Only 13% of UK payment and e-money firms were performing daily reconciliations one day before the FCA's CASS 15 safeguarding rules took effect on May 7. The study, published by Payment Expert on May 6, found that 32% of firms believed they were compliant despite falling short on core requirements. Sixty-four percent still relied on spreadsheets for monthly safeguarding returns rather than automated systems.
The FCA introduced the Supplementary Regime under Policy Statement PS25/12 after finding that failed payment and e-money firms returned an average of only 65% of customer funds between 2018 and 2023. The rules require daily internal and external reconciliation, monthly regulatory returns within 15 business days, and resolution packs producible within 48 hours. Firms holding over GBP 100,000 in relevant funds must arrange annual safeguarding audits.
The FCA deferred its proposed end-state statutory trust requirement to a second phase after industry opposition. The regulator will review the Supplementary Regime's effectiveness after a full audit cycle before consulting further on whether customer funds should be held under statutory trust.