For Money Laundering Reporting Officers (MLROs), it’s that time of year again. The time to start drafting your annual MLRO report for the company’s senior management and Board.
Some MLROs might sigh when they think about this task, which is necessary to meet reporting obligations specified in the Financial Conduct Authority’s (FCA) handbook. But an annual MLRO report can–and should–be so much more than a tick-box exercise. In fact, I would argue it is among the most important documents a MLRO will draft all year.
Why? Because both MLROs and management can get a lot out of these reports. For MLROs, it is an opportunity to get across key messages and trends around AML management to the top of the company, to flag risks and opportunities, and give a clear call-to-action where necessary. For management, these reports show them the direction of travel for how the firm is dealing with AML risks so they can take urgent action if they need to.
But where should MLROs start when it comes to the report? In this blog, I will outline some of the key ingredients that should be included.
The main functions of an effective MLRO report
No two MLRO reports will be identical. They should reflect the size of your firm, the complexity and range of your products, how mature the firm is and what the compliance culture is. But the report should perform the following functions:
Next steps: following a template to MLRO success
As a former MLRO for eight years in a regulatory compliance function, I remember the time and effort involved in putting together these reports–and how important they are. The task is further complicated by the nature of MLRO and compliance roles–they can be lonely, and you often feel pulled in many directions. Without clear guidance on these reports, it is difficult to know where to start or even how long they should be.
In order to help MLROs start the process, we at fscom held a free webinar in mid-October called ‘How to maximise your annual MLRO report’. At this webinar, I shared a comprehensive template which can help to start the process of producing an MLRO report that makes a difference. I identified and explained thirteen points that officers should consider addressing in their report.
While there is no ‘one-size-fits-all’ to an annual report, this template will ensure crucial information is covered and that the report benefits MLROs, senior managers and the Board, and the firm’s management of risk as a whole.
To find out more, watch the recording of our webinar here.
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