FRC: New CASS Appendix Safeguarding Payment E-Money Consultation Launched

• The Financial Reporting Council (FRC) has launched a consultation on a new Appendix to the CASS Assurance Standard.
• This Appendix provides a framework for safeguarding assurance engagements for payment and e-money institutions.
• It responds to the FCA's PS25/12, which introduced a new safeguarding audit requirement in August 2025.
• The FRC's proposed guidance replaces interim advice issued in March 2026.
• Stakeholders can submit feedback by November 26, 2026, and attend a roundtable on November 3, 2026.

Lawyers and compliance officers advising UK payment and e-money institutions should review the proposed FRC Appendix to the CASS Assurance Standard to understand the new framework for safeguarding assurance engagements and consider submitting feedback to the consultation by November 26, 2026, to shape the final guidance for these critical audits.

The Financial Reporting Council (FRC) has initiated a public consultation regarding a significant addition to its Client Assets (CASS) Assurance Standard. This proposed new Appendix is specifically designed to address safeguarding assurance for payment and e-money institutions, aiming to establish a robust framework for audit practitioners. Published on September 30, 2026, this consultation represents a key step in enhancing the oversight of financial services firms operating in the UK.

This FRC CASS Appendix safeguarding payment e-money consultation is a direct response to evolving regulatory requirements. It seeks to provide clear guidance for the specialized assurance engagements now mandated for certain entities within the payment services and e-money sectors. The FRC's objective is to ensure that these critical audits are conducted with consistency and rigor, thereby bolstering confidence in the safeguarding of client funds.

The impetus for this new guidance stems from the Financial Conduct Authority's (FCA) updated safeguarding regime. In August 2025, the FCA issued Policy Statement PS25/12: Changes to the safeguarding regime for payments and e-money firms, which introduced a mandatory safeguarding audit requirement for specific payment services and e-money institutions. This regulatory change underscored the need for a comprehensive audit framework to ensure compliance and protect customer assets.

Prior to this, the FRC had issued Interim Guidance on Payment and E-money Safeguarding Assurance Engagements in March 2026. The new Appendix is intended to supersede this interim advice, offering a more definitive and detailed set of requirements and application materials. It is crucial to note that the FRC's current initiative does not create new audit obligations or expand the scope of institutions subject to these audits; rather, it provides the necessary audit framework to implement the FCA's existing requirements.

The proposed Appendix integrates seamlessly with the existing CASS Assurance Standard, augmenting it with specific provisions pertinent to safeguarding assurance engagements. It details both requirements and application material, meticulously tailored to the unique characteristics of these specialized audits. The development process for this crucial document involved extensive collaboration, with the FRC engaging a dedicated working group. This group comprised diverse representatives, including regulators, audit practitioners, payment services and e-money firms, and other relevant stakeholders, ensuring a well-rounded perspective.

This collaborative approach has resulted in a document that aims to provide clarity and consistency for those undertaking Financial Reporting Council safeguarding assurance. The Appendix focuses solely on the methodology and standards for conducting these audits, without altering the underlying regulatory obligations or the types of firms that must comply. Its purpose is to standardize the audit process, ensuring that the safeguarding of client funds by payment institutions is assessed effectively and uniformly.

The FRC is actively soliciting feedback on this proposed Appendix, inviting all interested parties to contribute their insights. Stakeholders are encouraged to review the consultation document and the new Appendix thoroughly. Responses should be directed to cass@frc.org.uk and must be submitted by 23:59 on Thursday 26 November 2026. It is important that comments focus specifically on the FRC Appendix and its content, rather than on the broader FRC regulatory framework.

To facilitate deeper engagement and discussion, the FRC will host a roundtable event on Tuesday 3 November 2026, from 10:00 to 11:30. This in-person session, held at the FRC’s offices, offers a valuable opportunity for participants to gain further understanding of the new Appendix to the CASS Assurance Standard and to share their perspectives directly. Those wishing to attend this event should express their interest by emailing cass@frc.org.uk. Lawyers and compliance officers advising UK payment and e-money institutions should review the proposed FRC Appendix to the CASS Assurance Standard to understand the new framework for safeguarding assurance engagements and consider submitting feedback to the consultation by November 26, 2026, to shape the final guidance for these critical audits.

Lawyers and compliance officers advising UK payment and e-money institutions should review the proposed FRC Appendix to the CASS Assurance Standard to understand the new framework for safeguarding assurance engagements and consider submitting feedback to the consultation by November 26, 2026, to shape the final guidance for these critical audits.

Source: Original reporting via the Financial Reporting Council.