For the EEA payment service providers now in the FCA’s reach because of Brexit, the past few months have been a sharp learning curve as to expectations. CP21/3 provides a steer through the proposed changes to the Payment Services and Electronic Money Approach Document.
For the payments compliance and regulation sector, 2021 has continued at the same frantic pace as 2020, with multiple consultations issued in the first quarter by HM Treasury, the PSR and the FCA.
In this series of blogs, fscom subject matter experts will analyse the changes proposed in the FCA’s CP21/3, issued at the end of January.
Yesterday HM Treasury issued a consultation on a proposed special administration regime for insolvent payment and e-money institutions.
Speed is clearly of the essence for the government as the statutory instrument was passed following only informal consultation with trade associations (and only comes into force next week[1]). This consultation is on the regulations and will close in six weeks’ time on 14 January. The rules of the regime will be published in a fortnight’s time and will be subject to consultation until 28 January.
Payment and e-money institutions have long called for clearer guidance on the FCA’s expectations of how they meet their obligation to protect customers’ funds. Friday week ago, the FCA issued a consultation on temporary guidance they wish to put in place on safeguarding and capital adequacy ‘in light of the exceptional circumstances of the coronavirus pandemic’.
Crown Currency Exchange, a business based in Cornwall that sold currency mainly to consumers for holiday spending but was also a small payment institution, collapsed on 4 October 2010 owing £22 million to more than 12,000 customers. In the days and weeks that followed there were, naturally, many angry questions put to the government and the regulator, the Financial Services Authority (FSA), by those who lost money and their representatives as to why this was able to happen.
The Financial Conduct Authority (FCA) is taking every opportunity to warn payment and e-money institutions over “unacceptable” practices in safeguarding client funds, as well as around risk governance and financial management.
The Financial Conduct Authority (FCA) is taking every opportunity to warn payment and e-money institutions over “unacceptable” practices in safeguarding client funds, as well as around risk governance and financial management.