UK MLR Amendments 2026 for Fund Managers

On 30 June 2026, the Money Laundering and Terrorist Financing (Amendment) Regulations 2026 (SI 2026/621) came into force, making targeted changes to the UK's 2017 Money Laundering Regulations (”MLRs”). The stated goal, following HM Treasury's consultation, is a more proportionate, risk-based regime, improving the effectiveness of the MLRs. This means fewer automatic obligations, more room for firms to exercise judgment.

Read in isolation, this is a routine national update. Read against the calendar, it is more than that. Twelve months from now, on 10 July 2027, the EU's Anti-Money Laundering Regulation (”AMLR”) begins to apply, standardising customer due diligence across all 27 Member States with less national discretion, not more.

For managers and administrators running UK and EU structures side by side, the question is no longer what either regime requires, but how far apart the two are drifting and where they still align.

What Changed in the UK MLRs on 30 June 2026?

The amendments are targeted rather than a rewrite. Three groups of changes matter for private fund operations.

When Is EDD Still Mandatory Under the 2026 MLRs?

Two Enhanced Due Diligence (”EDD”) triggers have been recalibrated. Mandatory EDD now applies only to counterparties in FATF Call for Action countries and to transactions that are unusually complex or unusually large. The automatic grey-list trigger is gone.

• Geographically, the automatic EDD obligation under Regulation 33(1)(b) previously applied to counterparties established in any country on the FATF grey list of jurisdictions under increased monitoring. It now applies only to countries subject to a FATF Call for Action: as of June 2026 Iran, North Korea and Myanmar. Grey-list jurisdictions remain a relevant geographical risk factor, and EDD still applies wherever a firm identifies high risk.
• On transaction type, a slight adjustment of words with potential practical consequences. EDD was previously mandatory for transactions that are "complex or unusually large"; the trigger now reads "unusually complex or unusually large in each case given the nature of the transaction". The other limbs of the obligation, transactions in an unusual pattern or with no apparent economic or legal purpose, are unchanged. For private funds, the change matters because fund transactions are frequently complex in the ordinary sense: a subscription routed through a feeder vehicle or an SPV is, on paper, a multi-layered transaction. Under the old wording, that routine complexity could trigger mandatory EDD. "Unusually complex" and “in each case given the nature of the transaction” should make the benchmark relative to what is normal for the sector, so a standard layered subscription no longer falls into mandatory EDD by default. Needless to say, where a structure genuinely is unusual, the obligation still bites, and firms will need to document why they judged it one way or the other.

How Do the 2026 MLRs Treat Pooled Client Accounts?

Pooled client accounts have long been an AML friction point, because the bank sees its customer, the account holder, but not the underlying investors whose money moves through the account. Whether a bank would accept that arrangement depended on guidance and its own risk appetite, which is why practice varied from institution to institution and why client money accounts have occasionally held up fund closings.

The amendments put the arrangement on a statutory footing, for pooled accounts opened from 30 June 2026 onward. The account-providing bank must now take reasonable measures to understand the purpose of the account, satisfy itself that the intended use is consistent with the customer's business and risk profile, and assess, manage, and mitigate the associated risk, and it must be able to demonstrate this to its supervisor. Simplified due diligence can be applied within that framework, but it is no longer simply a matter of the bank's own appetite. For administrators and AIFMs, the practical consequence runs the opposite way to "simplified": expect more structured questions at account opening, not fewer.

A bank may apply a simplified, risk-based approach to a pooled account where three conditions are met:

• the account holder is itself subject to the MLRs or an equivalent overseas regime,
• the relationship presents a low risk of money laundering, and
• information on the identity of the underlying clients is available on request.

That last condition carries the operational weight for fund administrators and law firms: they must keep written records on the underlying investors and be able to produce them when the bank asks. The practical detail sits in industry guidance: the Joint Money Laundering Steering Group has added a dedicated annex on pooled client accounts (Annex 5-V) to Part I of its Guidance, which has received HM Treasury approval.

Sterling thresholds, shelf companies, trusts, and crypto

Monetary thresholds move from euros to sterling, generally on a 1:1 basis but with exceptions where a direct conversion would fall below FATF standards: the €1,000 occasional-transaction threshold, for example, becomes £800. Policies and systems referencing thresholds need a line-by-line check rather than a find-and-replace.

Three further changes touch fund structures at the edges. The sale of off-the-shelf companies is now explicitly within scope of trust or company service provider regulation, relevant for the SPV formation chain. The Trust Registration Service is adjusted in both directions: non-UK trusts holding UK land acquired before 6 October 2020 come into scope, while a new de minimis exemption removes certain low-value, low-risk trusts, a point worth checking for trust-structured LPs. And strengthened requirements for cryptoasset businesses, including EDD for cryptoasset correspondent relationships, follow on a staggered timeline: 1 February 2027 for the EDD provisions, 25 October 2027 for the full change-in-control regime.

How Do the UK Amendments Compare to the EU AMLR?

The UK amendments land twelve months before the EU's Anti-Money Laundering Regulation applies on 10 July 2027. The direction of travel differs: the UK is narrowing automatic obligations and widening the space for firm-level judgment, while the AMLR replaces national discretion with a single, directly applicable rulebook and binding technical standards. The differences between the two regimes, from beneficial ownership thresholds to permitted verification methods, predate these amendments; what the amendments change is the UK side of the EDD equation. For the full picture of what the AMLR requires of private funds, see our dedicated article.

For cross-border managers, the practical steps are concrete: map which vehicles, investors, and service relationships sit under which regime; review UK policies, controls and procedures against the new EDD wording and sterling thresholds; and treat the period to July 2027 as one preparation window, since the same investor data model has to serve both regimes.

How Vestlane Supports Cross-Border Compliance

Vestlane supports investor onboarding and KYC/AML workflows across 14+ jurisdictions, including the UK, Germany, Luxembourg, Ireland, and the Channel Islands, with compliance logic configured per fund and per jurisdiction. As the UK and EU rulebooks evolve on separate tracks, that configurability is what keeps a cross-border fund operation on one platform rather than two parallel processes.

If you are reviewing your setup for the 2027 landscape, we are happy to show you how it works in practice.