Pressure mounts on UK financial regulator to overhaul bank rules for politicians

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Strain is mounting on the UK’s monetary regulator to overtake the principles governing financial institution accounts for politicians and their households, after a cupboard minister and the chief of a political celebration raised recent issues.

Grant Shapps, the vitality safety secretary, mentioned this weekend that he, his spouse and two sons had all confronted difficulties “in getting an account”.

Shapps made the feedback within the wake of a furore over the closure of Nigel Farage’s checking account at Coutts, partly due to the previous Ukips chief’s political beliefs. The fallout has led to the resignation of each the chief government of Coutts and its father or mother firm NatWest.

The Monetary Conduct Authority is reviewing the strict regime that governs the financial institution accounts of so-called politically uncovered individuals (PEPs), which goals to stamp out corruption and bribery however has been criticised for curbing politicians’ entry to banking providers.

HSBC just lately requested Shapps’s 19-year-old son for swaths of documentation, together with explanations of the supply of his wealth, in “an inventory so long as his arm”, the Tory minister informed the Solar on Sunday newspaper. He mentioned the request was “utterly unreasonable”.

He additionally mentioned that his different son, aged 22, had been “outright refused” an account by a challenger financial institution, which he didn’t title.

His intervention adopted claims in The Sunday Occasions that the political celebration led by distinguished Brexiter Richard Tice may also have had its account closed.

Richard Tice, a distinguished Brexiter, mentioned the checking account of Reform UK, successor to the Brexit celebration, had been closed © Vickie Flores/EPA/Shutterstock

Tice informed the Monetary Occasions that in the summertime of 2021 Metro financial institution closed the account of Reform UK, the populist rightwing celebration beforehand often called the Brexit celebration.

He additionally mentioned that, earlier this yr, American Categorical, with whom he had banked for 35 years, requested quite a lot of new documentation from him. Problems in submitting the paperwork led to his account being suspended for six weeks, he mentioned.

As well as, Tice mentioned final summer time that Tide financial institution had closed the account of a small enterprise he ran.

Suspecting his political beliefs prompted these strikes, he has entered so-called topic entry requests to every of the three banks, in search of inner paperwork setting out the explanations for his or her choices.

Nevertheless, he acknowledged {that a} zealous, or overzealous, utility of present PEP guidelines might clarify the banks’ strikes, arguing the regime requires “elementary” reform.

He mentioned: “The definition of a PEP has been so extensively drawn, together with grandchildren of individuals, for heaven’s sake . . . The entire thought of the PEP regime was to not make it tougher for those who try to become involved in shaping and influencing politics within the UK. It was individuals who would possibly really be uncovered to manipulation exterior.”

Andrew Griffith, Treasury minister, has been probably the most vocal politician calling for reforms to banks’ procedures for closing accounts and overhauling the PEPs regime. A day after NatWest CEO Dame Alison Rose resigned within the fallout surrounding Farage’s financial institution closure, Griffith convened the nation’s prime financial institution executives to demand adjustments, together with that lenders triple the discover interval of terminations to 90 days to permit extra time for an attraction and that clearer explanations for closures be given.

Individually, earlier this month Griffith wrote to the FCA to induce the regulator to hurry up its overview into how PEPs are handled. Politically linked purchasers are topic to extra stringent necessities as a result of they’re seen to be at a better danger of bribery and corruption.

In June, the federal government relaxed the principles to scale back the due diligence necessities for home PEPs in comparison with these based mostly abroad.

Farage introduced over the weekend that he was launching an internet site to assist folks denied financial institution accounts.

Spokespeople for HSBC, Metro Financial institution and Tide all declined to touch upon any particular person shopper. Amex didn’t instantly reply to a request for remark exterior regular working hours.

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