Emma RadmoreFCA is consulting on how firms can strengthen their safeguarding protections during the Covid-19 crisis. The consultation focuses on the provision of additional guidance for payments firms to strengthen the way they look after their customers’ money.
The guidance centres around:
Safeguarding
- keeping records and accounts and making reconciliations
- safeguarding accounts and acknowledgement letters
- selecting, appointing and reviewing third parties
- when the safeguarding obligations starts
- unallocated funds
- annual audit compliance with safeguarding requirements
- small payment institutions
- disclosing information on treatment of funds on insolvency to customers
Prudential Risk Management
- governance and controls
- capital adequacy
- liquidity and capital stress testing
- risk-management arrangements
- wind-down plans
The consultation asks:
- ‘Do you agree that we should provide additional guidance on safeguarding, managing prudential risk, and wind-down plans? If not, please explain why.’
- ‘Do you agree with our proposed guidance on safeguarding? If not, please explain why.’
- ‘Do you agree with our proposed guidance on managing prudential risk? If not, please explain why.’
- ‘Do you agree with our proposed guidance on wind-down plans? If not, please explain why.’
The consultation will close on 5th June and following that, the FCA plans to send a Dear CEO letter including the guidance with a full consultation following later in the year.