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PPL now licenced by the Financial Conduct Authority

As part of our Virtual Wallet solution for direct payments & personal budgets, PPL holds substantial sums of money on behalf of our customers in our client bank accounts.

As a result, we developed robust internal processes and controls to ensure that these funds are properly managed. However, it has always seemed odd that organisations holding or processing direct payments & personal budgets like ourselves are often not formally regulated in the same way that other organisations that hold or process client funds are. 

Following initial discussions with our long-standing banking partner, we subsequently took advice from a number of professionals within the financial services and payments sector, concluding that we should seek a licence from the Financial Conduct Authority (FCA), which is the UK regulator for the financial services sector.   The application process was extremely robust, with the FCA reviewing our:

  • Operating model, accounting processes and relationship with our banking partner;
  • Wider business plan;
  • Financial crime policies and processes;
  • Risk policies and risk register;
  • Background information about our shareholders, board & management team;
  • Financial accounts, forecasts and financial standing;
  • Contingency plans and wind-down plans.

We submitted over 90 individual documents and met with representatives of the FCA on several occasions.  In order to meet the FCA’s strict criteria, we have had to make changes to the composition of our board of directors, restructure parts of our balance sheet, make changes to our banking arrangements, amend some of our policies & procedures, commit to additional annual audits and appoint a nominated ‘Money Laundering Reporting Officer’.

We are delighted to confirm that we have now received our formal licence from the FCA, which provides our customers with the assurance that we are meeting the very highest standards in accounting for and managing the client funds that we hold. 

A wider question is whether other organisations that are processing or holding direct payments & personal budgets should also be regulated by the FCA, another body or not at all.  We will be publishing an article on this shortly, but if you have any comments or questions in the meantime, please get in touch.