In light of the impact of Covid-19 on firms’ business models, we are providing this finalised guidance to strengthen firms’ prudential risk management and arrangements for safeguarding customers’ funds in this period of economic stress.
This finalised guidance follows the consultation paper we published on 22 May 2020 about coronavirus and safeguarding customers’ funds. The consultation closed on 12 June 2020. We received responses from more than 60 organisations, including payment firms, trade associations and law firms.
Why we are publishing this guidance
Guidance for firms on safeguarding and managing prudential risk is already available in our payment services approach document. However, we have found evidence from our reviews of firms that some firms are not complying with the regulations as we expect. Our guidance will clarify ways that firms can comply with the regulations, and help prevent potential harm to their customers in the event of insolvency during the Covid-19 pandemic.
Who this applies to
This guidance applies to authorised:
- payment institutions or small payment institutions
- e-money institutions or small e-money institutions
- credit institutions and custodians
Next steps
We hope to conduct a full consultation later in 2020/21 on changes to our approach document. This is likely to propose incorporating this additional guidance on safeguarding and prudential risk management. This will give stakeholders a second opportunity to comment on any measures that we propose to apply permanently, building on this temporary guidance.