planning, effort and significant financial resources; indeed, it can easily take up to six months for a business to become authorized by the FCA and supervised by HMRC, all the while causing both stress and additional cost to the founders.
Once the business is authorized, the hard work really starts. Moving into an office, installing the correct systems, taking on employees, adding trusted third-party suppliers and, finally, bringing in those all-important clients; all with the goal of creating an entity with longevity, integrity, and financial soundness…
But all of that is at serious risk of being lost if the right advice and infrastructure are not implemented from the start. For example, under the Money Laundering Regulations 2017, as amended, HMRC has far-reaching, draconian powers that can be deployed if they consider any business they supervise is not compliant. They can investigate that business at any time and, if they consider there to be an unacceptable and/or poorly managed risk of the business being used for money laundering and/or terrorist financing, HMRC can:
- Impose a penalty
- Suspend the business’s licence; or
- Cancel the licence altogether.
- It can also cancel the fit and proper status of the director(s) and the MLRO.
Moreover, should they consider there to be criminal wrongdoing, then other authorities may be involved as well, including the police.
It is possible to reverse the above decisions but it is a long, tough process; all the while, the business is at risk of not only being exposed to a significant penalty but being unable to trade in the meantime. The potential financial loss is significant.
Get Regulated, in assisting at both the set-up stage and on an ongoing basis, can help prevent this from happening by ensuring the correct infrastructure and compliance framework are in place from day one, giving the business the peace of mind to grow and achieve its goals.