In light of the impact of Covid-19 on firms’ business models, the FCA provided this finalised guidance (https://www.fca.org.uk/publication/finalised-guidance/coronavirus-safeguarding-customers-funds-additional-guidance-payment-e-money-firms.pdf) to strengthen firms’ prudential risk management and arrangements for safeguarding customers’ funds in this period of economic stress.
The finalised guidance follows the consultation paper published by the FCA on 22 May 2020 about coronavirus and safeguarding customers’ funds. The consultation closed on 12 June 2020 following receipt by the FCA of responses from more than 60 organisations, including payment firms, trade associations and law firms.
The guidance for firms on safeguarding and managing prudential risk is already available in the FCA’s payment services approach document.
However, it has been observed that by the FCA from their reviews of firms that some firms are not complying with the regulations as expected. The FCA guidance will clarify ways that firms can comply with the regulations and help prevent potential harm to their customers in the event of insolvency during the Covid-19 pandemic.
This guidance applies to authorised:
- payment institutions or small payment institutions
- e-money institutions or small e-money institutions
- credit institutions and custodians
Kharis & Knoble will help you carry out an independent review in accordance with clause 1.19 of the FCA finalised guidance dated July 2020.
To avoid non-compliance and costly penalty, please contact Kharis & Knoble and we can help you meet your regulatory obligations.