Regulators urge all charities to use regulated banking services

01 Mar 2018 News

The UK’s three charity sector regulators have told charities to use regulated banking services, warning their organisations funds could be at risk otherwise.

Yesterday, the Charity Commission for England and Wales, Office of the Scottish Charity Regulator and Charity Commission for Northern Ireland published an alert advising charities to use Financial Conduct Authority (FCA) regulated banking services.

The regulators said all charities should have a bank account in their name and must be able to give a good reason to hold and transfer funds by cash or other ways.

They said they would take into consideration circumstances where transfers between bank accounts would not be possible including “moving funds internationally such as operation in a war zone or other area where such facilities are unavailable”.

The chief executives of the charity regulators, Helen Stephenson, David Robb and Frances McCandless, said in a joint statement: “The financial services provided by banks and financial institutions provide safe, responsible, efficient and transparent way for charities to conduct their financial affairs.

“Every charity should have a bank account in its name to help keep its funds secure.

“This is the most prudent and responsible way to protect funds and evidence the movement of those funds in most cases.

“It is in the best interests of charities to hold and move funds through the regulated financial sector where it is available – if other methods to hold or move funds are used they involve higher risks and in some cases can result in slowing down charitable assistance to beneficiaries.”

A spokeswoman for the Charity Commission of England and Wales told Civil Society News the regulator did not have an estimate for how widespread the use of unregulated financial services is in the sector.

She also did not say what the Commission's position on charities' use of unregulated investment consultants is.

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