UNITED KINGDOM Law and Practice Contributed by: James Burnie, Kathryn Dodds, Olga Antonova and Nicky Androsov, gunnercooke llp
5. Payment Processors 5.1 Payment Processors’ Use of Payment Rails Generally, payment processes need to use a payment rail in order to operate. 5.2 Regulation of Cross-Border Payments and Remittances The provision of cross-border payments and remit - tances from abroad is generally unregulated if there is no UK establishment. The provision of cross-border payments and remit - tances from the UK to other countries is generally regulated the same way as payment services gener - ally; however, there are some differences in terms of operational aspects, such as the allowed settlement time for payments. 6. Marketplaces, Exchanges and Trading Platforms 6.1 Permissible Trading Platforms The nature of the regulation of a marketplace is dependent on the way in which it is set up and the nature of the asset traded. With respect to the trading of regulated financial instruments (which does not include crypto-assets), the most regulated markets are regulated markets, fol - lowed by multilateral trading facilities, organised trad - ing facilities and firms “making arrangements with a view to” transactions. Regulated markets include entities such as the Lon - don Stock Exchange, with onerous listing rules for firms wishing to trade on those exchanges. Multilateral trading facilities have to operate in accord - ance with non-discretionary rules, whereas order exe - cution must be carried out on an organised trading facility (OTF) on a discretionary basis. The activity of “making arrangements with a view to” a transaction is the most light-touch, and generally applies to firms that connect buyers and sellers of
such agreement can be entered into, and as regards protecting vulnerable persons. Other loans that are not with consumers/retail may be completely unregulated, and so there are no such considerations. As a result, if an agreement is not a regulated credit agreement, it is unregulated regard - Where lending involves providing consumer credit, the lender will need to be regulated by the FCA for this purpose and to comply with the FCA’s requirements for lenders. There is no such obligation in relation to unregulated lending. 4.3 Sources of Funds for Fiat Currency Loans There is no specific regulation regarding what the source of funds should be for a loan; however, depending on how the loan is financed, this may trigger regulation. In this respect, it is noted that if money is borrowed from one person and then on- lent to another person, this may well constitute the activities of running a collective investment scheme (if there is a look-through to how the funds are on-lent) or deposit-taking (if there is no look-through to how the funds are on-lent). The issues therefore depend on the nature of the activity; for example for a collective investment scheme there is an emphasis on ensur - ing that the funds are properly managed and that the fund management activity is properly overseen. On the other hand, the focus on deposit-taking tends to be as regards ensuring that the risk of solvency of the institution is properly managed. 4.4 Syndication of Fiat Currency Loans Syndication of loans does take place. Outside of the scenarios set out in 4.3 Sources of Funds for Fiat Currency Loans , this is generally unregulated and, as a result, there is no specific legal practice. How - ever, there are usually commercial norms; for example, there tends to be a lead lender who organises the syndicate and is the primary entity performing due diligence. less of the size of the borrower. 4.2 Underwriting Processes
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