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 crypto asset custodian based in the U.K. with global reach approached Lysis with the request to assist them with the process to obtain registration from the FCA which would enable them to operate in the UK market as a crypto asset business. Due to the holding company’s strong global footprint, part of the FCA requirements for registration included the need for a UK based money laundering reporting officer (MLRO).
A prominent security services firm that forms part of a French multinational investment bank and financial services company asked Lysis to assist with the securities/back-office function within the multinational investment bank.
A major global bank, following a merger, had two global trading brands operating across 60+ countries globally.
