The move follows an enquiry into how UK financial institutions are following the legislative requirements based on global standards set by the international Financial Action Task Force. The FCA’s investigation was prompted by NatWest’s debanking scandal in 2023. While the investigation found that no firms were denying accounts based on status and most organisations did not subject PEPs to excessive or disproportionate checks, the FCA stated that all firms could improve. The FCA presented recommendations for organisations to:

ensure a definition of a PEP to the minimum required by law and not go beyond that review the status of PEPs and their associates swiftly once they leave public office communicate to PEPs effectively and in line with the Consumer Duty effectively consider the actual level of risk posed by the customer, and ensure that information requests are proportionate to those risks improve the training offered to staff who deal with PEPs

Sarah Pritchard, executive director of markets and international at the FCA, stated: "Public service naturally comes with greater scrutiny. But it must be proportionate and shouldn’t disadvantage people running for office or taking senior public roles, or their families. "That requires a balancing act. Most firms try to get it right but there is more they can do. We’re following up with those firms that were getting the balance wrong to ensure they make changes." The FCA is now further consulting the industry on whether UK-based PEPs should qualify for lower risk status, as well as possibly introducing special protections for non-executive members of the civil service. The consultation will close on October 18th.