A new special administration regime is being introduced in the UK for insolvent payment institutions (PIs) and electronic money institutions (EMIs).
The key purposes of the Regulations are to ensure that in the event of an institution’s insolvency (a) funds are returned to customers quickly and (b) shortfalls in the amounts returned are minimised. Since 2018, six PIs and EMIs have entered insolvency but only one has returned customer funds.
The Regulations are therefore considered necessary to give certainty to those looking after insolvent institutions (the special administrators) and to avoid having to go to court for further directions and so expedite returning customer funds. Full details here.