Helping you to obtain safeguarding accounts and meet regulatory obligations
Below we look at the requirements and procedure of obtaining a client fund safeguarding account for Payment Institutions (PIs) and Electronic Money Institutions (EMIs).
Safeguarding requirements for authorised PIs and EMIs
The Payment Service Regulations and Electronic Money Regulations require PIs and EMIs to protect the funds of their customers, received in the delivery of their payment service or e-money issuance.
In order to be granted an Authorised Payment Institution or Electronic Money Institution licence from a financial regulator, you must confirm and provide details of the credit institution with whom your client funds will be safeguarded. Without this, you will simply not be issued a licence.
Obtaining a client fund safeguarding account is a difficult and challenging process. Most banks simply do not provide this type of account despite PSD2 making it mandatory for banks to provide payment accounts on an objective, non-discriminatory and proportionate basis, in an unhindered and efficient manner. Others, especially high-street banks, simply have stringent and difficult criteria for most firms to meet.
How we can help
We have spent several years building a network of banks that are friendly, approachable and happy to work with Payment Institutions and Electronic Money Institutions in providing client-safeguarding accounts. Having a good understanding of each partner bank’s risk appetite and product offering enables us to find the most suitable options for our clients seeking to segregate client funds into a safeguarding account.
Each bank has its own criteria and fee structure. For example, some of our partner banks stipulate that PIs and EMIs must hold a minimum balance in their account. The fees that our partner banks charge will also vary, ranging from a few hundred pounds or euros per month to a couple of thousand pounds. Some banks will charge a fee to carry out their due diligence on the company and its shareholders but then charge a relatively low flat monthly fee. Others will not charge or charge a low fee to carry out the due diligence but will charge higher monthly fees.
When we work with you, we will recommend and apply to the most suitable banks, based on your business and risk profile.
Overview of our client funds segregation service:
- Help with obtaining client safeguarding accounts in Europe
- Advice on understanding which funds are relevant and must be safeguarded
- Risk management and oversight of customer funds
- Gap analysis on your current safeguarding arrangements
- Compliance audit with safeguarding requirements
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What our clients say
"Buckingham Capital Consulting has been a reliable and trusted partner. They spent time understanding our business, people and processes and worked closely with us throughout the process. They completed our licencing application to a high standard and in a timely and efficient manner. We were delighted with how smooth the entire process was from the application preparation and submission also with the case officer at the FCA. Buckingham Capital Consulting ensured that our licence was obtained in an efficient and smooth manner. The value and expertise they provide became obvious early on in the process. We highly recommend Buckingham Capital Consulting."