On the 4 July 2019, the FCA released a ‘Dear CEO’ letter that addressed both the positive and negative practices of non-bank Payment Service Providers (“PSPs”) as they seek to comply with their obligations to safeguard customers’ funds. The FCA identified a number of failings in the safeguarding processes of the 11 PSPs it reviewed over a six-month period and has set out mandatory actions for PSPs.
The implementation of MiFID II in January triggered a significant change in the blanket treatment of FX forwards in the UK and, as a result, non-deliverable forwards (NDFs) became regulated products and overnight were reclassified as contracts for difference (CFDs). Any FX brokers that wished to continue offering NDFs were forced to apply to the FCA to obtain the relevant investment firm regulatory permissions in order to continue providing the same range of FX products they had always offered their clients.
With all the excitement around re-authorisation, the ban on credit card surcharges and the new payment services activities, the less headline grabbing regulatory changes introduced by the second payment services directive (PSD2) have been somewhat overlooked. One of these changes relates to complaint handling.
We will be explaining everything payment and e-money institutions need to know about getting re-authorised under PSD2 and the impact of MiFID II on fx forward business in two separate briefings on 12 September.