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HM Treasury has confirmed the appointment of Adam Plainer, a prominent restructuring lawyer in London, to lead a review of the insolvency regime for payments and e-money firms.
Plainer has been confirmed as the independent reviewer of the Payment and Electronic Money Institution Insolvency Regulations 2021 (PESAR) via a letter from Tulip Siddiq, Labour’s economic secretary to the Treasury and overseer of financial services policy.
Plainer’s brief is to evaluate the effectiveness of the regime introduced to protect customers in the event of payment or electronic money firms entering insolvency.
It comes in conjunction with the Financial Conduct Authority’s (FCA) new proposals regarding the safeguarding of funds, which aim to make the system of returning funds to consumers in the event of wind-down plans and insolvency more efficient.
The PESAR, which were implemented by the previous government, serve as a special administration regime to help protect customers in the event of these types of firms being put into insolvency.
“The regime specifically introduced new statutory objectives for administrators of these firms, including the objective to return customer funds as soon as practicable,” Siddiq sets out in her letter.
The review will assess whether the regulations meet their intended goals and determine if they should remain in effect, with Siddiq writing that “the Review will need to assess the extent to which the regime is meeting its objectives and make a judgement on whether the regime should continue to have effect”.
The scope of the review includes:
- Examining the PESAR’s impact on individual customers in past insolvency cases.
- Evaluating the regime’s capacity to handle the insolvency of larger payment firms, as use of the regime has so far been limited to smaller entities.
- Analysing the efficacy of collaboration among key UK authorities, including HM Treasury, the Bank of England, the Financial Conduct Authority (FCA) and the Insolvency Service.
- Investigating the effectiveness of cross-border cooperation with international regulators.
- Considering recent changes to the safeguarding rules for payments and e-money firms introduced by the FCA.
Plainer, who has previously been a partner at prestigious law firms such as Dechert and Weil, Gotshal & Manges, is expected to provide an interim update by September 2025, with a final report to be delivered by the end of the year.
The findings will subsequently be presented to parliament to guide future regulatory decisions.
“I would also ask that you engage with the UK’s financial regulators and relevant authorities, including the Bank of England, FCA and Insolvency Service when assessing the efficacy of the regime,” Siddiq said in her letter.
Siddiq continued that “where appropriate, this review should take into account the FCA’s proposals, in so far as they are relevant to the regime”.
