Regulatory returns and the importance of a timely submission

Author - Sayefuddin Rony, Payment Services Senior Associate

We all know, that for a payment services firm it is critical to stay compliant with the rules of the Financial Conduct Authority (FCA). One of the main ways to demonstrate being compliant is by submitting accurate and timely regulatory returns. The FCA's RegData system is the primary method for firms to submit their returns and it is essential for firms to understand the importance of using this system.

By submitting these periodic reports to the FCA, firms are providing information on their operations, activities, and financial performance, thus allowing the FCA to assess the health of the firm and its adherence to its rules.

Whilst all payment services firms understand the importance of submitting such returns, not all manage to submit them in time, whether due to resource, time or simple oversight.  However, submitting late returns to the FCA can have significant risks for a payment services firm, such as:

• Financial Penalties: Late submissions can result in fines and penalties imposed by the FCA. These fines can be substantial and could have a significant impact on a firm's bottom line.
• Reputational Damage: Late submissions can damage a firm's reputation and credibility in the eyes of the FCA and other regulators.
• Regulatory Enforcement Action: The FCA has the power to take enforcement action against firms that do not submit their returns on time. This can include suspension or revocation of a payment firm’s authorisation to operate.
• Increased Scrutiny: Late submissions can trigger increased scrutiny from the FCA, which can lead to more frequent supervisory reviews. This can be time-consuming and disruptive to a firm's operations.
• Increased Risk: Late submissions can prevent the FCA from obtaining timely and accurate information about a firm's operations, activities, and financial performance, limiting its ability to identify potential risks.

In short, submitting late returns to the FCA can have serious consequences for payment services firms. It is important therefore that your firm understands, the associated risks and ensures that your returns are submitted on time. By taking steps to avoid late submissions, your firm can protect its reputation, financial stability, and regulatory compliance.

Insight from the team

“Payments services firms go through a lot of hurdles and spend a lot of time and resource to get registered or authorised by the FCA. It is very easy for the firm to forget or miss the reporting deadline but it can be very costly for the firm, as being non-compliant can lead to different regulatory reciprocation. I believe payment services firms can put little resources to be compliant with their reporting which will help them stay in the good books of the FCA.” - Sayefuddin Rony, Payment Services Senior Associate

How can we help you?

Thistle Initiatives has supported firms for over 10 years as a trusted compliance and regulatory advisor. In addition to assisting you as and when our team of specialists can serve as your right hand in a meeting and complying with regulations. We understand the importance of staying up-to-date and compliant and are dedicated to providing the guidance and support needed to do so.

From start-ups to established businesses, at Thistle Initiatives we support payment service and e-money providers with a smooth journey to payment services compliance. Our expert team support a number of client firms with submission of their regulatory returns, ensuring that these are processed quickly and efficiently.  By helping to validate the information prior to submission, we can help our clients ensure that their regulatory returns are complete and accurate, reducing the risk of errors and helping to avoid costly and time-consuming rework.

Has anything discussed in the article raised questions you want answered? Contact our specialist payment services team now to schedule a free consultation. Get in touch with us by calling 0207 436 0630 or sending an email to info@thistleinitiatives.co.uk.