The Financial Conduct Authority (FCA) has just informed the public that it is consulting on rules and guidance to improve conduct standards and communications in the payment services and e-money sectors.
The Consultation Paper proposes to extend the application of the Principles for Businesses and certain specific rules about promotions and communications so that they cover wider categories of businesses that we regulate (including businesses authorised or registered under the Payment Services Regulations or the Electronic Money Regulations). This includes broader types of activities (including the provision of payment services and the issuing of electronic money where they are not connected to an activity regulated under the Financial Services and Markets Act (FSMA)).
These proposals follow modifications to the FCA’s rule-making powers in 2017, which brought certain businesses authorised or registered under the Payment Services Regulations or the Electronic Money Regulations within their scope alongside businesses authorised under FSMA.
The FCA has also proposed new guidance to help ensure that firms do not mislead consumers when they are advertising payment services that involve a currency conversion. This delivers on a commitment by the FCA made last year, to act on concerns about firms’ use of currency converter tools in relation to their currency transfer services.
These measures should help customers to better understand that standards the FCA expects of firms in the market, and will make it easier for the FCA to intervene when it sees harm. The FCA’s disciplinary powers under FSMA would apply to breaches of the proposed new rules, including those relating to marketing and communications, and this would reinforce the effectiveness of the FCA’s enforcement approach across the markets for payment services and electronic money.
Christopher Woolard, FCA
Christopher Woolard, Executive Director of Strategy and Competition at the FCA said:
This is a measured intervention – for many it will simply reflect current good practice and ensure that they are subject to the fundamental obligations that we expect of regulated firms.
For some, however, it should be a clear signal that through our rules, supervisory and enforcement action, we will not tolerate customers being misled or being treated unfairly.
The FCA has informed that it is now seeking comments on the proposals set out in this Consultation paper, which closes on the 1 November 2018.