FCA proposes new guidelines to keep up cheap entry to money

The UK Monetary Conduct Authority (FCA) has proposed new guidelines to keep up cheap entry to money for private and enterprise clients throughout the UK. This follows new powers granted to the FCA by the Monetary Companies and Markets Act 2023.

Underneath the FCA’s proposals, designated banks and constructing societies might want to assess gaps in entry to money. These assessments have to bear in mind native elements akin to demographics and transport. The place corporations determine gaps, they might want to act to deal with these wants.

As of Q1 2023, 95.1% of the UK inhabitants are inside 1 mile of a free to make use of money withdrawal level, akin to money machines or Publish Workplace branches. 99.7% of the UK inhabitants are inside 3 miles. Nevertheless, the supply of money entry companies can affect native communities, economies and excessive streets, and so it’s vital to satisfy native wants – which can change over time.

Underneath the proposals, designated corporations can be required to:

  • Undertake money entry assessments when adjustments are being made to money entry companies – to grasp whether or not further companies are required to satisfy native gaps.
  • Reply to requests from native residents, neighborhood organisations and representatives to contemplate, assess and plug gaps.
  • Ship cheap extra money companies to fill gaps in provision the place assessments present that there’s or can be a major native hole.
  • Guarantee they don’t shut money amenities, together with financial institution branches, till any extra money companies recognized can be found.

The FCA’s new powers don’t stop financial institution branches from closing. Nevertheless, the foundations will have an effect the place branches are a key native supply of money. The FCA will guarantee these guidelines work in concord with its present steerage on financial institution department closures.

Present legislation permits retailers to determine whether or not to just accept money or not – so the FCA can’t require them to take action.

The session is open till 8 February. The FCA expects to finalise the foundations by Q3 of 2024.