The Financial Conduct Authority has imposed restrictions on six unregulated lenders after raising concerns about their anti-money laundering controls while assessing their applications for registration. The regulator said on Friday 23 October that the restrictions limit the firms' ability to take on new customers or to do new business with existing ones, including extending credit.

The six firms fall into the FCA's Annex 1 category, which covers lenders that are not authorised for regulated activities but must register with the watchdog for anti-money laundering supervision. The regulator has been tightening its grip on the segment this year. In August it said it had identified a number of risks among Annex 1 firms, in particular their potential to facilitate financial crime, and warned that registration applications would face closer scrutiny and take longer to process.

The FCA also flagged risks to consumers and markets from unregulated lending conducted through complex structures, including special purpose vehicles, and criticised firms for leaning on their parent companies' financial crime controls rather than maintaining their own.

"We have warned Annex 1 firms that they face increased scrutiny," said Steve Smart, executive director lead for fighting financial crime at the FCA. "They must demonstrate they can manage the money laundering risks they face. Where they cannot satisfy us, we will intervene."

The action follows the collapse in February of bridging lender Market Financial Solutions, which fell into administration amid allegations of financial irregularities and left creditors facing losses of at least £1.3bn. MFS was itself an Annex 1 lender, and the FCA opened an enforcement investigation into the firm in March.

For private credit managers, the restrictions matter beyond the six firms involved. Specialist and non-bank lenders operating through SPV structures are a common destination for asset-backed and fund finance capital in the UK, and the FCA's focus on firm-level controls signals that funders will need to assess a borrower's own compliance framework rather than relying on group-level arrangements. The intervention also shows the regulator is prepared to halt new lending at the registration stage, a lever that could affect deployment for capital providers backing lenders whose applications are still pending.