Navigating Financial Challenges: RFX Enters Special Administration

<p>Yesterday
(Wednesday), Rational Foreign Exchange Limited (RFX) initiated special
administration under the Payment and Electronic Money Institution Insolvency
Regulations 2021, appointing Ed Boyle and Kristina Kicks of Interpath Ltd as
joint special administrators (JSAs).</p><p>JSAs'
Role in Managing Customer Claims during RFX Administration</p><p>RFX
provides foreign exchange and payment services to both corporate and retail
clients, holding authorization from the Financial
Conduct Authority (FCA) to offer payment services under the Payment Services
Regulations 2017 (PSRs). The company's directors determined insolvency and
sought a special administration order from the court.</p><p>The
JSAs' primary responsibilities include managing customer claims against RFX and
facilitating fund distributions to customers when feasible. Customers are
encouraged to reach out to the JSAs for concerns, questions, or updates. The
JSAs will collect relevant information from RFX creditors and customers
regarding payments made to or owed by the company. </p><p>Simultaneously,
Xendpay Limited, a PSD Agent of RFX under common ownership, entered
administration, with Boyle and Kicks overseeing its affairs.</p><p>On
the same day, the FCA imposed its own initiative requirement on RFX, limiting
its activities, as detailed on the FS Register. The Payment and Electronic
Money Institution Insolvency Regulations 2021 introduced a special
administration regime, similar to ordinary administration but with an
additional objective of promptly returning customer funds.</p><p>In
a website post, the FCA stated that the Financial Services Compensation Scheme
does not cover payment services; instead, the PSRs impose safeguarding
requirements on regulated payment firms. RFX, obligated to segregate customer
funds, will undergo an assessment by the JSAs to distinguish safeguarded funds
from those belonging to the firm.</p><p>Despite
the special administration order, RFX maintains FCA authorization, with the
JSAs acting as officers of the court and complying with insolvency laws. The
appointed individuals are licensed insolvency practitioners with statutory
objectives, including engagement with authorities such as the FCA. </p><blockquote><p lang="en" dir="ltr">Foreign exchange and payment services firm Rational Foreign Exchange (RFX) Ltd enters special administration. <a href="https://twitter.com/hashtag/PaymentServices?src=hash&amp;ref_src=twsrc%5Etfw">#PaymentServices</a> <a href="https://twitter.com/hashtag/ForeignExchange?src=hash&amp;ref_src=twsrc%5Etfw">#ForeignExchange</a><a href="https://t.co/uPL7kP0rkn">https://t.co/uPL7kP0rkn</a></p>— Financial Conduct Authority (@TheFCA) <a href="https://twitter.com/TheFCA/status/1730164327703838823?ref_src=twsrc%5Etfw">November 30, 2023</a></blockquote><p>Impact
on Financial Firms: Over a Thousand Licenses Revoked</p><p><a href="https://www.financemagnates.com/forex/fca-targets-over-700-unused-financial-licenses-in-consumer-safety-drive/">The
FCA in the UK has expedited the process of revoking licenses</a> from financial
firms that are not actively using them, as reported by <a href="https://www.financemagnates.com/">Finance Magnates</a>. This measure,
aimed at safeguarding consumers from heightened risks associated with such
companies, has been applied over a thousand times, affecting 762 companies. </p><p>Recent
data reveals that, as of October 16, 2023, the FCA impacted 1,100 individual
business lines, with over 300 entities either voluntarily applying to cancel
their licenses or having them revoked by the regulator. Previously, the FCA had
a 12-month period to cancel a license after issuing the first warning, but now
it can act within 28 days. </p><p>The
<a href="https://www.financemagnates.com/tag/fca/">FCA</a> emphasizes that
businesses must demonstrate active engagement in regulated activities, or risk
losing their permissions. The report questions how a licensed firm, even one
not utilizing its licenses, could potentially harm consumers.</p>

This article was written by Tareq Sikder at www.financemagnates.com.