The podcast outlines significant amendments and guidance concerning payment services and electronic money institutions within the UK, primarily focusing on strengthening consumer protection and market integrity. Key changes include a revised safeguarding regime for relevant funds, detailing how these funds must be held and protected, particularly in the event of a firm's failure, and introducing specific safeguarding audit requirements with a new exemption for smaller firms. Furthermore, the texts address capital requirements, operational risk management, and security measures like strong customer authentication, alongside clarifying reporting obligations and enforcement powers under the Payment Services Regulations 2017 and Electronic Money Regulations 2011. The podcast aims to provide clarity for businesses operating in this sector and enhance regulatory oversight, including the new Fit & Proper requirements.

Financial Conduct Authority's (FCA) intention to consult on a compensation scheme for motor finance customers who were subject to unfair practices. This initiative stems from a detailed review and a Supreme Court ruling that identified instances where lenders acted unlawfully due to undisclosed commission payments to car dealers. The FCA aims to establish an industry-wide scheme to ensure fair, consistent, and efficient compensation for consumers, potentially covering agreements dating back to 2007. The consultation will address crucial aspects like the scope of the scheme, redress calculation methodology, and interest payments, aiming for a launch in 2026. The FCA also advises both firms to assess potential liabilities and consumers to complain directly without necessarily involving claims management companies.

One document details a compliance consultancy's offerings, including FCA authorisation, benchmark audits, training, and tailored advice, highlighting their expertise in helping businesses navigate complex financial regulations and avoid penalties. The second source, a policy statement from the Financial Conduct Authority (FCA), announces new, more flexible rules for mortgage advice, affordability assessments, and remortgaging, aiming to simplify processes for consumers while maintaining protection under the Consumer Duty. This FCA document also addresses feedback from various stakeholders and explains the rationale behind retiring certain non-Handbook guidance, ensuring firms continue to treat customers fairly, particularly those with expired mortgage terms.

The Financial Conduct Authority (FCA) has published a revised Enforcement Guide (ENFG) and associatedinstruments, which come into effect on 3 June 2025. This revision incorporates feedback on earlier proposals and aims to provide greater transparency regarding enforcement investigations. Key changes include a revised publicity policy for investigations, specific approaches to investigating unauthorised activity and individuals, and clarifications on the use of various statutory powers. The revised guide is abbreviated to ENFG and replaces the previous version.

In this episode, we dive into the UK Government’s official response to its consultation on Buy-Now, Pay-Later (BNPL) regulation—marking a pivotal shift in how short-term interest-free credit is governed.

🎯 What’s Changing?

The Treasury’s 2025 consultation confirms that BNPL agreements offered by third-party lenders will come under formal regulation. In contrast, merchant-provided BNPL will stay exempt for now under Article 60F(2) of the RAO, though this may change if consumer harm escalates.

🔍 Key Takeaways:

• Third-party BNPL to be regulated: These providers must now seek FCA authorisation and comply with tailored rules being developed.

• Merchant-provided BNPL still unregulated: Despite concerns over a two-tier market, the government sees limited current harm here but will monitor it closely.

• Consumer Credit Act exemptions: Traditional CCA disclosure obligations will not apply. Instead, the FCA will design a more effective rules-based disclosure regime.

• Section 75 protections apply: Consumers will benefit from robust purchase protection, even under BNPL arrangements.

• Affordability checks and consumer duty: FCA’s principles-based oversight and rules on arrears and forbearance will cover BNPL agreements, supported by access to FOS and Breathing Space.

• Financial promotions tighten: Merchants must have their BNPL promotions approved by authorised firms; TPR (Temporary Permissions Regime) firms can approve their own.

• Time orders and debtor protections retained: Safeguards like court time orders and requirements after a debtor’s death remain in place.

📋 Implementation Timeline

The Statutory Instrument (SI) will be laid before Parliament in 2025. The FCA will consult and finalise rules within 12 months. The new BNPL regime is expected to be live by mid-2026.

🏢 For Firms: Be Ready

From affordability assessments to compliant disclosure and governance, the transition to regulation demands preparation. Compliance Consultant offers FCA authorisation support, training, audits, and a 25% discount until September 2025 for BNPL firms.

🛡️ Let’s ensure your firm is ready for the regulatory frontier.

📞 Book a Discovery Call now: https://bit.ly/CCDiscovr

#Hashtags:
#BNPLRegulation #ConsumerCredit #FCAAuthorisation #UKFinance #BuyNowPayLater #ComplianceConsultant #FCAUK #FinancialServices #RegulatoryChange #ConsumerDuty #CreditCompliance #MakingComplianceWork

In this in-depth episode, we break down the FCA’s latest consultation paper, CP25/14, on the proposed regulatory framework for the issuance of qualifying stablecoins and custody of qualifying cryptoassets in the UK.

From consumer protection to market integrity, the FCA’s goal is clear: make stablecoins function like trusted, money-like instruments while setting robust guardrails for those safeguarding cryptoassets.

Key Highlights:

🔹 Stablecoins Must Be Fully Backed: The FCA proposes that all qualifying stablecoins must be 1:1 backed by assets, with a statutory trust imposed over backing assets. This ensures enhanced security for holders and robust liquidity safeguards.

🔹 Redemption at Par, No Interest Pass-Through: Issuers must redeem at par (face value) and are barred from distributing interest on backing assets—ensuring these coins don't masquerade as investment products.

🔹 Dual Regulation for Systemic Issuers: Stablecoins deemed systemic will be jointly regulated by the FCA and Bank of England, with the Payment Systems Regulator also playing a role.

🔹 Custody Rules Under CASS 17: Any UK-based firm (or firm servicing UK clients) offering custody of qualifying cryptoassets must hold assets under a non-statutory trust and implement clear governance, selection, and oversight frameworks for third-party custody providers.

🔹 Expanded Backing Assets? Prepare for the BACR: Issuers using a broader range of backing assets (e.g. MMFs, longer-term debt) must calculate and maintain a minimum ratio of core assets through the Backing Asset Composition Ratio—based on peak redemption forecasts.

🔹 Strict Redemption Timing: All redemption requests must be fulfilled by T+1 (next business day), unless prohibited by law or if the customer requests an alternate currency.

🔹 Consumer Duty Considerations: While CP25/14 contains its own set of obligations, the broader application of the FCA Consumer Duty to crypto markets is expected in future consultations.

🔹 Third-Party Contracts & Acknowledgements: Issuers using outsourced services must maintain responsibility for redemption, communications, and compliance, with formal trust acknowledgement letters from third-party asset holders.

The FCA is pushing for proactive, proportionate regulation—focusing supervisory efforts on firms posing the greatest risk, while supporting innovation and clarity in an evolving market.

📌 Why it matters: With most UK consumers currently using overseas crypto custodians, the FCA's move is both protective and pre-emptive—aimed at setting global standards while safeguarding the UK’s digital asset space.

💼 How We Help: At Compliance Consultant, we guide firms through FCA authorisations, crypto registration, governance reviews, wind-down plans, and tailored training, ensuring you're never caught off guard.

🎙️ Tune in to hear what these changes mean for your business—and how to stay ahead of the compliance curve.

📅 Book a Discovery Call now: [https://bit.ly/CCDiscovr](https://bit.ly/CCDiscovr)

The Financial Conduct Authority (FCA) recently conducted a multi-firm review examining how retail banks and building societies manage customers in vulnerable circumstances, particularly those dealing with bereavement and Power of Attorney (PoA). This review forms part of the FCA’s Consumer Duty, which requires firms to deliver positive outcomes for all customers, including those facing vulnerable situations. The review assessed customer outcomes, governance structures, staff training, management information (MI), and outcome testing within financial institutions.

The findings are particularly relevant to retail banks, building societies, and possibly some payment and electronic money institutions. Along with the new insights, the FCA also drew on lessons from its previous review of life insurers’ bereavement claims processes, encouraging banks to apply these best practices to their own operations. The central message is that the measurement, monitoring, and delivery of good customer outcomes are vital to ensuring the fair treatment of vulnerable customers.

Key FCA guidance referenced in the review includes the Consumer Duty (Principle 12 and PRIN 2A), which mandates that firms act in the best interests of vulnerable customers throughout their entire customer journey. The FCA also highlights the Vulnerability Guidance (FG21/1), which outlines expectations for the fair treatment of vulnerable customers. Additionally, PRIN 2A.6.5R and PRIN 2A.7.4G specifically require firms to provide equal support to those authorised to act on behalf of retail customers, such as individuals holding a PoA, and to ensure systems are in place to identify and respond to customer needs.

Several positive practices were identified during the review, including the development of clear policies and procedures for vulnerable customers, which include specific guidelines for processing bereavement and PoA cases. Some firms had implemented systems that enabled staff to easily access customer needs, ensuring a more consistent and empathetic experience. Other firms proactively identified customers at risk of vulnerability using data analytics, such as transaction patterns, to better tailor their responses.

Staff training was also highlighted as a critical area. The review found that many firms used artificial intelligence (AI), such as speech analytics, to identify potential signs of vulnerability in real time. This allowed staff to adjust their approach and provide appropriate support during customer interactions. Outcome monitoring was another strong point, with firms tracking metrics such as time to register PoAs, account closures in bereavement cases, complaints, and customer satisfaction scores. This data-driven approach is key to measuring whether vulnerable customers are receiving adequate support.

However, the review also identified areas requiring improvement. Some firms struggled with unclear guidance during emergencies, such as when a customer’s capacity changed unexpectedly. This lack of clarity sometimes led to delays or unnecessary distress for customers. The FCA recommends that firms ensure their policies are accessible, clearly define escalation processes, and maintain flexible solutions to handle complex cases.

The FCA’s findings indicate that firms must focus on enhancing their systems, staff training, and customer journey management to meet the regulatory expectations of the Consumer Duty. Firms should take these insights seriously and implement changes that ensure the fair treatment of vulnerable customers.

Struggling to keep your financial services firm on the right side of the rules? You're not alone! Navigating the FCA's regulations, especially when it comes to looking after vulnerable customers, can feel like a proper minefield. That's where Compliance Consultant come in handy, acting as your trusty guide through the regulatory landscape.

Think of it as having an expert in your corner, making sure you're not just ticking boxes, but actually doing right by your customers, especially those who might be a bit more susceptible to harm if things go wrong.

Now, there's a firm called Compliance Consultant who are right up to speed on all this. They're experts in FCA compliance and can give you a proper leg up in staying compliant while still running a successful business. They can help new firms get their FCA authorisations sorted, give your current compliance a good going over with benchmark audits, and even get your staff trained up so they know their stuff when it comes to regulations. They also offer ongoing proactive compliance advice to help you dodge any potential pitfalls.

When it comes to vulnerable customers, Compliance Consultant can really help you get your ducks in a row. They can assist in developing strong policies, putting in place effective ways to identify and support those who need it, and making absolutely sure you're meeting the FCA's guidelines, especially the Consumer Duty. This is really crucial these days, as the FCA is keeping a close eye on how firms treat vulnerable consumers. They can even run thorough compliance audits to check everything's up to scratch and provide tailored training for your staff on how to best support vulnerable individuals.

With the Consumer Duty now in full swing since 2023, it's more important than ever to be proactive in understanding and addressing the needs of vulnerable customers, making sure they get outcomes as good as everyone else. Compliance services like those from Compliance Consultant can be a real lifeline in achieving this. They properly understand the FCA's definition of a vulnerable consumer – someone "especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care”.

And here's a bit of good news: Compliance Consultant is offering a 25% discount on all their services for 2025 to celebrate their 25th anniversary, plus some extra bonuses. You can find out more on their website (https://complianceconsultant.org), drop them an email ([email protected]), or give them a ring (0800 689 0190 in the UK).

One of their clients even said they "transformed our approach to regulatory compliance", highlighting their expertise and personal touch.

The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) has released its 2023-2024 report, shedding light on significant concerns about the effectiveness of Anti-Money Laundering (AML) supervision within the legal and accountancy sectors.

The report highlights the need for stronger, more consistent supervision to mitigate the risk of money laundering and financial crime. Despite compliance with the Money Laundering Regulations (MLRs) by most Professional Body Supervisors (PBSs), effectiveness is varied, with none achieving full success in all assessed areas.

A key issue noted in the report is the inconsistent application of a risk-based approach (RBA) by PBSs. Many struggle to identify and mitigate risks, particularly in categorising clients. 56% of supervised populations are classified as low-risk, with the legal sector showing 87% of members as low-risk. This raises serious questions about the accuracy and validity of these risk profiles. Moreover, some PBSs have failed to consider high-risk factors, such as Trust and Company Service Providers (TCSPs), and rely on unvalidated self-declarations for categorisation, which weakens their approach.

Supervisory practices themselves are under scrutiny. OPBAS has observed deficiencies in methodology, with a lack of consistency in implementing desk-based reviews and on-site inspections. Some PBSs outsource their AML inspections, but the oversight of these contractors is insufficient. As a result, PBSs are often unable to demonstrate how insights from outsourced inspections inform their risk-based approach. Furthermore, enforcement actions remain a weak area. There has been a decline in fines and suspensions despite increased findings of non-compliance, suggesting that enforcement is not being effectively utilised as a deterrent.

Inconsistent information sharing among PBSs is another issue, hindering progress in tackling financial crime. Despite engagement in forums like the Anti-Money Laundering Supervisors Forum (AMLSF), the reluctance to use information-sharing gateways under Regulation 52 of the MLRs has been noted, particularly concerning live investigations. The report also highlights sub-sector-specific issues, including weak supervision in conveyancing, bookkeepers, and advocates.

OPBAS has identified a need for more effective collaboration between PBSs, law enforcement, and other stakeholders. Key priorities for improvement include facilitating better information sharing, strengthening the AML supervisory regime, and enhancing the application of enforcement actions. By addressing these weaknesses and inconsistencies, OPBAS aims to ensure more effective AML supervision in the UK, helping to reduce the risk of money laundering and protect the global reputation of the UK economy.

Compliance Consultant offers financial regulatory compliance guidance, including FCA authorisation and risk management. Founded in 2000, Compliance Consultant has provided tailored solutions to firms of all sizes. You can reach us by:Visiting our website:https://complianceconsultant.org.Emailing us at[email protected].Calling us in the UK at 0800 689 0190.Scheduling a call directly at:https://bit.ly/CCDiscovr.

The Financial Conduct Authority (FCA) plays a pivotal role in regulating the UK’s financial services. Its primary responsibility is ensuring consumer protection, fostering market integrity, and promoting competition within the financial sector.

The FCA achieves these goals by setting clear, comprehensive rules that govern how firms manage risks, treat customers, and maintain transparency in their operations. For FCA-regulated firms, adhering to these guidelines is essential not only to comply with legal requirements but to build a strong, ethical business model.

The core components of an effective FCA compliance framework are multifaceted. First and foremost is the role of governance and oversight, where clear lines of authority must be established, ensuring that the board of directors is accountable for maintaining strong controls. Additionally, a comprehensive risk management strategy is necessary to identify and mitigate operational, financial, and regulatory risks proactively. These efforts must be complemented by consistent compliance monitoring—regular checks and audits to ensure compliance status and adherence to the FCA Handbook.

Another critical element of a robust FCA compliance framework is staff training and competence. Employees must be well-informed about regulations, policies, and ethical standards relevant to their roles. Ongoing training ensures that everyone within the organisation, from senior managers to entry-level employees, understands the importance of compliance and how to uphold it in their daily work. Further, maintaining a focus on customer outcomes is vital; firms must ensure that customers are treated fairly, prioritising their interests in all business dealings. This is central to Consumer Duty, an FCA mandate requiring firms to deliver good outcomes through transparent communication and fair treatment.

To effectively implement the FCA compliance framework, firms should start with a comprehensive audit of existing policies to identify any compliance gaps. This process should be followed by a risk assessment, where firms can evaluate vulnerabilities using tools like SWOT analysis or risk matrices. From here, organisations can develop a compliance strategy with specific, measurable, achievable, relevant, and time-bound (SMART) objectives. Policy development is equally important, as it ensures that all employees understand their roles in complying with FCA regulations, while monitoring and reporting systems should be established to track ongoing compliance and issues.

An ongoing challenge for firms is maintaining a compliance culture that permeates the organisation. It is vital to foster leadership support and secure buy-in from all levels to ensure that compliance is viewed as integral to business success rather than a burdensome task. By establishing clear accountability frameworks, firms can continuously improve compliance efforts.

Visiting our website: https://complianceconsultant.org.

Emailing us at [email protected].

Calling us in the UK at 0800 689 0190.

Scheduling a call directly at: https://bit.ly/CCDiscovr.