Introduction to CASS 15 Safeguarding rules

In August 2025, the FCA published final Safeguarding rules by introducing CASS 15, a new chapter in the Client Assets Sourcebook (CASS). These new rules are effective from 7 May 2026, and mainly affect authorised payment institutions, e-money institutions, for small e-money institutions and credit unions issuing e-money. The goal is to enhance safeguarding rules compliance with standards already applied by investment business firms.

What do the new requirements of CASS include?

• Annual CASS audits are performed by audit firms (previously, they could be performed by non-audit firms).
• Monthly regulatory reporting of relevant funds to the FCA.
• Daily internal reconciliations of relevant funds with a cut-off time for reconciliation clearly noted.
• Safeguarded funds must now be held under a statutory trust.
• Enhanced governance and record keeping.
• Clear wind-down plans to ensure smooth distribution of relevant funds.
• Segregated funds are no longer accepted, all relevant funds should be received in safeguarded accounts.

What should firms do to prepare for CASS 15?

• Gap analyses: firms are immediately expected to perform gap analyses to align systems and controls
• Annual external audits: for firms that have not used audit firms, appointment of qualified external auditors to conduct the annual safeguarding audit should be done and audit findings and remedial actions should be reported to the FCA. Firms that have not safeguarded over £100,000 of relevant funds at any point in the previous 53 weeks are exempt from an annual external audit.
• Policy and procedure updates: firms to ensure internal policies and procedures comply with the new requirements under CASS 15.
• Training: relevant staff to receive adequate training on governance and control framework,
• Contingency planning: documentation should be put in place for the processes to be followed in the event of an insolvency and a responsible officer to oversee the contingency plans and audit liaison should be appointed.

As firms prepare to usher in the CASS 15 regime, considerations should be made for:

• The increase in operational costs is a result of increased compliance.
• New IT systems and or upgrades to existing systems to support compliance.
• The corporate culture shift to an increased regulatory regime should not be underestimated.
• Change management procedures and controls and staff training costs to help with the transition to the new regime

The main goal of CASS 15 is to enhance customer protection by providing clarity and reducing ambiguity in the process of returning customer funds in the event of firm failure. To better position themselves for compliance, those charged with governance should ensure frameworks are in place to guarantee full compliance with the regime.