Assessment and remediation of the client monies safeguarding arrangements at a UK EMI.
Payment Services & Card/ Merchant Acquirers
UK Credit Card Provider regulated as a UK EMI and operating fiat-to-digital transfers in conjunction with a UK-registered digital assets firm.
The incoming Head of Compliance at our customer (a UK EMI) identified that Client Monies were not being managed as per regulation and therefore required an immediate remediation.
Lysis Team - Lysis deployed a small, senior team of CASS and Client Monies specialists who had previously held SMF18 (CASS/Client Monies) responsibility in regulated firms.
Investigation - Lysis reviewed the firm's operating model, including a partnership with a digital assets firm offering both fiat and crypto wallet capabilities and conducted an investigation to assess current safeguarding arrangements and regulatory risks. Our finding was that the management of client monies across this service set was not correctly set up, leaving the client open to FCA censure.
Solution Design - Lysis defined the correct model for client money safeguarding including detailed account mapping, set up the necessary client money bank accounts and created a new accounting, reconciliation and reporting framework. Lysis then worked with the client to remediate the current situation to bring it in line with the required model.
The client was then able to demonstrate to the FCA that the issues were resolved and that client monies were correctly safeguarded.
A UK-based specialist bank that is primarily a specialist mortgage lender to retail clients. The bank also provides both small business and personal finance. They needed assitance to ensure that their new and exisiting client books comply with AML regulations.
A Norway-based crypto broker registered with the Norwegian Financial Authorities. The client had rapidly scaled its operations to meet growing demand in the crypto sector but faced increasing regulatory scrutiny from both national and European regulators.
A major bank with two major trading entities wished to decrease time-to-trade processing overheads for new customers and for new products for existing customers.
