Safeguarding of Client Funds
This page provides a detailed explanation of how Redbanx Ltd protects client funds.
If you are looking for a quick overview, please refer to our Frequently Asked Questions (FAQ) page.
What is Safeguarding?
Redbanx Ltd safeguards client funds in accordance with the Electronic Money Regulations 2011 and the requirements of the Financial Conduct Authority.
Safeguarding is designed to protect client funds by ensuring they are held separately from the firm’s own money.
How We Safeguard Your Funds
We use the segregation method of safeguarding.
This means that:
- When we receive cleared funds from you, we issue electronic money (e-money) to your Redbanx account
- An equivalent amount is placed into designated safeguarding accounts held with authorised credit institutions
- These accounts are clearly identified and separate from Redbanx Ltd’s own funds
- The institutions holding these funds have no rights over them
This ensures that your funds are protected and not used for Redbanx Ltd’s operational purposes.
Where Client Funds Are Held
Redbanx Ltd holds safeguarded client funds with regulated credit institutions, including:
- ClearBank Limited (UK)
- EMBank European Merchant Bank UAB (EMBank) (EU)
These institutions are selected following appropriate due diligence and are subject to regulatory oversight in their respective jurisdictions.
Safeguarding institutions hold funds on behalf of Redbanx Ltd and do not have a direct relationship with individual clients.
Use of Segregated Client Accounts
We may use segregated client accounts with banking and payment providers to facilitate payment and foreign exchange services.
It is important to note that:
- These accounts are used for operational purposes only
- They are not safeguarding accounts
- Funds are not held in these accounts overnight
- At the end of each business day, all relevant funds are transferred into safeguarding accounts in line with regulatory requirements
Our Controls and Oversight
We maintain robust processes to ensure safeguarding is effective, including:
- Daily safeguarding calculations
- Daily reconciliation between client funds and safeguarding accounts
- Ongoing monitoring and oversight by senior management and compliance
These controls are designed to ensure that client funds are protected at all times.
What This Means for You
Safeguarding ensures that:
- Your funds are held separately from Redbanx Ltd’s own funds
- Your funds are protected in the event of insolvency
- Your funds are not used for lending or investment purposes
Important Information (FSCS)
Redbanx Ltd is an Electronic Money Institution and not a bank.
This means that your funds are not covered by the Financial Services Compensation Scheme (FSCS).
What Happens if Redbanx Ltd Becomes Insolvent?
In the unlikely event that Redbanx Ltd becomes insolvent:
- Funds held in safeguarding accounts are intended to be returned to clients
- These funds are protected from claims by other creditors
- An insolvency practitioner may deduct reasonable costs associated with returning those funds
While the safeguarding regime is designed to return funds in full, the process may take time and, in certain circumstances, deductions may apply.
Further Information
Further information on safeguarding can be found in the Financial Conduct Authority’s Payment Services and Electronic Money Approach Document.
If you have any questions, please contact:
Need a simpler overview?
For a summary of how safeguarding works, including key questions and answers, please visit our FAQ page.