The United Kingdom’s Financial Conduct Authority (FCA) has appointed two people to serve as special administrators over Xpress Money Services after courts issued a special administrative order. David Hudson and Philip Reynolds of FRP Advisory have been appointed as joint special administrators. Xpress is an FCA-authorized payments institution under the Payments Services Regulations 2017.
On Feb. 11, a special administration order was made under the Payment and Electronic Money Institution Insolvency Regulations 2021. Special administration is intended to facilitate the return of customer funds as soon as possible.
“The application for the special administration was made by the FCA in response to a winding-up petition brought against the firm, to help ensure better outcomes for affected customers,” the agency said in a statement. “Xpress’s joint special administrators are responsible for managing claims against the firm and returning funds to customers where possible. Customers should receive more information from them, including details on how to make a claim, within eight weeks of appointment.”
“Customers should contact the joint special administrators at FRP Advisory with any concerns,” the FCA said. “Their website contains frequently asked questions (FAQs) and you can contact them directly by email or telephone.”
The Payment and Electronic Money Institution Insolvency Regulations 2021 introduced a new special administration regime for payment and e-money institutions. A special administration is similar to an ordinary administration however, to the special administrators have an additional objective of returning customer funds as soon as reasonably practicable, the FCA explained.
The special administrators will gather as much information as possible from creditors and customers of Xpress about payments made to, or owed by, Xpress. Customers who believe they are owed money by the firm should contact the special administrators
Funds customers placed with Xpress are not protected by the Financial Services Compensation Scheme, the FCA said. That regulation applies to certain types of activity but does not include payment services. Under the PSRs, there are requirements on how customers’ money should be protected and these requirements are known as “safeguarding”.
When Xpress provided regulated payment services activities it was required to hold money separately for those customers, the FCA explained. These safeguarding requirements apply to Xpress and the firm must comply with them at all times.
Coming up, the special administrators will carry out an assessment of all the customer funds held by the firm to confirm the current position.
Xpress is not currently providing payment services. In June 2020, requirements were imposed on Xpress to cease all regulated payment services due to concerns the firm was not meeting its conditions of authorization. Customers cannot take money out of their accounts. The priority for the special administrators is to identify, protect and in due course return funds to customers in accordance with their interests to the fullest extent possible, the FCA said.
The company provides payment services through agents Fairdeal Express Money Transfer Limited, International Bureau de Change Limited and UAE Exchange UK Limited. Given the restrictions imposed on Xpress, its agents are also restricted from carrying on any regulated activities on its behalf. Any customers who have used Xpress via an agent and are unable to access their funds should contact the special administrators if they have any further questions, the FCA added
The special administrators are required to provide a report to creditors within eight weeks of their appointment. The report will provide details of Xpress’s history, the special administrators’ proposals and will include details of how customers should make a claim.