HM Treasury has published the long‑awaited Draft Money Laundering and Terrorist Financing (Amendment) Regulations 2026, marking a significant evolution in the UK’s anti‑money laundering and counter‑terrorist financing (AML/CTF) framework. The draft regulations signal a decisive policy shift — moving the regime away from mechanical compliance and towards effectiveness, outcomes, and demonstrable risk management.
As highlighted by Adriana van der Goes Juric, Chair of the AMLP Forum, these reforms have been highly anticipated and represent one of the most meaningful changes to the UK AML regime in recent years. Read the full article here.
A Fundamental Shift: From Compliance Tasks to Outcomes
At the heart of the draft regulations is a fundamental change in regulatory philosophy. Compliance is no longer judged primarily by whether firms have followed prescribed steps or produced documentation, but by whether their controls are effective in practice.
This marks a shift:
- From process‑driven compliance
- To performance‑driven supervision
Firms are increasingly expected to show that their policies and controls deliver real‑world results, particularly in detecting and preventing money laundering and terrorist financing.
What’s New in the Draft ML/TF (Amendment) Regulations 2026
The draft regulations introduce several notable changes across the AML framework, all cited directly from the published commentary on the draft legislation.
Sharper Customer Due Diligence Triggers
The reforms introduce clearer risk‑based triggers for both Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD). Explicit reference is made to transactions that are “unusually large or unusually complex”, reinforcing the expectation that firms actively identify and respond to genuinely anomalous activity.
Expanded Oversight of Cryptoasset Businesses
The draft regulations broaden the scope and intensity of oversight applied to cryptoasset businesses, reflecting the regulator’s continued focus on addressing emerging financial crime risks in the digital asset space.
Bringing “Off‑the‑Shelf” Company Sales into Scope
A key development is the inclusion of “off‑the‑shelf” company sales within the regulated perimeter. This closes a long‑recognised gap by bringing pre‑formed company sales into scope under the AML regime.
Enhanced Trust Registration Requirements
The draft amendments expand the Trust Registration Service (TRS) requirements, reinforcing transparency and information availability within trust structures.
Updated High‑Risk Jurisdiction Definitions
The definition of high‑risk jurisdictions is updated to align with countries subject to the FATF “call for action”, ensuring closer international consistency in risk classification.
Stronger Supervisory Coordination and Information Sharing
The reforms also enhance:
- Coordination between supervisors
- Information sharing across competent authorities
This reflects an emphasis on system‑wide effectiveness rather than siloed compliance monitoring.
What Happens Next?
According to the published update:
- The draft regulations are to be laid before Parliament for approval
- Once approved, they are expected to come into force 21 days later
This means regulated firms should already be assessing the implications and preparing for alignment with the new outcomes‑driven expectations.
Why This Matters for Regulated Firms
The draft regulations represent a “shift from process to performance,” where compliance is no longer measured by box‑ticking but by proven outcomes.
In practical terms, this underscores:
- Greater regulatory focus on effectiveness
- Increased scrutiny of risk‑based judgement
- Heightened expectations around demonstrable AML impact
The message is clear: having controls is not enough — firms must show that they work.