- The UK regulator raises fresh concerns over EML Payments (EML) UK Subsidiary, Prepaid Financial Services UK (PFS UK)
- EML says the concerns are similar to those raised by the Central Bank of Ireland last year for EML’s Irish subsidiary relating to Money Laundering and Terrorism Financing
- PFS UK will now stop onboarding new customers, agents and distributors until a remediation program is complete
- EML says the temporary onboarding halt will result in an expected group revenue loss of “less than $5 million” in FY23
- EML shares dropped 35.7 per cent to trade at 40.5 cents at market close
EML Payments (EML) shares have dropped over 30 per cent after the company announced it would stop onboarding new customers, agents and distributors to its UK subsidiary, Prepaid Financial Services Limited (PFS UK), following concerns raised by the UK regulator.
EML says it’s expecting to lose group revenue of “less than $5 million” in FY23 through the temporary onboarding halt.
The Financial Conduct Authority (FCA) raised these fresh concerns with PFS UK almost 18 months after Ireland’s Central Bank raised “significant” concerns with EML’s Irish subsidiary, PFS Card Services (PCSIL).
The Central Bank of Ireland (CBI) issued correspondence to PCSIL, advising it may issue directions amid Anti-Money Laundering and Counter-Terrorism Financing concerns, causing company shares at the time to drop more than 40 per cent.
EML said these fresh concerns raised by the FCA in the UK are “similar” to the concerns raised by CBI in Ireland, and that the temporary cease would give PFS UK the opportunity to address them.
PCIL is currently undertaking a remediation program, with limitations to the company unable to be lifted until this program is satisfied by a third-party assessment.
EML said PFS UK will also execute a remediation plan and won’t begin onboarding again until this is also satisfied by a third-party.
EML Managing Director Emma Shand said since her appointment in July, working “constructively” with the regulators has been her “priority.”
“EML accepts that it has not moved quick enough in the past to address regulatory concerns in the PFS business. We need to do better, and we will,” she said.
“We understand we have an important role to play in tackling financial crime and
to keep our customers safe, at a time that threats are ever increasing across the
banking and payments sectors”.
EML shares were down 35.7 per cent and trading at 40.5 cents at market close.