Pricing Policy

One of the most significant regulatory drivers in pricing expectations for regulated firms is the FCA’s Consumer Duty, which places a proactive obligation on SCEL to act to deliver good outcomes for retail customers. Among its four outcomes is the Price and Value Outcome, requiring SCEL to ensure that prices paid by customers are reasonable relative to the benefits received and that fair value is demonstrably delivered. SCEL has carried out fair value assessments as part of its internal governance and embedded this in product design, pricing strategies and customer transparency.

The FCA has published good and poor practice guidance for firms on how to approach assessing price and value as part of the Consumer Duty. Supervisory updates focus on ensuring firms have robust frameworks for price-value analysis, including how to assess different customer groups and evidence fair outcomes. SCEL have assessed and applied these guidelines within its pricing policy.

This policy applies to products and services for retail customers under the Consumer Duty’s scope and is part of broader conduct requirements in the FCA Handbook.

• Consumer Duty outcomes (Products & Services, Price & Value, Consumer Understanding, Consumer Support)
• Clear, fair and not misleading communications and enabling informed customer decisions (as highlighted in FCA international payment pricing transparency work)
• Payment Services Regulations information requirements for framework contracts and changes to contractual information (Schedule 4 / Regs 48–50)

This policy applies to:

• International payments, money remittance
• Related currency conversion (online, app, telephone, in-person)
• All pricing components that include: FX rates, Source and conversion currency, fixed fees where applicable, variable fees where applicable, third-party fees (e.g. intermediary/correspondent bank charges), cancellation/variation charges, and any optional fees (e.g. “pay all fees” uplift).

4.1. Fair value & justification

• Pricing (fees and/or FX margins) must be demonstrably fair and proportionate to the costs and the value delivered, and the SCEL must be able to justify this.
• SCEL assess total customer cost across the “distribution chain” (including third-party charges where applicable) to ensure overall fair value

4.2. Transparency & total cost clarity

Before the customer commits to an international payment involving FX, we will clearly display (or explain, if by phone) the core items the FCA expects firms to provide up-front, including: amount received, the amount exchanged and delivered, exchange rate applied, fixed/variable fees, and total remittance fees (if and where fees are applicable) .

4.3. No “zero fee” misdirection

In line with FCA guidance SCEL earns revenue via FX spreads/mark-up, we will not describe the transfer as “free” in a way that implies no cost to the customer. The FCA flags this as poor practice where the mark-up is not made clear.

4.4. Vulnerable customers

Pricing structures must be assessed for potential disproportionate harm to customers with characteristics of vulnerability

4.5. Risk adjusted returns

Pricing by SCEL will consider risk adjusted returns incorporating:

• Credit risk
• Market risk
• Liquidity risk
• Operational and security risk
• Regulatory risk

4.6. Commercial viability and sustainability

Pricing structures must ensure long-term financial viability and support the Firm’s profitability objectives.

4.7. Competitive Positioning

Pricing shall consider prevailing market conditions and competitor benchmarks while avoiding predatory or unsustainable pricing practices.

5.1. Authority Levels

Pricing approvals shall follow the SCEL Delegation of Authority framework. Escalation thresholds shall apply for:

• Material margin reductions / excess on SCEL tolerances
• Vulnerability
• Bespoke transactions outside of standard FX trading and payments transactions

5.2. Oversight

The SCEL board governs the pricing process through:

• Review pricing strategy periodically
• Monitor margin performance ongoing through the consumer duty monitoring process
• Assess compliance with this policy
• Approve material pricing changes or strategies
• Review breaches and incidents
• Review and approve client facing material that has references to pricing

Pricing performance and margin adequacy shall be monitored on a regular basis.

Monitoring is conducted by business unit heads, the consumer duty oversight team and compliance

SCEL carries out the following processes and periodic reviews to monitor and assess its pricing:

• Profitability by product and client segment
• Alignment with risk appetite
• Market competitiveness
• Regulatory compliance

SCEL maintains appropriate records of:

• Pricing and margin reports / schedules
• Approval documentation
• Client disclosures and client facing pricing information content
• Periodic pricing reviews and competitor analysis
• Breaches and incidents reports

Records are retained in accordance with the SCEL document retention policy and applicable regulatory requirements.

Any breach of this policy must be:

• Reported to Compliance and the consumer duty oversight committee
• Logged and categorised in the breach and incidents log
• Investigated promptly and completely
• Remediated appropriately
• Documented with corrective actions
• Where applicable, necessary HR actions undertaken