(House of Lords, Report stage, 7 September 2026)

What was actually said…and when will the FCA start law firm supervision?

The comments came in response to amendments tabled by Liberal Democrat Treasury spokeswoman Baroness Kramer, who pressed the government on the lack of a published implementation timetable. Peers reported that professional bodies across legal, accountancy and trust and company services had raised real frustration about planning for a reform with no fixed dates attached.

Lord Pitt-Watson’s response set out a phased approach rather than a single switchover date:

• Before the end of 2028 – the first cohort of firms begins FCA supervision
• Through to mid-2030 – further onboarding takes place in phases, firm by firm or sector by sector
• Until each firm’s transition – existing supervisors, including the SRA, continue to supervise and take enforcement action as normal

Crucially, the minister was clear that implementation “should proceed only when the necessary preparations are complete” – meaning systems, information-sharing arrangements between the FCA, HMRC and existing supervisors, and staff training all need to be in place before onboarding begins. That’s a meaningful caveat, and one reason firms shouldn’t treat 2028 as a hard deadline just yet.

What we still don’t know

Fees were the other point of substance in this week’s exchange. Lord Pitt-Watson said the government expects the FCA’s charges to be “proportionate and consistent with the FCA’s wider fee framework,” with smaller firms paying less than larger ones – but the detailed fee structure will only emerge through a future consultation. For firms trying to budget ahead, that’s still a gap.

We also don’t yet know which firms will make up that first 2028 cohort, or what the criteria for sequencing will be. Given the government’s emphasis on proportionality and risk, it’s a reasonable bet that firm size, risk profile, or sector may all play a part – but nothing has been confirmed.

Why this matters now

We’ve been tracking this reform since it was first confirmed, from what we knew (and didn’t know) in the early days of the announcement through to the concerns raised by professional bodies as the shape of the Single Professional Services Supervisor model became clearer. What’s changed this week isn’t the destination – the FCA taking over AML/CTF supervision of legal, accountancy and trust and company service providers remains the plan – but the fact that a timeline now exists in Parliamentary record, rather than in consultation documents alone.

For firms, that has two practical implications. First, this isn’t happening tomorrow: the SRA remains your AML supervisor, and will continue to be for some time yet. Second, “some time yet” is no longer open-ended. With a 2028 start point and a mid-2030 completion target now on record, there’s a genuine window to prepare properly rather than scrambling later.

What legal firms should be doing in the run up to the FCA becoming their regulator

Nothing about your underlying AML obligations changes as a result of this announcement, because the Money Laundering Regulations 2017 remain the framework, whoever is supervising against them. What does matter is being ready for a supervisor that, by the FCA’s own reputation, tends to expect more granular, evidence-based demonstration of compliance than firms may currently be used to. In practice, that means:

• Making sure your firm-wide risk assessment is current, well-evidenced, and genuinely reflects your client base and risk exposure, not a template exercise
• Reviewing your AML policies, controls and procedures for gaps before someone else finds them for you
• Keeping file-level evidence in good order, so that when supervision does move, you can demonstrate compliance rather than just assert it
• Making sure your COLP, COFA and MLRO/MLCO understand the direction of travel, so nothing about the eventual transition comes as a surprise to your senior management

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