Does my payments firm need a safeguarding audit?
17 May 2023 • Audit for Business • Corporate Audit • Corporate Finance • Financial Services • Internal Audit and Third Party Assurance • Safeguarding Audits
With new regulatory changes for safeguarding requirements announced in CP24/20, we investigate how the current rules will be affected and what firms need to do to prepare.
Following the launch of the Financial Conduct Authority's (FCA's) consultation (CP24/20) into the safeguarding regime, the following types of firms should be considering arrangements for their annual safeguarding audits:
Authorised payment institutions (‘APIs’)
E-money institutions (‘EMIs’)
With new rules incoming, firms will need to understand what this means for their current position and what they will need to do now in order to comply with the new rules. To support this, we have summarised key differences between current guidance and the new rules.
The new rules
In the table below we have highlighted the key impacts that the changes will have on the safeguarding audit regime for APIs and EMIs.
Which regulated firms require a safeguarding audit? | Currently, the guidance is set out in version 6 of the Approach Document (last updated November 2024) in which the regulator states that it expects APIs and EMIs holding relevant funds to arrange a specific annual audit of compliance with the safeguarding requirements under the PSRs and EMRs, if the firm is required to arrange an audit of its annual accounts under the Companies Act 2006. |
When will I need a safeguarding audit?
The regulator now plans to publish final interim rules with an accompanying policy statement by the end of Q3 2025. Firms will then have a transition period of 9 months to implement the changes in the interim rules. We recommend firms start planning for these changes and the new audit requirements now!
How we can help
If you are an API or EMI and would like to discuss your safeguarding audit needs, please get in touch via the below form and a member of our specialist team will contact you.