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What does the new FCA approach mean for e-money and payment firms? With Nigel Reed

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An Interview with Nigel Reed, COO Neopay Ltd

With the change in the FCA approach, many firms are nervous about applying for new authorisations due to uncertainty over the FCA’s new requirements and process. 

Nigel Reed, COO of Neopay Ltd, has personally supported over 100 firms in gaining authorisation from the FCA.  He has shared his insight and experience to assist firms considering applying to the FCA. 

Are firms right to be nervous when applying for a new FCA authorisation? 

NR: Well things are very different now and even for people with our experience it’s been difficult to work out what changes are due to backlogs and new staff at the FCA and what is actually a change in approach.  That said, as long as firms understand the changes and have realistic expectations and plans, they don’t need to be nervous. 

We’ve spent a lot of time reviewing and analysing what’s been happening with authorisations to help our clients be prepared and adapt their plans if necessary.  Your consultants should be able to work with you to develop a strategy and approach in line with how things are now. 

What are the most significant changes from your experience? 

NR: The timescales are causing the most problems – particularly for firms who submitted early on.  In the past we were getting authorisations through in 3-6 months from the date the project started.  Now firms need to expect it to take at least a year.  We have strategies to help firms with these timescales, so it’s important for firms to discuss things openly with us. 

Firms should also understand that the FCA is expecting far more information with the initial submission than in the past – there isn’t as much scope for submitting quickly and then supplying additional information on request. 

The other major change is the level of detail required by the FCA in some areas – firms who are already licenced elsewhere or who are changing their permissions need to be aware that their existing documentation is likely to need quite a lot of adaptation.  Obviously, we’re here to help with that.   

So, if a firm is authorised in the EU, it isn’t just a case of submitting a similar pack? 

NR: There’s always been differences between different EU jurisdictions so adaptations were required even before Brexit.  The FCA’s change in approach has meant this has increased – particularly in respect of their more recent guidance.  And they want to be seen to be more assertive, so these applications are still scrutinized thoroughly. 

The FCA are taking on a lot of new staff.  Is that having an impact? 

NR: It depends on which Case Officer you’re assigned and obviously that’s just the luck of the draw.  Consultants like Neopay can help you push back in the right way if you think your case officer has got something wrong.   

Some don’t have much experience of payments or e-money and some seem to be more used to dealing with firms that are already operating so some of their questions need careful handling. 

Are there differences in liaisons and meetings with the FCA? 

NR: The FCA don’t allow consultants to attend meetings anymore so it is important that firms are properly prepared – practice meetings with your consultants should help as well as making sure that all individuals at the meeting are aware of the aspects of the application the Case Officer is focusing on. Most importantly, be calm and confident, but also listen to what the Case Officer is saying and ask questions. 

Is there any benefit to firms waiting to submit their applications? 

NR: Not really.  With the timescales involved now, it’s better for firms to get things moving if they need authorisation.  The changes from the FCA approach aren’t likely to change in the short term. 

And at the moment, most consultancies haven’t increased their prices to reflect the additional work involved in supporting an application – I suspect these prices will need to increase fairly soon. 

Do you have any final words of wisdom for firms? 

NR: In the UK, we got used to a very efficient regulator.  Recently the process has become more time consuming, but the UK is still quicker and less onerous than most jurisdictions, including those in the EU. 

So, if you are thinking of authorisation from the FCA, find out what the timescales and process are likely to be and plan accordingly.  Obviously, we’re happy to talk to anyone who needs advice. 

 

To find out how we can support your business, contact us here.

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