FCA publishes Multi-firm review findings – safeguarding arrangements of non-bank PSPs

Regulatory Updates | 04/07/19

The Financial Conduct Authority has published the findings of the multi-firm review it has conducted over the past six months, which assessed how well non-bank PSPs met the requirements to safeguard customer funds in practice and whether e-money holders and payment service users may suffer financial loss or other harm if a firm fails.
The findings cover:
• How well firms understood which funds are “relevant funds” (i.e. as defined in the PSRs and the EMRs)
• How effective were firms’ safeguarding procedures and documentation
• How well firms met the FCA’s expectations on segregating funds
• Whether firms were clearly designating accounts as safeguarding accounts
• How effectively firms carried out reconciliations
• The effectiveness of firms’ governance and oversight arrangements
The FCA has separately written to the CEOs of non-bank payment service providers highlighting in particular shortcomings in segregation and risk management and oversight. These firms (i.e. all e-money institutions and all authorised payment institutions) are required to formally attest to the FCA by 31 July 2019 that they are satisfied that they meet the requirements.