Major announcements on the new Travel Rule for cryptoasset businesses, access to cash and the operation of the Politically Exposed Person’s regime catch the eye in this week’s roundup of activity by the FCA.
Enforcement
Expectations for how cryptoasset businesses need to comply with the new Travel Rule from September 1, 2023, were set out in a statement. Part 7A of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 was amended in July 2022, so cryptoasset businesses are required to collect, verify and share information about cryptoasset transfers.
The FCA’s expectations for firms include:
- taking all reasonable steps and exercising due diligence to comply;
- remaining responsible for compliance even when using third-party suppliers;
- ensuring full compliance when sending or receiving a cryptoasset transfer to a firm in the UK or in any jurisdiction that has implemented the Travel Rule;
- regular review of the status of the Travel Rule in other jurisdictions and adaptation of business processes as appropriate.
The Financial Action Task Force has called on other jurisdictions to implement the Travel Rule. The statement also set out expectation for dealing with transfers to and from jurisdictions not covered by the Travel Rule.
Input on guidance for compliance is being sought, with a deadline of August 25 for submissions.
Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017
Notice that Verex Insurance Services Limited has entered administration was published. The company’s assets have been acquired by Care Care Plan Limited.
Rules and Consultations
MPs, peers and other interested parties have been written to and invited to share their experiences of the Politically Exposed Persons (PEPs) regime. The regime derives from international standards issued by the Financial Action Task Force. This is a separate request from the recent request for data on account closures.
The review’s full terms of reference will be published in September, and the FCA will report back by next June.
The volume of cashless payments in the UK has risen to 85%, but following the Government’s Cash Policy Access Statement the FCA is keen to ensure reasonable provision of cash deposit and withdrawal services for personal and business current accounts in the UK or part of the UK.
It says it will “seek to maintain a network of cash access facilities that is in keeping with the current distribution of services so that people and businesses who remain reliant on cash are able to withdraw and deposit it” as part of a “balanced approach” that takes into account the needs of consumers and small businesses , and the costs of implementation.
The FCA’s statement outlined the approach it seeks to take and how it plans to consult on rules to assess the state of access to cash provision.
Financial Services and Markets act 2023
Speeches and media
The regulator released details of research showing the number of interest-only and part-interest-only mortgages in the UK has halved since 2015. Fewer than one million people now hold either product, and of those, 149,000 are set to mature in 2031 and 2032. “This means,” says the FCA, “borrowers without a repayment plan still have time to act and reduce at least some of their outstanding capital by the end of their mortgage”.
Consultation with industry and consumer groups is now under way to see how borrowers who may not be able to pay all the capital owed at the end of their mortgage term can be supported.