STOP PRESS: In September 2024, the Financial Conduct Authority (FCA) announced a consultation on proposed rule changes to strengthen safeguarding practices for payments and e-money firms. ‘CP24/20: Changes to the safeguarding regime for payments and e-money firms’ sets out proposed new rules which aim to better protect customers in the event of business failure, ensuring swift return of funds. This move addresses growing concerns over poor safeguarding practices in the rapidly expanding payments and e-money sector. Responses were sought by 14 December 2024 (see: LNB News 25/09/2024 28 and News Analysis: FCA’s broad proposals aim to protect customer funds).

Ipagoo ruled that the Electronic Money Regulations 2011 (EMRs 2011), SI 2011/99 do not create a statutory trust over relevant funds; instead, they create a special type of priority interest for clients in the event of insolvency. These principles were applied to safeguarding under the Payment Services Regulations 2017 (PSRs 2017), SI 2017/752 by the Allied Wallet case. The FCA says this approach results in uncertainty, as, unlike a trust, the legal