Financial Conduct Authority in UK have been imposed requirements on Wirecard’s authorisation

The UK’s Financial Conduct Authority has ordered Wirecard UK to cease all regulated activity after the parent company filed for insolvency in Germany, according to a press release.

Wirecard Card Solutions Limited (FRN 900051) is authorised and supervised by the FCA to issue e-money and provide payment services including, issuing e-money onto prepaid cards.

On 26 June 2020, the FCA imposed a number of requirements on Wirecard including, that the firm:

. must not dispose of any assets or funds

. must not carry on any regulated activities

. must set out a statement on its website and communicate to customers that it is no longer permitted to conduct any regulated activities.

This follows publication to the FCA’s Register of a number of requirements which have been applied to Wirecard’s authorisation from 19 June 2020. The full requirements have been published to the FCA Register.

There are ongoing events in Germany concerning companies closely linked to Wirecard. Wirecard’s parent company, Wirecard AG based in Germany is currently the subject of law enforcement interest and insolvency proceedings. Wirecard AG is not supervised by the FCA.

Why did the FCA take this action now?

The FCA is the UK’s designated competent authority, responsible for granting firms based in the UK, permissions to undertake e-money activities and payment services and, it is within the FCA’s power to take supervisory action in certain cases to protect the interests of a firm’s customers.

Under the EMRs, the FCA may impose such requirements as it considers appropriate which may require a firm to (a) take a specified action; or (b) refrain from taking a specified action. These types of requirements are known as ‘Own Initiative Requirements (OIREQ)’.

„Our primary objective is to protect the interests and money of consumers who use Wirecard. Following last week’s news of €1.9 billion missing from the accounts of the German company, Wirecard, we immediately placed requirements on the firm’s UK business so that it should not pay out or reduce any money it holds for its customers except on their instructions. We have been working closely with Wirecard UK and other authorities over the past few days to take action that protects consumers. We are continuing to do this and on 26 June, we took additional measures to require the firm to cease all regulated activities in order to further protect customer money. This now means customers money cannot be accessed.„, FCA said in the statement.