CASS 15 daily safeguarding reconciliation
CASS 15 requires UK authorised payment institutions, e-money institutions, credit unions that issue e-money and small payment institutions that opt in to safeguarding to run an internal and an external safeguarding reconciliation at least once each reconciliation day, under rules in force since 7 May 2026. The internal reconciliation compares the safeguarding resource with the safeguarding requirement using the firm's own records, and the external reconciliation compares those records, currency by currency, with statements from the banks, custodians and other parties that hold relevant funds.
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.
Jurisdiction: United Kingdom · Regulator: Financial Conduct Authority
Who is in scope
- CASS 15 applies to authorised payment institutions, small payment institutions that voluntarily safeguard, electronic money institutions and credit unions that issue electronic money, where they receive or hold relevant funds (CASS 15.1.2R). source
- CASS 15 covers only payment services and e-money issuance within the scope of the Payment Services Regulations or Electronic Money Regulations (CASS 15.1.3R). It does not apply where payment services are provided to both payer and payee from outside the UK, and the FCA says funds for those transactions should not be mixed with relevant funds, even if routed through a UK correspondent (CASS 15.1.5G). source
- A reconciliation day is a business day that is not a Saturday, Sunday, Christmas Day, Good Friday or a bank holiday in any part of the UK. Where a reconciliation requires anything to be done by reference to a market outside the UK, any day on which that market is not normally open is also excluded (FCA Glossary definition inserted by PS25/12). source
- An e-money institution or credit union that also provides payment services unrelated to issuing e-money must run separate reconciliations for its unrelated payment services asset pool and its e-money asset pool (CASS 15.8.3R(2) and 15.8.5G). source
- A firm that protects relevant funds with an insurance policy or guarantee that is unlimited in amount does not need an internal safeguarding reconciliation, but must calculate its safeguarding requirement daily and record the date, the actions taken and the outcome (CASS 15.8.11R). source
What the rule requires
| Requirement | How often | Source |
|---|---|---|
| Perform an internal safeguarding reconciliation as often as necessary and no less than once each reconciliation day (CASS 15.8.19R). Firms can also reconcile on business days that are not reconciliation days (CASS 15.8.20G). | each reconciliation day | source |
| Select reconciliation points at the same time for every day on which internal reconciliations are performed, base each reconciliation on records as at that point, and record the points and the frequency in the firm's policies and procedures (CASS 15.8.21R and 15.8.22R). | each reconciliation day | source |
| Use values from internal records and ledgers (for example payment accounts and the cash book), not values from bank statements or other third-party records, when performing the internal reconciliation (CASS 15.8.15R). Third-party data can be used to build internal records where no other method could reasonably be employed, for example where funds are applied to client balances automatically through APIs (CASS 15.8.7G(2)). | each reconciliation day | source |
| Under the standard method, compare the safeguarding resource with the safeguarding requirement. The resource is item A (balances in relevant funds bank accounts), item B (relevant funds segregated but not in a relevant funds bank account or invested), item C (relevant assets valued as at close of business on the previous business day) and item D (funds protected by insurance or guarantee) (CASS 15.8.26R). The requirement is the sum of individual safeguarding balances, ignoring negative balances, plus amounts received but not yet allocated to a client (CASS 15.8.30R). | each reconciliation day | source |
| Compare the D+1 segregation requirement (the relevant funds that should be held in relevant funds bank accounts or as relevant assets) with the D+1 segregation resource (items A and C) (CASS 15.8.35R). The comparison is not required if all relevant funds are held in a relevant funds bank account or were invested in relevant assets before the last internal reconciliation (CASS 15.8.13R). | each reconciliation day | source |
| Pay any shortfall into a relevant funds bank account or invest it in relevant assets as soon as possible and in any case by the end of the day on which the reconciliation is performed, or withdraw any excess (CASS 15.8.50R). If relevant funds cannot be used to fix a D+1 shortfall, the firm must use its own funds (CASS 15.8.51R). | each reconciliation day | source |
| Perform an external safeguarding reconciliation as often as necessary and no less than once each reconciliation day, and as soon as reasonably practicable after the date it relates to (CASS 15.8.42R). It covers banks holding relevant funds bank accounts, any other person holding an account in which relevant funds are held, and authorised custodians or third parties holding or managing relevant assets (CASS 15.8.39R). | each reconciliation day | source |
| In the external reconciliation, compare the firm's recorded balance, currency by currency, with the most recent statement or confirmation for each account holding relevant funds, and compare relevant assets by quantity, investment by investment, with custodian statements (CASS 15.8.47R and 15.8.48G). | each reconciliation day | source |
| Investigate any external discrepancy and resolve it without undue delay, unless it arises solely from timing differences (CASS 15.8.56R). If it cannot be resolved immediately and one set of records shows more relevant funds are needed, treat that record as accurate and pay in own funds until the matter is resolved (CASS 15.8.57R). | ongoing | source |
| Allocate relevant funds received to an individual client promptly and no later than the end of the business day following receipt, recording them as 'unallocated relevant funds' until then (CASS 15.2.5R). Funds that cannot yet be identified as relevant funds or other funds are recorded as 'unidentified relevant funds' (CASS 15.2.9R). | ongoing | source |
| Before using a non-standard method of internal reconciliation, document the reasons it meets the rule's objectives and obtain a written reasonable assurance report from an independent auditor; the same applies before any material change to that method (CASS 15.8.37R). | ongoing | source |
Deadlines
- The CASS 15 reconciliation rules came into force on 7 May 2026 (PS25/12, paragraph 2.33). source
- A shortfall found by an internal reconciliation must be fixed by the end of the day on which the reconciliation is performed (CASS 15.8.50R). source
- Relevant funds receipts must be allocated to a client no later than the end of the business day following the day of receipt (CASS 15.2.5R(1)(b)). source
Records and evidence
- For each internal and external reconciliation, the firm must record the time and date, the actions taken, the outcome of the safeguarding requirement and resource calculation and, where relevant, the outcome of the D+1 comparison (CASS 15.8.9R). source
- Records made under CASS 15 must be kept for 5 years from the later of the date of creation and the date of the most recent modification (CASS 15.8.8R(3)). source
- A firm must tell the FCA in writing without delay if its records are materially out of date or inaccurate, if it will be unable to or materially fails to perform an internal or external reconciliation or fix a shortfall or excess, or if it learns that in the preceding 12 months the amount safeguarded was materially different from the amount required (CASS 15.8.60R). source
- The monthly safeguarding return asks the firm to confirm whether it carried out internal and external safeguarding reconciliations every reconciliation day during the month (safeguarding return questions 26 and 27, SUP 16 Annex 29BR in PS25/12). source
Inputs when money sits across banks, partners and wallets
| Input | What it feeds | Rule |
|---|---|---|
| Balance of each relevant funds bank account at the reconciliation point, by currency, from the firm's own ledger | Item A of the safeguarding resource in the internal reconciliation and the D+1 segregation resource | source |
| Statement or other confirmation for every bank account, custodian account and other account holding relevant funds, as close as possible to the same point in time as the internal reconciliation point | External reconciliation, which compares balances currency by currency with the most recent statement (CASS 15.8.47R and 15.8.40G(2)) | source |
| Relevant funds segregated outside relevant funds bank accounts, such as cash, funds held by agents or funds in another segregated account | Item B of the safeguarding resource (CASS 15.8.27G) | source |
| Per-client ledger of receipts, credits, executed payments, e-money redeemed and fees due | Individual safeguarding balances; a payment is deducted only once funds have been paid to the payee or the payee's payment service provider (CASS 15.8.33R) | source |
| Receipts not yet allocated to a client and receipts not yet identified as relevant funds | The safeguarding requirement includes unallocated receipts (CASS 15.8.30R(2)); unidentified funds are recorded separately (CASS 15.2.9R) | source |
| Holdings of relevant assets by quantity at each custodian, with values as at close of business on the previous business day | Item C of the safeguarding resource and the quantity check in the external reconciliation (CASS 15.8.26R(3) and 15.8.48G) | source |
| Cover amount of each insurance policy or guarantee protecting relevant funds | Item D of the safeguarding resource (CASS 15.8.26R(4)) | source |
| Calendar of reconciliation days, including UK bank holidays and closures of any foreign market a reconciliation depends on | Sets the days on which internal and external reconciliations are required | source |
| Classification of each receipt as relevant funds or funds from other activities | Records must distinguish relevant funds from other funds at any time and without delay (CASS 15.8.3R(1) and 15.8.4G) | source |
Where Polynopsis fits
Polynopsis gives finance teams one read-only, timestamped position across every bank, payout partner, exchange and wallet, which is the balance data a safeguarding reconciliation starts from. It is not safeguarding or reconciliation software, and it works alongside the tools and processes firms use to meet these rules.
Frequently asked questions
Do CASS 15 reconciliations have to run at weekends?
No. The minimum is once each reconciliation day, which excludes weekends, Christmas Day, Good Friday, UK bank holidays and days when a foreign market the reconciliation depends on is closed. Firms can choose to reconcile on other business days too.
Can a bank statement be used as the source for the internal reconciliation?
No. CASS 15.8.15R requires values from the firm's internal records and ledgers. Third-party data, such as balances applied through APIs, can be used to build those internal records where no other method could reasonably be employed. Bank statements are the comparison point for the external reconciliation.
When does a payout stop counting towards a client's safeguarding balance?
Under CASS 15.8.33R, an executed payment is deducted only once the funds have been paid to the payee or the payee's payment service provider. Until then the amount stays in the client's individual safeguarding balance.
What happens if a bank statement difference cannot be cleared the same day?
The duty to investigate and resolve does not apply to differences that arise solely from timing differences between accounting systems. Other differences must be investigated and resolved without undue delay. If a record shows that more relevant funds are needed, the firm treats that record as accurate and pays in its own funds until the matter is resolved.
Other rules
Sources
- CASS 15.8 Records, accounts and reconciliations · FCA Handbook
- CASS 15.1 Purpose and application · FCA Handbook
- CASS 15.2 Organisational requirements · FCA Handbook
- PS25/12: Changes to the safeguarding regime for payments and e-money firms (August 2025) · Financial Conduct Authority
Know where all your money is.
Polynopsis gives cross-border payment teams one live position across every bank, payout partner, exchange and wallet, including money in flight, and warns before a corridor runs dry.