The UK’s Financial Conduct Authority (FCA) has lashed out at what it calls ‘poor safeguarding’ by British financial services firms.
The UK finance regulator is proposing new rules around funds held by payments and e-money firms. These companies must now safeguard funds if customers risk losing money, or if a company’s failure results in delays to funds being returned.
If approved, the FCA proposals will replace the existing e-money safeguarding regime with a client assets (CAAS) counterpart. The new regime, in the FCA’s ideal world, will be designed to work with payments firms’ business models and will publish interim safeguarding rules for said firms by the middle of next year.
Matthew Long, FCA Director of Payments and Digital Assets, said: “We’re consulting on proposals to make safeguarding rules stronger and clearer for payment and e-money firms so customers get as much of their money back as quickly as possible if the firm goes out of business.”
The FCA added that its cost benefit analysis of the proposals has been subject to review by an independent panel, and that a consultation on the proposed rules has been opened for stakeholders until 17 December 2024.
Should the rules be approved it will mark the latest change in official FCA requirements this year following a series of updates. So far, the regulator has made changes to its rules around public listing, aiming to make the environment more attractive for British public listed companies, and cash access – the latter being an area of interest for the newish Labour government.
