Payments
The safeguarding rules just changed. The next stage is coming.
Protecting customer funds is now one of the most scrutinised obligations a payment institution or e-money firm carries. Under the FCA's Policy Statement PS25/12, the Supplementary Regime came into force on 7 May 2026, strengthening the safeguarding requirements that sit alongside the EMRs and PSRs.
The new rules are spread across the Client Assets Sourcebook and Supervision Manual — CASS 15 (the core safeguarding rules), CASS 10A (resolution packs), SUP 3A (safeguarding audit) and SUP 16.14A (regulatory reporting) — and bring prescriptive operational requirements: daily reconciliations of safeguarded funds, monthly regulatory reporting, resolution packs, third-party due diligence, and an annual safeguarding audit for firms holding more than £100,000 in relevant funds.
That is the interim position. The FCA's end-state “Post-Repeal Regime” would replace the safeguarding requirements of the PSRs and EMRs with a CASS-style regime under which relevant funds are held on statutory trust for customers — a more fundamental change, but one contingent on the repeal of the existing requirements under FSMA 2023, and one whose final shape (particularly the statutory trust mechanics) is not yet settled.
Firms that build robust, well-documented safeguarding arrangements now will be far better placed for that transition than those that treat it as a future problem.
- Safeguarding compliance under the new CASS 15 regime: reconciliations, reporting, audits and resolution packs
- Reviewing safeguarding arrangements and third-party relationships against current and forthcoming requirements
- Authorisation and variation of permission for payment institutions and e-money institutions
- Consumer Duty, financial promotions and conduct advice
- Preparing for the Post-Repeal (trust-based) regime
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