The Financial Conduct Authority (FCA) has told banks, payment firms, and lenders to ensure that parliamentarians, senior public servants, and their families are not treated unfairly. The FCA made this announcement in a statement on Thursday.
"Public service naturally comes with greater scrutiny. But it must be proportionate and shouldn't disadvantage people running for office or taking senior public roles, or their families," said Sarah Pritchard, the FCA's executive director of markets and international, in the statement.
"That requires a balancing act. Most firms try to get it right but there is more they can do. We're following up with those firms that were getting the balance wrong to ensure they make changes."
Last year, Alison Rose stepped down as the CEO of lender NatWest after admitting to a "serious error of judgement" in discussing politician Nigel Farage's relationship with the bank with a BBC journalist, reported Reuters.
The incident led to a major review of how financial firms treated politically exposed persons (PEPs), amid concerns that some individuals were being denied accounts or other services due to their political views.
The FCA stated that most firms did not subject PEPs to excessive or disproportionate checks, but it is proposing changes to its guidance to prevent possible mistreatment of PEPs in the future.
The regulator is consulting the industry on whether UK-based PEPs should qualify for a lower risk status and on introducing special protections for non-executive members of the civil service, who should not be defined as PEPs solely for that reason, the FCA said.
The consultation will close on 18 October, but the FCA urged firms where possible improvements had been identified to act before the final updated guidance is published.
