Safeguarding reconciliation
Safeguarding reconciliation means the daily checks UK payment and e-money firms run to show the funds they hold for customers match what they owe. CASS 15 requires internal and external reconciliations on every reconciliation day.
This page explains the rules in general terms and is not legal or regulatory advice. Check the primary source and take advice on how the rules apply to your firm.
UK: FCA CASS 15.8, introduced by PS25/12 and in force from 7 May 2026.
How it works
An internal reconciliation compares the firm's safeguarding resource with its safeguarding requirement, using internal records. It also checks that funds sit in the right accounts. An external reconciliation compares the firm's records, currency by currency, with bank and custodian statements. Both must run at least once each reconciliation day.
A reconciliation day excludes weekends, bank holidays and days when relevant foreign markets are closed. Internal checks must use the same reconciliation point each day. A shortfall must be paid in by the end of that day, and any excess withdrawn. Firms confirm completion in a monthly safeguarding return.
External differences must be investigated and resolved without undue delay, unless they are purely timing differences. Until then, if records suggest more funds are needed, the firm treats that record as accurate and tops up from own funds. Material failures must be reported to the FCA in writing without delay.
Example
Illustrative example: On Tuesday the internal reconciliation shows a safeguarding requirement of £12,400,000 and a safeguarding resource of £12,250,000. The £150,000 shortfall must be paid into the safeguarding account by the end of Tuesday. The external check finds a £20,000 timing difference on one bank account, which clears on Wednesday.
Frequently asked questions
Do we need to reconcile at weekends?
Not under the daily requirement. Reconciliation days exclude weekends, bank holidays and days when relevant foreign markets are closed. Weekend flows still feed into the next reconciliation day's figures.
Can we use our own reconciliation method?
Yes, with conditions. A non-standard internal method needs documented justification and a written report from an independent auditor. The frequency cannot drop below once each reconciliation day.
Related terms
Sources
- CASS 15.8 Records, accounts and reconciliations · FCA Handbook
- PS25/12: Changes to the safeguarding regime for payments and e-money firms · Financial Conduct Authority
- Safeguarding requirements for payment and e-money institutions · Financial Conduct Authority
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