How Modulr and Calmony are regulated
Modulr FS Ltd (FRN: 900573) is licensed as an authorised E-Money Institution (EMI) and regulated by the Financial Conduct Authority (FCA). Calmony is a trading name of agentOS Proptech Group Ltd and is registered as a PSD agent with the Financial Services Authority, reference number 850923.
This enables Modulr to issue electronic money (e-money) to its customers, hold customer funds in safeguarded e-money accounts, and provide related payment services to customers.
Payment services in the UK are subject to the Payment Services Regulations (PSRs).
The PSRs apply to all payment services, meaning that in relation to payment services, there is no difference in how Modulr or other payment service providers and banks are regulated.
How Modulr and Calmony safeguard agent client funds
In line with Modulr’s regulatory requirements, 100% of customer funds related to the e-money that Modulr FS Ltd has issued are segregated from Modulr’s own funds, and safeguarded in a Bank of England account. As such, e-money in Modulr accounts is protected from any risk connected with Modulr’s or solvency.
How agent and client money protection providers are protected
In line with the Electronic Money Regulations, Modulr FS holds additional “own funds” to the value of 2% of the safeguarded balance. EMIs like Modulr Fs Ltd have a responsibility to notify the FCA should the “own funds” fall below the 2% mark.
The “own funds” requirement and safeguarding requirement means customer funds are 100% available to a customer, and there is a protection mechanism to help ensure an orderly wind down of an EMI if required.
While the Financial Services Compensation Scheme (FSCS) is not applicable in relation to e-money products, the regulatory regime outlined above can be relied upon and protects the full balance of customer funds, as opposed to protecting up to a cap (as under the FSCS).
Meaning, we use safeguarding to protect 100% of your money while the FSCS is limited up to a total of £85,000 for individual accounts.
With regards to money laundering and the Proceeds of Crime Act, Modulr has the same obligations as other payment service providers and banks.
Client Money Protection
For further information on how client accounts are safe guarded download sample letter.