The Financial Conduct Authority (FCA) published the Consultation Paper (CP) 24/20 in September 2024 and it outlined the changes to the safeguarding regime for payment and e-money firms. This is in line with the FCA's statutory objectives to protect consumers and markets and its commitment to reduce harm from firm failure.
In December 2024, the FCA closed its consultation and the Policy Statement (PS 25/12) was issued on the 7 August 2025. The Supplementary Regime and related amendments to the approach document will come into effect on 7 May 2026.
Governance and Oversight
- Appoint an individual to oversee safeguarding
- Design a clearly defined safeguarding framework with roles, responsibilities and accountabilities clearly defined
- Safeguarding training program needs to be in place
Information Systems and Technology
- Independent books and records are maintained to reflect clients' assets
- The IT systems are subject to appropriate IT general and application controls
- End user computing controls on access databases and spreadsheets used in reconciliations
Documentation
- Design a Safeguarding policy
- Operation procedures for key processes need to be in place and kept up to date
- Appropriate escalation procedures in place when breaches occur
- Documentation of the risks and controls framework to align with new regulation
CASS Rule Compliance
- Conduct internal and external fund reconciliations on a regular basis as required and making good shortfalls
- Maintenance of a resolution pack to retrieve document without undue delay
- Notifications to the FCA for material breaches
- Regulatory returns submission monthly
- Due diligence on third parties appointed
- Receive funds into a designated safeguarding accounts with an acknowledgement letters
- Annual audits by qualified auditors
How Fide Consulting Can Help
Our team of regulatory specialists can assist your firm in navigating these changes. We offer comprehensive support including gap analysis, policy development, and training programmes tailored to your specific needs.