The Financial Conduct Authority (FCA) has issued final rules to strengthen how payment and e-money firms safeguard customer funds, intended to improve the likelihood and speed of refunds if a firm fails. The measures take effect on 7 May 2026, following a nine-month implementation period. The framework introduces annual safeguarding audits by qualified auditors, monthly reporting for payment firms, daily checks to confirm the correct amount of money is being safeguarded, and stronger failure planning to support quicker returns of customer money. To keep the regime proportionate for smaller firms, the FCA removed the audit requirement where a firm holds less than GBP 100,000 in customer funds. The FCA linked the changes to issues identified in past payment firm failures, noting that firms that became insolvent between Q1 2018 and Q2 2023 had average shortfalls of 65% of customers’ funds. The FCA will support firms through the implementation period via webinars, events and day-to-day supervision, and said it will monitor whether firms deliver effective improvements when the rules take effect, with a view to deciding whether further tightening is needed.
Financial Conduct Authority 2025-08-06
Financial Conduct Authority finalises new safeguarding rules for payment and e-money firms effective 7 May 2026
The Financial Conduct Authority (FCA) has finalized rules to enhance the safeguarding of customer funds by payment and e-money firms, effective 7 May 2026. Key measures include annual audits, monthly reporting, daily checks, and improved failure planning, with exemptions for firms holding less than GBP 100,000. The changes address issues from past firm failures, where insolvencies led to average shortfalls of 65% of customer funds.