Webinar replay: CASS 15: Are you ready for the upcoming changes?

A replay of our webinar on CASS 15, designed to help senior leadership and board members understand the upcoming changes and ensure their firms are prepared for compliance and safeguarding audits.

Panel Guests:

Sam advises clients include banks, asset management firms, broker dealers, payment institutions and corporate finance houses on a broad range of regulatory and compliance matters within the financial services sector. Prior to working in private practice, Sam worked for seven years at the UK financial services regulator, the Financial Services Authority (the majority of this time in the FSA’s General Counsel’s Division), and has also spent time on secondment at Santander Asset Management UK Limited.

Sam has been published in financial services publications and journals (including Bloomberg World Securities Law Reports, Bloomberg UK Financial Services Law Reports and Thomson Reuters Compliance Complete). Sam has also been a guest lecturer on the IPF Diploma in Investment Education.

Andrew Welsh, Consultant, IQ-EQ

Andrew has over thirty years’ experience in the financial services space as a Fellow of the Institute of Chartered Accountants and around twenty years as a Fellow of the Securities Institute.

He has served at Board level, including with payment services organisations, and has managed regulatory change in a variety of financial services businesses.

While we have taken every care to ensure that the information in this webinar is correct on the date held, it has been prepared for general information purposes only and is not intended to amount to advice on which you should rely.

Webinar replay

Board-level questions: What CEOs, CFOs, and CCOs should be asking to ensure compliance
Understanding the ‘why’: The rationale behind the updated safeguarding rules and what they mean for your firm
Audit readiness: Practical steps to prepare for your first CASS 15 audit

Key webinar takeaways

CASS 15 marks a clear shift in how the FCA expects Authorised Payment Institutions and Electronic Money Institutions to safeguard client funds. It is not simply an update to the existing rules, but an overhaul to how safeguarding is governed and documented and tested, particularly in failure scenarios.

This webinar focused on what has driven those changes, where firms are likely to feel the impact first, and what regulators and auditors will expect to see in practice.

What CASS 15 changes in practice – and where firms typically need support

While CASS 15 is a regulatory change, it has practical implications across governance, operations and assurance. In practice, different advisers tend to support firms in different ways:

Auditors and accountants can help firms test whether their safeguarding arrangements work in practice. This includes reviewing reconciliations and breach reporting, and helping firms prepare for statutory audit scrutiny under the new zero‑materiality regime.

Lawyers can provide assurance that governance structures and documentation are legally robust and do not leave firms exposed, particularly where insurance‑based or hybrid safeguarding models are used and where failure or resolution planning is required.

Regulatory advisers can support firms with ensuring safeguarding arrangements are properly documented, alongside the design and implementation of scalable, repeatable reconciliation processes and ongoing regulatory reporting, particularly where existing processes may not meet CASS 15 expectations.

Why the rules have changed

CASS 15 was introduced by the FCA following safeguarding failures that exposed weaknesses in the previous regulatory framework, which, particularly where firms entered into insolvency, could cause issues returning customer funds. The FCA has responded by tightening definitions and removing areas open to interpretation that made it harder to establish how client funds should be treated.

The result is a regime designed to be clearer in theory, but more demanding in practice. Firms are expected to show not only that they have safeguarding arrangements in place, but how those arrangements are appropriate for their business and how they would work under stress.

Safeguarding is now a governance issue

One of the strongest themes in the discussion was the clearer and more explicit emphasis on the board’s existing accountability for safeguarding.

Under CASS 15, safeguarding decisions are expected to be owned, reviewed and evidenced at senior level. That includes decisions about reconciliation timing, safeguarding models, utilisation of insurance products and associated headroom, use of service providers, evaluation of banking partners and contingency planning. Where those decisions are not documented, regulators and auditors are likely to treat them as not having been made at all.

For many firms, this means revisiting governance structures, management information and board agendas – not just updating policies.

Reconciliations: more definition, more judgement

CASS 15 introduces new defined terms such as reconciliation points and safeguarding resources, but these are not just technical definitions. They have a real impact on how firms operate in practice, including how often reconciliations are carried out, how firms justify the timing of those reconciliations, and how they manage money moving in and out on an ongoing basis.

Firms operating across multiple currencies or time zones may need more than one reconciliation point in a day. What matters is not conformity across the market, but whether a firm can clearly explain and defend its approach.

Insurance and hybrid safeguarding models

The webinar also explored how CASS 15 affects insurance‑based and hybrid safeguarding models.

While the rules offer greater clarity, they also impose stricter expectations around payout terms, headroom management and contingency planning. Firms relying on insurance need to treat it as an actively managed part of their safeguarding framework, particularly given tighter policy terms and limited capacity in the market.

A different audit conversation

CASS 15 moves the safeguarding audit into the remit of a statutory auditor. Auditors are expected to place greater emphasis on transactional evidence, the flow of funds and whether systems operate as described.

The introduction of a zero-materiality threshold for breach reporting changes how reconciliations and controls need to operate day to day. Initial audits are expected to surface issues. The FCA’s focus is likely to be on how firms identify, document and resolve those issues, rather than whether everything is “clean” on first pass.

What firms should be doing now

Based on the discussion and attendee questions, firms should already be taking practical steps to prepare.

Questions boards should be asking