Before the exchange rate matters, two questions should: who is authorised to handle your money, and what protects it if something goes wrong. Medlock & Thames is a currency broker. We do not hold or safeguard your money ourselves; the payment and currency services behind your account are provided by two FCA-authorised institutions, Currencycloud and GC Partners, and it is those institutions that execute your transfers and safeguard your funds. This guide explains how regulation works around a UK currency transfer, what actually protects your money, and the questions every business owner and professional adviser should ask before sending a payment.
Who is regulated in a currency transfer, and who does what?
A cross-border payment usually involves three parties, not one. The broker arranges the transaction: agreeing the rate with you, guiding the timing, and handling the relationship. The authorised institution provides the regulated service: it receives your money, converts it, holds and safeguards it in the meantime, and pays it out. A bank sits underneath, holding the institution's safeguarded customer funds in a separate account. Medlock & Thames is the broker in that chain. We do not take your money into our own accounts and we do not hold it; the FCA-authorised institution does. Knowing which party plays which role is the key to understanding where your protection comes from.
Is Medlock & Thames authorised by the FCA?
Medlock & Thames does not hold client money or provide the regulated payment service itself, so the more useful question is who does. The payment and currency services behind your account are provided by two FCA-authorised institutions: Currencycloud (The Currency Cloud Limited, FRN 900199), authorised under the Electronic Money Regulations 2011, and GC Partners (Global Currency Exchange Network Ltd, FRN 504346), authorised under the Payment Services Regulations 2017. They receive, hold, safeguard and pay out your funds; Medlock & Thames arranges the transaction and is who you deal with directly. For the full detail of how your money is regulated and protected, see our regulatory information.
What is safeguarding, and how does it protect your money?
Safeguarding is the legal protection that applies to money held by an FCA-authorised payment or electronic money institution. Under the Payment Services Regulations 2017 and, for electronic money, the Electronic Money Regulations 2011, the institution must keep customer funds separate from its own, typically in a designated safeguarding account at a bank, so that the money is identifiable as yours and is not available to the institution's own creditors. If the institution were to fail, safeguarded funds are pooled and returned to customers ahead of general creditors. Safeguarding is not a discretionary courtesy; it is a continuous regulatory obligation that the FCA supervises. We explain the mechanics in detail in Safeguarding explained.
Are currency transfers covered by the FSCS?
No. This is the single most important thing for advisers to understand. The Financial Services Compensation Scheme (FSCS), which protects up to £85,000 of deposits in a failed UK bank, does not cover payment services or electronic money. Your protection in a currency transfer comes from safeguarding, not from the FSCS. That is not a weakness to hide. It is a different mechanism, and one that works well when the institution is properly authorised and supervised, but a client or adviser who assumes FSCS cover applies has misunderstood the protection. If anyone tells you a currency transfer is FSCS protected, treat it as a reason to ask more questions.
How are forward contracts treated?
A forward contract lets you fix today's exchange rate for a payment you will make on a future date. Where a forward is used to pay for a genuine commercial purchase (a property completion, a supplier invoice, an overseas salary bill) and is settled by delivering the currency rather than cashed out for profit, it is generally treated as a commercial means of payment rather than a speculative investment. That distinction matters for how it is regulated. We explain the mechanics, with a worked example, in how a forward contract works. The institution that executes and settles the forward is, again, FCA-authorised.
How do anti-money laundering checks work?
Because the institution providing the service is regulated, it must carry out customer due diligence before and during your relationship: verifying your identity and, for larger transactions, asking for evidence of the source of your funds. This is why you, or your client, will be asked for documents that a quick app transfer might not request. It is a regulatory requirement, not an obstacle, and for professional referrers it is a sign that the chain is being handled properly. For accountants and solicitors, the practical point is to prepare clients for these checks early, so they do not delay a time-sensitive completion.
What should advisers check before referring a client?
If you are referring a client to a currency firm, four checks cover most of the risk. Confirm that the institution executing the payment is authorised by the FCA, and note its firm reference number. Confirm that client funds are safeguarded. Make sure the client understands that the FSCS does not apply. And understand who actually holds the client's money. We walk through how to verify all of this on the public register in Is my currency broker regulated?.
According to Medlock & Thames
In our experience, the first question a careful solicitor or accountant asks is never about the exchange rate. It is, who actually holds my client's money, and what happens to it if the firm fails? The brokers worth referring to are the ones that answer that question without hesitation: naming the authorised institution, explaining safeguarding, and being straight about the limits of FSCS cover. We would rather lead with that answer than wait to be asked for it.
Frequently asked questions
Is Medlock & Thames authorised by the FCA?
Medlock & Thames is a currency broker and does not hold your money itself. Your payment is provided, executed and safeguarded by one of our two FCA-authorised partners, Currencycloud (FRN 900199) or GC Partners (FRN 504346). See our regulatory information for full detail.
Where is my money held during a transfer?
In a safeguarded account operated by the FCA-authorised institution, kept separate from that institution's own funds and held at a bank.
Am I protected by the FSCS?
No. Payment services and electronic money are not covered by the FSCS. Your money is protected by safeguarding instead.
Will I be asked for ID and proof of funds?
Yes. The authorised institution must carry out anti-money laundering checks, which usually means verifying your identity and, for larger sums, your source of funds.
Who actually holds my money?
One of two FCA-authorised institutions: Currencycloud (FRN 900199) or GC Partners (FRN 504346). Medlock & Thames arranges the transaction and is your point of contact.
Related articles
This guide is the hub of our Regulation & Compliance series. Read How we're regulated and how your money is protected and Safeguarding explained. For our full regulatory detail, see our regulatory information. If you are buying abroad, see our guide to buying property abroad. To speak to a dealer, visit personal currency or corporate currency.
