The FCA's new safeguarding regime has been live for UK e-money institutions since 7 May 2026, and the first annual audit is the next hard test. If you hold customer funds under an EMI licence, the question for your licensing decision is no longer whether your safeguarding looks sound on paper, but whether you can evidence it every month and every year to a qualified auditor.
That shifts the cost of running a UK EMI. Safeguarding now sits alongside capital and governance as a standing operating requirement, so it belongs in any comparison of UK e-money licensing against other jurisdictions.
What does the UK safeguarding regime require from an EMI?
The FCA confirmed the changes in Policy Statement PS25/12 and announced them on 7 August 2025, with the rules taking effect nine months later, on 7 May 2026. Its press release sets out the headline obligations for payments and e-money firms:
- Annual safeguarding audits carried out by qualified auditors.
- Monthly reporting to the FCA.
- Daily checks that the right amount of money is being safeguarded.
- Better planning for what happens if the firm fails.
Firms that held less than £100,000 in customer funds are exempt from the audit requirement, according to the FCA. Law-firm summaries of PS25/12 add that the exemption turns on whether relevant funds exceeded that level at any point in the previous 53 weeks, and that the first audit is due six months after the end of the firm's first audit period, with later audits due within four months. Treat those timings as corroboration and confirm them against PS25/12 itself before you plan your calendar.
Why the first audit matters more than the monthly return
A monthly return is a reporting task. An independent safeguarding audit is an assurance event, and it tests whether your daily reconciliations, your third-party due diligence on banks and custodians, and your resolution documentation actually hold together. Weaknesses that were tolerable under the old, lighter regime now surface in a document that a regulator can read.
For founders choosing where to license, two practical points follow. First, a firm that expects to hold meaningful customer balances should budget for the audit and for the operational build behind daily reconciliation from day one, rather than treating it as a later compliance upgrade. Second, a firm that expects to stay under the £100,000 line should be honest about its growth plan, because crossing it mid-year brings the audit with it.
What EMI applicants should do now
The FCA's own EMI applicant page, last updated on 16 June 2026, still asks applicants to describe their measures to safeguard funds received in exchange for e-money, and it points to the 7 May 2026 date. In practice that means your application narrative should describe the daily reconciliation process, the named bank or insurer arrangements, and the failure planning, not just the existence of a segregated account.
If you are weighing the UK against other e-money regimes, use the e-money comparison to line up the regimes side by side. If your question is specific to your own safeguarding model, a bespoke report is the route to an answer scoped to your facts, and our pricing page shows what access covers.
Sources
- FCA, "FCA sets out changes to payment safeguarding rules" (7 August 2025)
- FCA, Electronic money institution applicants (last updated 16 June 2026)
- Saffery, UK FCA safeguarding changes (law-firm corroboration of audit timings)
Informational only, not legal advice. Verify with qualified counsel before acting.