UK FCA Issues New Guidance for Electronic Financial Services
On August 1, the UK’s Financial Conduct Authority (FCA) published new a consultation paper for electronic payment service providers and e-money issuers. The paper outlines the different standards of conduct for firms regulated by the Financial Services and Markets Act of 2000 (FSMA), and those not subject to the regulation.
The paper outlines guidance on equalising the standards for FSMA and non-FSMA companies, which deal with “any provision of payment services and issuance of e-money”. The principles outlined in the paper include: Integrity; Skill, care and diligence; Management and control; Financial prudence; Market conduct; Customers' interests; Communications with clients; Conflicts of interest; Customers: relationships of trust; Clients' assets; Relations with regulators. Broadly, they are aimed at ensuring that fintech companies communicate with their customers in a clear and concise way, particularly around hidden costs for currency conversion.
Coupled with GDPR, this guidance and any upcoming regulation on the matter will mean that electronic financial services will need to examine and potentially update their user interfaces to include clear and understandable messaging around terms and conditions.
The consultation paper can be read in full here.