UK watchdog calls for brokers to enhance money laundering safeguards

(Reuters) - Britain's financial watchdog said on Thursday that wholesale brokers must upgrade their systems and controls after a review revealed continuing deficiencies in their safeguards against money laundering.

The review by the Financial Conduct Authority (FCA) found the firms were underestimating their exposure to money-laundering risks and depending too much on others in the transaction process to conduct necessary customer checks.

The regulator added that there was a need to improve inter-firm information, as well as increase awareness about money laundering in wholesale brokers' suspicious activity reports.

"Firms need to keep their controls under review and ensure they are effective against financial crime," Steve Smart, joint executive director of enforcement and market oversight at FCA, said.

(Reporting by Radhika Anilkumar in Bengaluru; Editing by Shounak Dasgupta)