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 newly established digital bank required full regulatory permissions to operate as a licensed bank in the UK and to ensure compliance with EU PSD2 regulations.
A European investment bank had a surge in hits from screening and on-going monitoring in relation to PEPs, sanctions and adverse media monitoring.
Our client had a requirement to review and update its AML Framework to take account of the Fifth Money Laundering Directive and also some changes in its business model.
