FSA to regulate money transfer industry


The Financial Services Authority is set to become the regulator for the money transfer market from November 2009.

All companies involved in money transfers will be required to register with the FSA and companies transferring in excess of €3m will need to seek authorisation from the FSA.

Money transfer firms will be subject to rigorous financial scrutiny on application and will have to adhere to the FSA’s conduct of business’ rules pertaining to fair treatment of customers and controls and safeguards. The FSA will also conduct fit and proper’ tests on owners and directors.

Firms set up after December 2007 will not have to register with the FSA until April 2011, but will be subject to FSA conduct of business rules from November 2009, allowing consumers to address any complaints to the Financial Ombudsman.

Jon Beddell, md at TorFX welcomed the news: “We are delighted that the currency transfer market will now come under the FSA’s regulatory umbrella. This can only help both customers and the industry as a whole. Customers deserve to know that they are dealing with companies that have passed the strict FSA scrutiny that will be applied, as well as being able to transact in the knowledge that they have recourse to the Financial Ombudsman if they are not treated fairly.”

How to choose a reliable money transfer company:

1) Always check that your money is held in a segregated client account, separate and identifiable from company funds.

2) Only deal with a well-established company. How long have they been trading? Have they won any industry awards or been recommended in the financial press? Ask how many staff are employed. Larger companies are more likely to have proper controls in place.

3) If you can, check the company’s credit rating. Many smaller firms have no rating at all, or only have a low rating.

Source: TorFX www.torfx.com

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