The UK’s Financial Conduct Authority announced significant changes to payment safeguarding rules for payment and e-money firms, effective May 2026, aiming to enhance consumer protection and financial stability.
This regulatory shift highlights increased compliance requirements, potentially affecting customer confidence and operational practices within both fiat and cryptocurrency platforms under FCA jurisdiction.
The Financial Conduct Authority (FCA) unveils major revisions to payment safeguarding rules, aimed at enhancing consumer protection and improving financial stability. Scheduled to take effect in May 2026, these changes follow extensive consultations with industry stakeholders. FCA Policy Statement on Payment Safeguarding Rules
FCA, led by Matthew Long, has introduced new requirements for audits, monthly reporting, and safeguarding checks. These measures intend to protect consumers from potential firm failures and build trust in the UK’s payment sector.
UK Payments Sector Faces New Compliance Burden
The changes primarily impact payments and e-money firms by increasing compliance requirements. Smaller firms with less than £100,000 in client funds are exempt from certain audits, encouraging proportionality and maintaining focus on larger entities.
Historical insolvencies saw customer fund deficits reaching 65%. The reviewed rules are expected to bolster consumer confidence, ensuring stronger protection. The move is likely to enhance the UK’s financial infrastructure stability, though no direct impact on cryptocurrencies is observed.
Revised FCA Rules Draw Parallels with Post-2008 US Regulations
Failures in the payment sector, notably from 2018 to 2023, emphasized safeguarding insufficiencies. The revised FCA regulations show parallels with US regulatory tightening post-2008, aiming to secure consumer funds.
Expert analysis indicates the FCA’s approach could substantially reduce insolvency risks. The focus on safeguarding might indirectly affect digital asset management, ensuring customer fund segregation and promoting user confidence.
“Most of those who responded to our consultation agreed we need to raise standards to protect people’s money and build trust…We’ll be watching closely to see if firms seize the opportunity and make effective improvements that their customers rightly deserve.” – Matthew Long, Director of Payments and Digital Assets, FCA, FCA Press Release
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