With the advent of open banking and the increased use of online services during Covid-19, the payment services and e-money markets are thriving. With the increasing scale and importance of the sector it's perhaps no surprise that the FCA has started to think about what rules could create good risk management and robust operations within payment institutions.
The FCA wants to bring in new rules as soon as possible to help to safeguard customers' funds that are held with payment and e-money institutions. These rules will be in place as a temporary measure and another consultation will be released later in the year to put in place more permanent rules.
The proposed new rules were published in a consultation on 22 May 2020 and insitutions only have until 5 June to respond. The new rules are focussed on the areas that will lead to strengthened guidance in a the key areas relating to customer funds, including:
safeguarding customer funds,
governance and control arrangements within the institution and,
wind down planning.
Responses are due by the 5th June and, if those responses do not alter the FCA's view, the guidance as noted in the consultation will be applicable until a full consultation takes place on changes to the Approach Document later in the year.