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The Financial Reporting Council (FRC) has published interim guidance for safeguarding auditors as payment and e-money institutions prepare for new regulatory requirements.
The refreshed guidance aims to support firms transitioning to the Financial Conduct Authority (FCA) supplementary regime, which begins on 7 May 2026.
The new regime introduces requirements for recordkeeping, reconciliations and governance to address weaknesses in existing safeguarding arrangements. These measures aim to strengthen consumer protection by ensuring firms comply with enhanced expectations during the first audit cycle.
The guidance provides principles for consistent assurance engagements until the FRC issues a dedicated standard. A public consultation on a permanent standard is expected in 2027, with the final version issued as an appendix to the CASS assurance standard.
Auditors are expected to exercise professional judgement while legacy rules and new requirements operate in parallel. The FRC stated the guidance is nonmandatory and does not replace the Electronic Money Regulations or Payment Services Regulations.
While the document draws on the structure of the CASS assurance standard to assist auditors with the transition, it does not mandate CASS-style audits but uses existing principles to maintain quality and consistency across the sector.
The interim measures will remain in effect until the FRC finalises the dedicated safeguarding assurance standard. This transitional resource is designed to help auditors prepare for the introduction of the supplementary regime without creating new legal requirements.
