The FCA has begun reaching out directly to MLCOs and MLROs in the legal sector to inform how it will approach AML supervision. If you have received an email from the SRA inviting you to take part in this research, the deadline to register your interest is 1 May. Here is why this matters — and why you should not ignore it.

Action required: If you are an MLCO or MLRO and have received an email from the SRA about FCA research participation, expressions of interest must be submitted by 1 May 2026. Check your inbox now if you have not already done so.

Something significant happened quietly in the last week or so. The Financial Conduct Authority – which is set to become the sole AML supervisor for the legal sector – has begun conducting direct research with the profession. Via an email distributed by the SRA to MLCOs and MLROs, those in AML compliance roles have been invited to engage with the FCA’s research process, ahead of it designing its supervisory approach for law firms.

This is not a formal public consultation. There is no announcement on the FCA’s website. The invitation has gone out through a targeted SRA email with a private link, which is why it may not have appeared on your radar unless you were directly in scope. But its significance should not be underestimated. This is the FCA taking its first steps toward understanding how the legal sector actually works – from the inside – before it takes the supervisory reins.

For those who care about how the FCA’s supervision regime is shaped, this is the moment to engage. It will not come around again in quite the same form.

The bigger picture: what is changing and why

To understand why this research matters, it helps to understand how we got here.

In October 2025, the UK government announced that the Financial Conduct Authority would become the Single Professional Services Supervisor (SPSS) for AML and counter-terrorist financing across the legal, accountancy, and trust and company services sectors. This decision consolidates oversight that was previously split across 23 separate professional body supervisors – including the SRA – into a single, independent public body.

The decision followed years of criticism that the existing supervisory landscape was fragmented, inconsistent, and too variable in the rigour of its enforcement. The government’s consultation response was blunt: the current system had produced “continued weaknesses in supervision.” The FCA, with its established enforcement capabilities, data-driven supervision model, and experience regulating financial services firms, was the chosen solution.

Legislation is still required before the FCA can formally assume this role, and the timeline for full implementation is likely to run to 2028–2029. But the research now underway signals that the FCA is not waiting for the law to be passed before it starts building sector-specific expertise. It is doing the groundwork now – and it wants to hear from the compliance professionals at the coalface.

What the FCA is asking about

The research exercise being conducted is preliminary and scoping in nature, but the questions it focuses on are revealing. Based on what is known about the invitation, the FCA is seeking information across five areas:

• Work type. Specifically: conveyancing, tax advice, insolvency practice, or “none of the above.” The selection of these three practice areas is deliberate – they represent the highest-risk categories identified in the government’s 2025 National Risk Assessment, where legal services are most exposed to money laundering risk.
  
  
• Geographical location. Regional variation in the profile of legal work – and therefore in AML risk — is a known factor. The FCA will likely want to understand whether a London-based commercial firm’s risk exposure differs materially from a regional high-street practice.
  
  
• Type of practice. Whether the respondent is at a firm or a sole practitioner. This is significant: approximately 6,500 SRA-regulated firms fall within scope of the MLRs, spanning everything from large multi-office practices to single-solicitor firms. The FCA’s supervisory approach will need to be proportionate across this range.
  
  
• Whether the respondent is an MLRO, MLCO, AML compliance support, administration, or another role. This helps the FCA map where AML responsibility actually sits within firm structures, which in practice varies considerably.
  
  
• The state of AML systems: manual, automated, or mixed. This is the most analytically interesting question of the group. It asks firms to characterise the extent to which their AML compliance processes are mostly manual, mostly automated, or a mixture of both.

Why the manual vs. automated question matters most

The question about automation is not incidental. It goes to the heart of what the FCA will find when it begins supervising the legal sector in earnest – and it reflects a known tension in the profession.

The SRA’s 2024–25 AML report found that only 29% of legal firms assessed were fully compliant with AML requirements. Among high-risk legal firms, that figure fell to 26%. Much of this non-compliance is not wilful – it reflects the challenge of maintaining consistent, documented, evidence-based compliance processes across high-volume caseloads, with teams of varying sizes and experience, often relying on manual file reviews, paper-based checklists, and individual judgement calls.

The FCA, by contrast, is a data-driven regulator. It is accustomed to supervising firms that have automated transaction monitoring, documented risk scoring, audit trails, and real-time reporting. Its approach to law firms will be shaped by what it discovers about the gap between those expectations and current legal sector practice.

If the research reveals that a large proportion of law firms are operating almost entirely on manual systems – which is likely – the FCA will need to calibrate its supervisory approach accordingly. Or it will conclude that the sector needs to modernise faster than it might otherwise choose to.

Either way, this data will inform how the new regime is designed. Firms that engage with the research have an opportunity to ensure that the picture the FCA receives reflects the reality of their operations – and that the diversity of the profession is understood before the rules are written.

What the FCA’s supervision style will mean in practice

For compliance professionals who have worked primarily within the SRA’s supervisory framework, the FCA represents a meaningful change in culture and approach, even though the underlying legal obligations under the Money Laundering Regulations remain the same.

The SRA’s style has historically been principles-based and guidance-led. Its supervisory engagements, while increasing significantly in frequency and rigor in recent years, have been rooted in a framework that acknowledges the complexity of legal practice, the importance of professional judgement, and the role of guidance documents developed with the profession.

The FCA is different. Its supervision model is built on data, systems, and outcomes. It will want to see not just that a firm has policies, but that those policies demonstrably work in practice. It will expect senior management to be personally accountable, documented evidence of oversight, and audit trails that can withstand scrutiny. Its enforcement powers are considerably broader; it can impose fines calibrated to up to 20% of relevant revenue, compared to the SRA’s more contained penalties, and it can apply “skilled person” reviews that require firms to commission independent external assessments at their own cost.

There is also the question of dual regulation. Even after the FCA takes over AML supervision, the SRA will retain its powers over professional conduct, the Solicitors Accounts Rules, and its own Code of Conduct for Firms. A CDD failure, for example, could simultaneously engage FCA enforcement for breach of the MLRs and SRA enforcement for breach of Rule 2.1 of the SRA’s Code. This “double exposure” is a genuine concern that the profession has raised – and one the government has yet to resolve in detail.

The compliance implications for MLROs and MLCOs specifically

The FCA’s research focus on MLRO and MLCO roles is particularly significant for those individuals personally. Under the FCA’s proposed framework:

• Fit and proper assessments are likely to apply to MLROs, MLCOs, and other beneficial owners, officers, and managers (BOOMs). These are more extensive than current SRA requirements and will likely involve pre-appointment assessments and annual attestations.
  
  
• Personal accountability is likely to be codified more formally than under the current regime. The FCA’s model in financial services places direct regulatory responsibility on named individuals in compliance roles, with the potential for personal sanctions where failures occur.
  
  
• The MLRO’s competence will be assessed against FCA expectations that include understanding the firm’s business model in depth, being able to articulate its money laundering risk profile, and — where AI or automated tools are used — explaining how those systems work and what outcomes they produce.
  
  

For sole practitioners or smaller firms where the MLCO, MLRO, and COLP roles are all held by the same person, the additional burden is real. The FCA’s research into practice size and role distribution will hopefully inform how proportionality is built into the new regime, but that argument can only be made effectively if the profession engages with the research in the first place.

Why engagement now matters

The FCA is approaching the legal sector largely as an unknown quantity. It is a sophisticated financial services regulator with deep expertise in banking, investment management, and insurance, but it has limited experience of the operational realities of a residential conveyancing team, a tax advisory practice, or a high-street insolvency firm. It does not yet know what proportion of firms use automated onboarding tools, how source of funds checks are typically evidenced, or how MLRO responsibilities are distributed across teams of varying sizes.

This research exercise is its attempt to find out  directly from the people who do the work. That creates a genuine opportunity for the profession to shape the FCA’s understanding before its supervisory framework is designed, rather than reacting to a framework built on assumptions.

Previous regulatory consultations in the legal sector have been poorly attended by the wider profession, with responses dominated by large firms, trade bodies, and compliance consultancies. The result has been frameworks that often reflect the experience of well-resourced firms, and that can land awkwardly in smaller practices.

This research is different in a useful way: it is targeted at the individuals actually doing AML compliance within firms of all sizes, across the full spectrum of practice types. If you are an MLRO at a five-partner regional firm doing predominantly conveyancing work on largely manual systems, your perspective is precisely what the FCA needs to hear – and is the perspective most likely to be absent if you do not respond.

What you should do

The immediate action is simple: if you have received the SRA’s email, complete the expression of interest form before 1 May. It is a short form, and registering your interest does not commit you to anything – it puts you in the pool for the FCA’s research.

Beyond that, the research exercise is a useful prompt to take stock of where your firm’s AML framework actually stands, not against the SRA’s current expectations, but against the more demanding standard the FCA is likely to bring. The questions it is asking, particularly about the manual vs. automated nature of your processes, are ones that will become increasingly important to answer clearly as the transition progresses.

Firms that use the next two to three years to strengthen their documentation, evidence their controls, invest in appropriate technology where it makes sense, and ensure their MLRO and MLCO governance is robust will be significantly better placed when FCA supervision arrives. Those that treat the transition as something to deal with when it becomes unavoidable are likely to find it more disruptive and more expensive.

The FCA’s supervision era for the legal sector has not formally begun yet, but it has clearly started.

Note: The FCA research invitation was distributed via a targeted SRA email and does not appear in any public FCA announcement or consultation register as of the date of this article (April 2026). This article is based on information circulating within the legal compliance community and verified contextual research. Firms should check their own email correspondence from the SRA for the relevant link.