Two FCA-regulated payment firms lost the ability to operate within a week of each other. For anyone buying or selling an SPI, API or EMI, the lesson is not about staying compliant. It is about price. An FCA permission, on its own, is not the asset. The control framework underneath it is what a buyer pays for, and what a weak seller loses money on.
On 4 June 2026, the FCA required Euro Exchange Securities UK Limited to stop all regulated electronic money and payment services. The Court appointed interim managers from Teneo Financial Advisory. The regulator pointed to systemic weaknesses in the firm’s financial crime framework and safeguarding arrangements, alongside concerns about its ownership and governance. The firm will be heard on 11 June, after which the Court may lift the order or place it into special administration.
Days earlier, on 29 May 2026, the High Court placed Halo Financial Limited into special administration. Begbies Traynor were appointed joint special administrators. Halo was authorised under the Payment Services Regulations 2017. A month before, on 30 April, it had agreed a voluntary undertaking that restricted its payment activity and stopped it taking new funds. The administrators now have to work out which money is safeguarded for customers and which belongs to the firm before anyone gets repaid.
One fact turns both of these from regulatory news into a deal story. Customer money held by a payment firm is not protected by the Financial Services Compensation Scheme. The FSCS does not cover payment services. The only thing standing between a customer and their money when a payment firm fails is safeguarding: the firm’s legal duty to hold relevant funds separately. When safeguarding is clean, those funds go back to customers ahead of other creditors. When it is not, the money may not come back in full. A buyer will not pay full price for money that might not be there.
Why “FCA authorised” tells a buyer almost nothing
The FCA Register confirms that a firm is authorised. It does not show whether the firm’s safeguarding reconciles to the penny, whether its financial-crime controls actually work, or whether its ownership is clean. Buyers read “Authorised” and relax. That is the error. The status line is the easy part. The framework underneath it is where value is made or lost, and none of it appears on the Register.
This matters more in a regulated payments deal than in almost any other transaction, because the licence does not transfer by itself. A change of control needs FCA approval. The regulator looks at the incoming controller and at the state of the firm being acquired. A business carrying the kind of weaknesses the FCA named at Euro Exchange Securities, across financial crime, safeguarding and governance, is not a clean acquisition. It is a firm that needs fixing before it is safe to own. And the deal itself may not complete.
The control file decides the price
Before any SPI, API or EMI changes hands, five things determine whether the licence is worth what the seller thinks. A buyer should test each one. A seller should have each one ready before going anywhere near the market.
- Safeguarding reconciliations. The last twelve months, daily, evidenced. Not a policy document. Proof the firm knows where customer money sits every single day.
- Safeguarding account acknowledgement letters. The bank’s written confirmation that the safeguarding accounts are what they claim to be. Missing or stale letters are a red flag under the safeguarding rules that took effect on 7 May 2026.
- Financial-crime governance. Anti-money-laundering controls, transaction monitoring and suspicious-activity reporting that operate in practice, not just on paper. The FCA’s concern at Euro Exchange Securities was systemic weakness, which is exactly what a buyer’s diligence is built to find.
- Ownership and governance transparency. Who controls the firm, who sits behind it, and whether any of that complicates an FCA change-of-control assessment.
- FCA correspondence. Any requirements, undertakings or open matters on the firm. A voluntary undertaking like Halo’s is precisely the sort of thing that should surface on day one of diligence, not in month three.
That list reads the same whether you are buying or selling. The buyer uses it to price risk. The seller uses it to avoid losing the deal at diligence, which is the stage where a weak file costs the most.
If you run an SPI, do not assume the lighter-touch tier means lighter scrutiny on the things that matter to a buyer. A Small Payment Institution faces a lower authorisation bar and lower capital thresholds than an Authorised Payment Institution. It does not get a lighter safeguarding duty on the customer money it holds. Euro Exchange Securities was an e-money firm. Halo was an authorised payment firm. But the failure points the FCA cared about, safeguarding and financial-crime controls, apply to an SPI in exactly the same way. A buyer pricing your SPI tests the same file. An SPI owner who treats the smaller tier as a reason to run a lighter operation is building the discount into their own exit.
How a buyer turns the file into a price
Diligence findings do not stay abstract. They turn into money, in four ways. A clean file holds the agreed price. A weak file gets a price cut. Or part of the money is held back in escrow until the risk clears. Or the deal slows while the buyer’s own advisers re-test the gaps. Or the buyer leaves the deal. The seller rarely sees this as one moment. It arrives as a slow loss of terms between the first agreement and completion.
Then there is timing. A change of control in a regulated payment firm needs FCA approval. The regulator runs a controller assessment on the incoming owner and weighs the state of the firm being acquired. A business carrying open weaknesses adds risk and delay to that approval, and a deal that drags is a deal that loses momentum and price. Clean controls are not just a higher number. They are a faster, more certain completion, which is its own form of value.
Distress is not always contamination
Not every firm in trouble is a financial-crime story. A payments business can fail on clean commercial grounds: a lost banking partner, a thin capital position, a corridor that stopped paying. When safeguarding is intact and the problem is commercial, distress can be a genuine buy-side opportunity. Often it runs through the special administration route. A buyer can acquire a clean customer book without taking on the old company’s liabilities.
The point is not that distressed firms are toxic. The point is that the licence tells you nothing about which kind of distress you are looking at. The control file tells you everything. Euro Exchange Securities and Halo are different cases with the same instruction: read the framework, not the status line.
What to do before the first conversation
If you are buying, pull the target’s FCA Register entry before the first call and check for requirements or undertakings. They are public. They reset the conversation before it starts.
If you are selling, get the last twelve months of safeguarding reconciliations ready before the P&L. The financial story is what attracts a buyer. The control file is what survives them. Founders who lead with revenue and bury the safeguarding evidence lose value at the stage where it is hardest to win back.
Who this is not for
This is not guidance on how to fix a control framework or pass an FCA assessment. That is compliance work, and it belongs before a transaction, not inside one. It is also not for anyone trying to obtain a licence from scratch. Vertice Fintech works on transactions involving firms that are already authorised: buying them, selling them, and getting them through change of control without losing the value.
Two firms proved the same point in a week. The FCA permission is not the asset. What a buyer pays for, and what a seller can lose, is the quality of what sits underneath it. Vertice Fintech brokers SPI and API transactions in the UK, on both sides, and manages the change-of-control handover where most of the risk actually sits. If you are weighing a purchase or an exit and want a clear read on what a buyer will find, talk to Rodolfo Basilio.
Questions buyers and sellers ask
Does the FSCS protect a payment firm’s customers if it fails? No. The Financial Services Compensation Scheme does not cover payment services. Customer money depends entirely on the firm’s safeguarding, which is why the safeguarding file sits at the centre of any serious diligence (FCA, 2026).
What is special administration for a payment firm? A regime under the Payment and Electronic Money Institution Insolvency Regulations 2021. An administrator takes control of the firm and, unusually, carries a specific duty to return safeguarded customer funds as soon as reasonably practicable. Halo Financial sits under this framework now, and Euro Exchange Securities may follow after its 11 June hearing.
Why does any of this change what an SPI or API sells for? Because a change of control needs FCA approval, and the regulator weighs the state of the firm being sold. Weak safeguarding, financial-crime or governance controls raise completion risk and lower the price a buyer will pay, regardless of how good the revenue looks.
