UK Money Transfer & Hawala Compliance, FCA & HMRC
UK Money Transfer & Hawala Compliance: Authorisation and AML
Operate a money transfer, remittance or Hawala (informal value transfer) business in the UK? Alumni Compliance helps you become and stay compliant, whether you need FCA payment institution authorisation or HMRC money service business (MSB) registration. We deliver end-to-end support: permissions scoping, applications, AML/CTF systems and controls, safeguarding arrangements, policy drafting and hands-on liaison with regulators.
Who we help
UK regulatory landscape in brief
Money transmitters generally need either FCA authorisation/registration as a payment institution under the PSRs 2017, or HMRC registration as an MSB under the Money Laundering Regulations 2017 (MLR 2017). If you are already supervised by the FCA, you do not also register with HMRC. Hawala/alternative remittance businesses are in scope of HMRC MSB supervision and must register to operate legally.
Under the PSRs 2017, payment institutions must meet conduct and prudential standards. This includes safeguarding relevant customer funds, so they’re protected on firm failure; the FCA finalised further changes to strengthen safeguarding (effective from May 2026). Small Payment Institutions remain able to opt-in to safeguarding rules.
All MSBs must implement proportionate AML/CTF controls, including customer due diligence, record-keeping and suspicious activity reporting. Money transmitters must also comply with the Funds/Wire Transfer requirements on payer/payee information.
UK financial sanctions apply in parallel. You must not make funds or economic resources available—directly or indirectly—to designated persons, and robust screening/controls are expected as part of a risk-based approach.
What’s required for Hawala brokers?
“Hawala” (and other informal value transfer systems) arrange cross-border transfers through trusted correspondent networks. In the UK, these are treated as money transmission and require registration with HMRC for AML supervision; operating unregistered is unlawful. Depending on your exact model, you may also need FCA authorisation/registration under the PSRs 2017. We will map your activities to the perimeter, register you with HMRC where appropriate, and build controls that reflect the risks inherent in IVTS/Hawala.
Authorisation or registration: choosing the right route
If you provide regulated payment services (money remittance) by way of business, you will typically need to be authorised or registered with the FCA as a payment institution (API or SPI). Where your model does not require FCA permissions, you must register with HMRC as an MSB before trading. We will confirm the correct route, prepare all materials, and submit via the appropriate portals. FCAGOV.UK
What Alumni Compliance delivers
We handle the regulatory process from first scoping discussion to regulator decision, then support you post-approval so controls embed in day-to-day operations.
Banks and regulators expect clear evidence that remittance firms and Hawala brokers are correctly authorised or registered, safeguard customer money where required, and operate effective AML/sanctions controls. With safeguarding reforms taking effect from May 2026 and HMRC continuing proactive supervision of MSBs, early preparation reduces onboarding friction with banking partners and de-risks supervisory interventions.
Frequently asked questions
Yes. UK Government guidance makes clear that informal money transfer businesses, including Hawala, must register with HMRC to operate legally.
Safeguarding is the segregation and protection of relevant customer funds so they can be returned on firm failure. It applies to authorised payment institutions and e-money institutions; small payment institutions can opt-in. The FCA has announced strengthened rules from May 2026.
Yes. UK Funds/Wire Transfer requirements mandate specified payer/payee data when transmitting funds to combat money laundering and terrorist financing.
Get started
Speak to Alumni Compliance for a clear, practical route to compliance—FCA authorisation or HMRC registration, fit-for-purpose AML/CTF and sanctions frameworks, and ongoing support that keeps your business moving.