Safety of your funds

Safety of funds

Currency UK is authorised by the Financial Conduct Authority as an Authorised Payment Institution (“API”). We are therefore required to safeguard client monies by holding those monies in a segregated client account, separate from our business accounts. These accounts are designated as client accounts and protected in the event of our insolvency or the insolvency of the banks we use to hold the client funds.

Currency UK’s safeguarding obligations are summarised on the FCA website: https://www.fca.org.uk/consumers/using-payment-service-providers

Safeguarding is the obligation to identify and keep client monies segregated and protected from all other funds that the business may hold. This obligation commences as soon as funds are identified as client monies (and stops when funds are remitted to the clients’ recipient).

The funds are no longer deemed relevant once the firm has remitted them to the recipient and can reasonably assume that the funds have reached the recipient’s bank account.

Funds that are not deemed relevant include the following:

  • Deposits for forward contracts, until they are released into the client’s payment account following the forward contract being settled.
  • Margin calls on forward contracts until they are released into the client’s payment account following the forward contract being settled.

If funds do not arrive within expected time frames a ‘trace’ can be placed by our Operations Team to track the progress of the payment. Payments can be delayed by banks and in extreme cases may be returned if the bank account details are deemed invalid. A trace is usually able to resolve any issue within a few days depending on the location of the beneficiary bank account and the reason for the delay, 

How would our clients get their money back if Currency UK were to go out of business? 

In the event of the firm going out of business, a liquidator would be appointed to handle the distribution of the firm’s assets. The client accounts have processes designed to ensure that on a daily basis, the value and identification of client funds is calculated and checked against actual cash held. The liquidator would use the records to ensure that all client funds are returned to the underlying clients as a priority to all other creditors (other than in respect of the costs associated with the liquidation which if they exceed any funds held for the business may mean the liquidator can recover their costs from client funds).

Are Currency UK clients covered under the FSCS?

No – As an API firm, we are not in scope of the FSCS, which has a cap of coverage of £85,000. An API firm, however, is required to safeguard the entire value of relevant client funds, even where this is above £85,000, so is not subject to a cap. Subject to any insolvency costs, clients may get most, if not all, of their money back

How does an API differ from a bank?

An API Firm in the UK is authorised by the FCA. A Bank is regulated by the FCA and PRA.

Under the FCA rules and guidance, a bank’s client money rules are governed by the Client Assets Sourcebook (CASS) regime. An API firm’s client money rules are governed by the safeguarding rules outlined in the FCA’s Approach document which can be found here https://www.fca.org.uk/consumers/using-payment-service-providers