Your MLRO Has Resigned: A 30-Day Cover and Recruitment Plan
When a Money Laundering Reporting Officer hands in their notice, the clock starts on several things at once. The firm must never be without a nominated officer. Suspicious activity reporting has to continue without a gap. The regulator needs to be told. And a replacement has to be found in a market where experienced MLROs are scarce.
This is a practical 30-day plan for firms in that position, drawn from how we handle MLRO resignations in our own searches.
Why an MLRO Resignation Is More Urgent Than Most
Most senior departures leave a gap in leadership. An MLRO departure leaves a gap in a legal function. The Money Laundering Regulations 2017 require firms to have a nominated officer who receives internal suspicious activity reports and decides whether to report to the National Crime Agency. If that role is empty, even briefly, suspicious activity may go unreported, consent requests may stall and the firm is in breach.
At firms within the Senior Managers regime, the MLRO also holds SMF17, which means the replacement needs FCA approval before they can take up the function permanently. At payment, e-money and crypto-asset firms outside the regime, there’s no SMF17, but the FCA still expects to be told who the nominated officer is and will look closely at the arrangements.
The 30-Day Plan
| When | Action | Owner |
|---|---|---|
| Day 1 | Confirm the leaving date, whether the MLRO will work their notice, and whether garden leave applies | CEO / HR |
| Day 1–2 | Decide who will act as nominated officer from the leaving date: a deputy MLRO, another Senior Manager, or an interim | CEO / board |
| Day 1–5 | Start the handover: open SARs, consent requests, ongoing investigations, monitoring backlogs, sanctions matches, regulatory correspondence | Departing MLRO |
| Week 1 | Brief the board and, for a significant firm, speak to the FCA supervisor | CEO / compliance |
| Week 1 | Agree the brief for the permanent role: SMF17 alone or combined with SMF16, time commitment, sector experience needed | CEO / board |
| Week 1–2 | Line up interim cover if no suitable internal person can act | CEO |
| Week 2 | Start the permanent search, including direct approaches to passive candidates | Recruiter |
| By leaving date | Submit Form C for the departing SMF17 within seven business days of them ceasing the function, and update Statements of Responsibilities | Compliance |
| Weeks 3–4 | Shortlist, interview and test fit and proper readiness; request regulatory references early | Recruiter / firm |
| Day 30 | Offer made or close; approval application in preparation; interim arrangement confirmed until approval | Firm |
Some firms won’t need every step. The point is that each item has an owner and a date, so nothing depends on the departing MLRO remembering it.
Step 1: Keep a Nominated Officer in Place
This is the one thing that can’t slip. Before anything else, decide who will receive internal reports and make decisions on reporting from the day the current MLRO stops. The options are usually:
- A deputy MLRO who already knows the firm’s cases and systems. The best option if they’re experienced enough.
- Another Senior Manager, such as the compliance officer, as a temporary measure. Workable at small firms, but check they have the time and knowledge.
- An interim MLRO, often the right answer where there’s no deputy or the firm’s financial crime risk is high.
Where the role is SMF17, the 12-week rule allows a person to cover an unexpected vacancy without prior approval. Since the April 2026 reforms, the firm must submit an approval application within those 12 weeks if the person covering is to continue, and the Senior Manager Conduct Rules apply to the person covering.
Step 2: A Handover That Covers What Matters
MLRO handovers often focus on policies and miss the live issues. A useful handover covers:
MLRO handover checklist
- Open internal suspicious activity reports and their status
- SARs submitted to the NCA in the past 12 months, and any pending consent (DAML) requests
- Ongoing investigations, law enforcement requests and production orders
- Backlogs in customer due diligence, periodic reviews and transaction monitoring alerts
- Sanctions screening issues and any reports made
- The latest business-wide risk assessment and annual MLRO report
- Open actions from internal audit, compliance monitoring or the regulator
- Key relationships: the FCA supervisor, the NCA, correspondent banks and technology providers
- Anything the departing MLRO is worried about but hasn’t formally recorded
The last item is often the most important. A departing MLRO will usually tell you what worries them if asked directly.
Step 3: Tell the Right People
For an SMF17 holder, the firm must submit Form C within seven business days of them ceasing to perform the function. Our guide to the SMCR notification forms explains the process. Where responsibilities are reallocated, update the relevant Statements of Responsibilities. For significant firms, it’s good practice to tell the supervisor in advance rather than let them find out from the form.
Step 4: Interim Cover, If You Need It
Interim MLROs are usually available at short notice. Typical day rates for an approved interim MLRO are £700–£1,100 outside IR35, depending on the firm’s size and risk. Our SMF and compliance salary guide sets out current rates. When choosing an interim, check:
- direct experience of your sector’s financial crime risks
- whether they’ve held SMF17 before, which makes approval straightforward
- their other commitments and how many days a week they can give you
- whether they’re willing to stay until the permanent MLRO is approved and in post.
A growing payments firm’s MLRO resigns with one month’s notice and no deputy. The compliance officer is already stretched. The firm appoints an interim MLRO three days a week from the leaving date to keep reporting running and clear a monitoring backlog, while the permanent search runs in parallel. The interim stays for a two-week overlap once the permanent MLRO starts.
Step 5: Recruit the Permanent Replacement
Before starting the search, decide what the role really needs. A resignation is a chance to rethink the structure. Should SMF17 now be separate from compliance oversight? Does the firm’s growth call for a more senior MLRO? Would a fractional arrangement suit a smaller firm better? Our MLRO recruitment page sets out what we look for, and our compliance officer page covers combined roles.
Experienced MLROs are rarely on the market, so expect to approach candidates who aren’t looking. Allow for notice periods of one to three months and, for SMF17, the FCA’s assessment of up to three months once a complete application is submitted. That’s why interim cover so often runs for three to six months.
Common Mistakes
- Leaving a gap in the nominated officer role, even for a few days.
- A handover that covers policies but not live cases.
- Missing the Form C deadline.
- Assuming the compliance officer can simply absorb the role without checking capacity.
- Starting the permanent search late, so interim cover runs far longer than planned.
For Payment, E-Money and Crypto Firms
If your firm is authorised only as a payment or e-money institution, or registered as a crypto-asset business under the Money Laundering Regulations, the MLRO isn’t an SMF17, but everything else in this plan still applies. Keep a nominated officer in place, hand over live cases, tell the FCA who the new nominated officer is, and recruit someone with direct sector experience.
MLRO Cover and Recruitment
Services and guides for firms replacing an MLRO. Every SMF search is led personally by Adrian Lawrence FCA
MLRO Recruitment
Permanent, interim and fractional MLROs.
→ MLRO recruitment (SMF17)
→ Fractional and interim cover
Cover Rules
Temporary cover and notifications.
→ The 12-week rule
→ Notification forms B to E
Pay
Interim day rates and salaries.
→ SMF and compliance salary guide
→ When fractional SMFs work
Related Roles
Roles alongside the MLRO.
→ Compliance officer (SMF16)
→ Chief Risk Officer (SMF4)
Every SMF search is led personally by Adrian Lawrence FCA
Frequently Asked Questions
Can our compliance officer act as MLRO temporarily?
Often, yes, particularly at smaller firms, provided they have the time and knowledge. Where the role is SMF17, the 12-week rule covers unexpected vacancies, and an approval application must be submitted within 12 weeks if they’re to continue.
How quickly can we get an interim MLRO?
Usually within days. Interim MLROs who have held SMF17 before are the quickest to put in place.
How long will the permanent search take?
Typically three to five weeks to shortlist, then notice periods and, for SMF17, the FCA’s assessment. Allow three to six months in total.
Do we need to tell the FCA?
Yes. For SMF17, submit Form C within seven business days. For non-SMF MLROs, tell the FCA who the new nominated officer is.
About the Author
Adrian Lawrence FCA is the founder of SMF Capital. He is a Chartered Accountant and Fellow of the ICAEW, holds a practising certificate in his own name, and is a former listed-company Finance Director with a BSc from Queen Mary College, University of London. He founded FD Capital in 2018 and has since built a network of five specialist recruitment practices. He leads every SMF Capital MLRO search personally, including interim cover while the permanent appointment is made. View Adrian’s ICAEW profile.
Has Your MLRO Just Resigned?
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Adrian Lawrence FCA is the founder of SMF Capital and a Fellow of the Institute of Chartered Accountants in England and Wales and holds an ICAEW practising certificate in his own name. He holds a BSc from Queen Mary College, University of London, and has over 25 years of experience working with boards, investors and business owners across the UK. He founded SMF Capital to help FCA and PRA-regulated firms appoint the Senior Managers the regulators expect, with the fit and proper assessment built into every search, and personally leads every Senior Manager Function search.
