Preparing for the FCA’s New Safeguarding Regime

As regulation tightens across payments and digital assets, firms treating safeguarding as a compliance exercise may soon find themselves under pressure. The Financial Conduct Authority’s (FCA) new safeguarding regime represents a significant shift – one that will raise expectations for how client funds are protected, reconciled, and reported.

For BCB Group, this change isn’t a challenge. It’s confirmation of the standards we already uphold.

The FCA’s New Safeguarding Regime

The FCA’s Policy Statement PS25/12 introduces the most comprehensive update to safeguarding rules in years. The new framework, effective May 2026, applies to payment and e-money firms, tightening oversight across the sector.

Key measures include:

1. Monthly safeguarding reporting to the FCA
2. Annual independent safeguarding audits
3. More frequent reconciliation of client funds
4. Stronger segregation requirements

The FCA’s goal is clear: close the gaps that have led to consumer harm and build greater confidence in payment and e-money institutions.

For firms that have operated on minimal controls, the next 18 months will bring intense scrutiny. For those already aligned, it’s an opportunity to prove their resilience.

To learn more about the new Safeguarding rules: what they mean and why they matter, please read our previous article on our Insights page.

Market Impact: A Step Change in Standards

The new rules mark a turning point for the industry. The FCA has made it clear that weak safeguarding frameworks will no longer pass inspection.

Firms with manual reconciliations, opaque governance, or limited transparency will struggle to meet the new standards. Some may face intervention or consolidation as compliance costs rise.

The result will be a smaller, stronger market – one where only firms with disciplined financial and operational foundations remain.

For institutional clients, that’s a positive shift. It means a safer environment and partners who operate to standards closer to those of traditional finance.

BCB Group’s Strategic Advantage

BCB Group completed its safeguarding readiness well ahead of the 2026 deadline. Our systems, processes, and reporting frameworks already meet, and in many areas exceed, the new regulatory requirements.

Safeguarding sits at the centre of every BCB service: from payment processing and FX to our instant settlement network, BLINC. The same principles apply across all – clear segregation of client funds, independent verification, and transparent reporting.

Our proactive approach reflects BCB’s broader ethos: to act early, prepare thoroughly, and deliver certainty for clients, whatever the regulatory landscape.

What Clients Should Be Asking

As the new regime approaches, institutions should review their providers and ask three key questions:

1. Are client funds thoroughly segregated and frequently reconciled? 

Proper safeguarding requires more than technical compliance. It demands systems that separate and monitor funds with precision.

1. Is there an independent audit process in place? 

External validation provides evidence that controls work as intended and that providers are trustworthy even under pressure.

1. How transparent is the reporting structure?

Regular reporting and clear disclosures ensure clients’ money is protected at every stage, giving them confidence.

Firms unable to answer these questions clearly may struggle to adapt as the FCA’s framework takes effect. At BCB, we can. Safeguards are part of our frequent operations, backed by independent oversight, and designed to meet institutional expectations for control and transparency.

Looking Ahead

The FCA’s new regime doesn’t just raise the bar; it aligns the UK more closely with Europe’s MiCA framework and global trends in digital asset regulation. Together, these initiatives are reshaping the market around a single principle: same risk, same regulation. Please visit our Insights page to read more about how a MiCA licence enhances client protection.

As institutional adoption grows, the ability to demonstrate robust safeguarding will become a defining factor for credibility. Firms that prepare early will lead.

BCB is built to endure that future – one where strength, compliance, and trust form the foundation of digital finance.

Talk to our team to learn how BCB can support your institution in meeting the new safeguarding standards with confidence. Contact BCB Group today.