CASS 15 Software for Payments Firms: Relevant Funds, Reconciliation and Records

What CASS 15 covers and who it binds

CASS 15 is the chapter of the FCA's Client Assets sourcebook dealing with relevant funds held by payment institutions and electronic money institutions. It brings safeguarding into the CASS architecture that investment firms have operated under for years through CASS 6 and CASS 7, and it applies the same evidential philosophy: the firm must be able to prove, continuously, that client money is where it is supposed to be.

The binding population is payment institutions, electronic money institutions, and credit unions issuing e-money. Scope attaches to relevant funds, meaning sums received from or for a payment service user for the execution of a payment transaction, and sums received in exchange for electronic money issued.

Firms that already operate CASS 6 or CASS 7 controls elsewhere in the group have an advantage in culture and vocabulary, but not in systems. The reconciliation populations, the timing rules, and the reporting artefacts differ enough that reusing an investment-side CASS engine without adaptation typically produces the wrong answer.

Identifying relevant funds is the hard part

The reconciliation is the visible obligation. The prior question, which is harder and less discussed, is which sums are relevant funds at any given moment.

Money received from a payment service user is a relevant fund. Money that has been paid out to the payee is not. Money received in advance of a payment order, money held pending settlement, money sitting with an acquirer, money in transit through an agent, and money representing the firm's own fees, all attract different treatment, and the treatment can change during the day.

Software that treats the safeguarding account balance as the answer will always be reconciling to the wrong target. A CASS 15 engine has to model the lifecycle, hold a defensible view of the relevant funds obligation at each point, and reconcile the segregated balance against that obligation rather than against a static ledger total.

The same logic applies to fees. Where the firm is entitled to deduct its charges, the deduction must be identifiable, timed correctly, and evidenced, or a legitimate fee withdrawal is indistinguishable from an unexplained outflow of client money.

The reconciliation discipline CASS 15 expects

The internal reconciliation tests the firm's own records: the sum of individual customer entitlements against the firm's recorded safeguarding obligation. The external reconciliation tests those records against balances confirmed by the safeguarding institution and any third party holding relevant funds.

Both are expected on each business day for firms with any material flow. Both must be performed, recorded, reviewed, and retained. Discrepancies must be resolved, and where resolution reveals a shortfall it must be funded from the firm's own money immediately.

The operational reality that firms underestimate is data timeliness. A daily external reconciliation depends on receiving a daily statement from every relevant institution. Where a counterparty reports weekly, the firm has a control gap that no software can close by itself, and the correct response is to record the gap as an exception and address it commercially rather than to quietly reconcile against stale data.

Records, accounts, and the resolution pack

CASS 15 requires records and accounts that enable the firm, at any time and without delay, to distinguish relevant funds held for one payment service user from those held for another, and from the firm's own money. The phrase that matters is without delay. A record that requires assembly is not a record for these purposes.

The resolution pack extends the same principle to failure. It must let an insolvency practitioner identify relevant funds and the customers entitled to them quickly enough that a distribution is practicable. That means current bank mandates, current counterparty details, current customer entitlement data, and current descriptions of the safeguarding arrangements.

Packs assembled as documents drift. Packs generated from live operational data cannot, because they are a rendering of the current state rather than a snapshot of a past one.

What Safeheld provides for CASS 15

Safeheld models the relevant funds obligation across the payment and e-money lifecycle rather than reconciling to a static balance, and it does so from the source data the firm already receives.

Internal and external reconciliations run continuously and are evidenced separately. Breaks are investigated autonomously, with the supporting records and the reasoning attached, so that the review queue contains judgement calls rather than clerical work.

Every run is sealed with a SHA-256 Merkle root and is independently verifiable. Records, monthly returns, resolution packs, and audit evidence are all generated from those sealed runs, which means the firm has one CASS 15 record rather than several partially reconciled ones.

Frequently asked questions

Is CASS 15 the same as safeguarding under PS25/12?

They are two views of the same regime. PS25/12 is the policy statement that introduced the strengthened safeguarding requirements; CASS 15 is the Handbook chapter in which the client assets requirements for payments and e-money sit.

Do CASS 6 and CASS 7 systems work for CASS 15?

Not without adaptation. The evidential philosophy carries across, but the relevant funds population, the timing rules, and the reporting artefacts differ enough that an unmodified investment-side engine reconciles to the wrong target.

When must relevant funds be segregated?

Relevant funds must be placed into a safeguarding account promptly, and in any event by the close of the business day following the day on which they were received, unless another permitted safeguarding method applies.