In 2021, the UK's Financial Conduct Authority (FCA) published its Guidance for IPs on how to approach regulated firms.  Since then, there have been changes in the legal framework affecting firm failure, changes in the regulatory framework and changes in the economic climate.

The FCA is consulting on amendments to reflect these changes including:

• Introduction of the Consumer Duty: Changes have been made to the Guidance setting out the FCA’s expectation that IPs conduct the affairs of the firm in a way that is compatible with the needs and objectives of their customers.

• Financial Services Compensation Scheme (FSCS) protection: customers of an electronic money institution (EMI) or payments institution may receive FSCS protection in certain circumstances where the credit institution that holds their safeguarded funds fails. Guidance is given around the communication of this protection and when liaison with the FSCS is required. 

• Court of Appeal decision in the Ipagoo case: relevant funds held by an EMI (the ‘asset pool’) includes an amount equivalent to relevant funds that should have been safeguarded but were not. Where there is such a shortfall, IPs should ensure that the asset pool is topped-up.

Who this is for 

The proposed guidance is aimed at IPs appointed over firms solely authorised or registered by the FCA.  It may also be relevant for IPs appointed over firms that are dual regulated by the FCA and PRA. 

Next steps

Views on the consultation are sought by 30 April 2024 and the FCA intend to publish the finalised amended guidance later this year.