Safeguarding Accounts

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Payment and e-money firms that safeguard customer funds are required to implement an appropriate safeguarding method in accordance with the regulatory requirements set by the Financial Conduct Authority (FCA). These firms must ensure the safeguarding of relevant funds using one or a combination of permitted methods, which may include segregated safeguarding bank accounts, investment in secure liquid assets, or insurance or comparable guarantees. The chosen safeguarding method must align with the firm’s business model, transaction flows, currencies, scale, and risk profile. 

In practice, many firms encounter significant challenges in securing safeguarding arrangements, particularly with traditional banks. Common issues include lengthy onboarding timelines, enhanced due diligence, a limited appetite for payment and e-money firms, minimum balance requirements, and restrictions on certain business models or geographies. Firms operating across multiple currencies, such as GBP, EUR, and USD, often face additional complexities, including the necessity for multiple safeguarding accounts or parallel arrangements. 

For some firms, especially those undergoing AML audits or FCA licence applications, access to secure liquid assets or insurance-based safeguarding is crucial when traditional bank account solutions are either unavailable or insufficient, leading to further structuring and documentation challenges. A safeguarding audit may also be needed to ensure compliance with the Payment Services Regulation.

We support firms in identifying and securing appropriate safeguarding solutions across all three permitted methods, aligning with Payment Services Regulation requirements. 

We work with a wide network of safeguarding banks, custodians, insurers, and liquidity providers who have experience supporting payment and e-money firms, ensuring compliance with AML Audit standards. 

We help firms source segregated safeguarding accounts in GBP, EUR, and USD, tailored to their regulatory status and operating model, to facilitate FCA Licence Applications. 

Where appropriate, we assist with structuring safeguarding via secure liquid assets, including asset eligibility, custody arrangements, and reconciliation frameworks, all integral to a successful Safeguarding Audit. 

We also support insurance or guarantee-based safeguarding solutions where required, including introductions and ensuring regulatory alignment with the FCA. 

Our team helps prepare safeguarding narratives, fund-flow documentation, and supporting materials required by banks, custodians, and insurers during the onboarding process. 

Our support is designed to reduce onboarding friction, shorten timelines, and ensure safeguarding arrangements are acceptable to both counterparties and the FCA.