The FCA have just announced a consultation on guidance to strengthen payment services firms’ prudential risk management and safeguarding arrangements, this consultation is only open until 5th June, so both AFEP and firms need to act with speed to respond. The consultation can be found by clicking here
The FCA have said that the updated guidance as a result of this consultation will provide additional direction for firms to meet their safeguarding requirements and it will outline the FCA’s expectation of firms to put in place more robust plans for winding down, so that customer funds are returned in a timely manner in the event of possible firm failures.
The FCA have expressly said that the payments sector is a priority area and the guidance is part of a broader programme of work that they were planning on starting later. Given the financial pressure they are observing in the industry, they have now brought this part of the changes forward. They still intend to consult more broadly on further changes for the payments sector later in the year.
The FCA are suggesting that updated guidance resulting from this consultation will be published at the end of June.
AFEP also have a meeting with the FCA in early June so we will be raising this with them then.
I would be grateful if all firms could read the consultation and consider their response. AFEP will be responding, so please make sure you send any feedback to me by 1st June, and please make sure that you as an individual firm respond.
I will be in touch with further information next week