Information on enforcement action VREQs / OIREQs / s.166 reviews - November 2024

Enforcement Operations

Own-initiative action (“OIREQ” or “OIVOP”)

Voluntary requirement (VREQ)

s166

Please note that the information provided with respect to payments and e-money firms may differ slightly from information published or provided under FOIA in the past as the organisation has been working to improve the way it records data against firms.

We note that you have requested specificity for each of the above actions as to the “types of VREQs and OIREQs the FCA has used”. Please note that:

• the data relating to own-initiative actions relates to those instances where the FCA has imposed requirements on a payments or electronic money firm’s authorisation (commonly referred to as an “OIREQ”), but may also include instances where the FCA has varied a firm’s authorisation by removing a payments service (or e-money service, as applicable) from those which the firm was granted authorisation (commonly referred to as an “OIVOP”);
• The FCA may impose a requirement on a payment services or e-money firm to require the firm to take a specified action or, alternatively, to refrain from taking a specified action. When exercising these powers, the FCA will need to satisfy itself that any restriction imposed is proportionate to the objectives the FCA is seeking to achieve. The FCA will also often impose several requirements on a firm’s authorisation as part of the same action. By way of example, the FCA has previously imposed requirements on a firm for it to cease carrying out any payment services without the FCA’s prior written consent, cease to register or onboard any new customers (including any that might be introduced via an agent or third party), ensure that all relevant funds are appropriately safeguarded, notify customers of the imposition of the requirements and to retain records. The FCA has also taken action to require a firm to pay all liabilities owed to existing payment service users of the firm or otherwise to impose a requirement to limit a firm’s ability to use its own assets. Although these are not an exhaustive list of the types of requirements the FCA can impose on a payment services or e-money firm, they do represent a range of requirements the FCA does use to mitigate ongoing risk and advance its operational objectives.

We do not hold this information in respect of crypto asset firms. This is because these powers apply to our supervisory regime under the Financial Services and Markets Act 2000 (FSMA) while most cryptoassets are not specified investments under FSMA. Cryptoasset businesses need to be registered with the FCA under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (“MLRs”), which include the following additional powers for the FCA to maintain a robust anti-money laundering and counter-terrorist financing cryptoasset supervisory regime.

• Skilled Person Review – Regulation 74B of the MLRs permits the FCA to appoint, or require the cryptoasset business to appoint, a skilled person to prepare a report for the FCA concerning a matter under the MLRs.
• Power of Direction - Regulation 74C of the MLRs permits the FCA to give a direction (which is similar to the requirement power under section 55L(3) of FSMA) to a business before, on or after registration to a business for the purpose of:
• Remedying a failure to comply with the MLRs;
• Preventing a failure to comply or continued non-compliance under the MLRs, or;
• Preventing the business from being used for ML/TF.

This power of direction allows us to require or prohibit certain action.

More information can be found on our website here[1].

With the above in mind, we can consider a request for this information in respect of cryptoasset firms. If you wish us to proceed on this basis, please let us know in writing and we will process this as a new request in line with the provisions of FOIA.