Safeguarding Audit requirements
Safeguarding is the primary customer protection measure for payment services and e-money firms, hence it is one of the FCA’s main areas of focus for our sector. A Safeguarding Audit is a mandatory requirement for all E-Money Institutions (EMIs) and any Payments Institution that is required to arrange an audit of its annual accounts under the Companies Act 2006.
As required by the FCA, you must have a suitably qualified and experienced independent firm audit your safeguarding arrangements at least once annually. Having undertaken numerous safeguarding audit we are well positioned to support firms with this. Our audit scope has been designed to meet the FCA’s requirements whilst minimising the burden placed on compliance teams. The scope of our audit has also been shared with the FCA, so you can take comfort that it will cover those issues that the FCA is most interested in, as set in Chapter 10 of the Approach Document.
Following the audit we will provide a draft summary of our findings, giving you an opportunity to provide clarification where appropriate. You will then be issued with a detailed Safeguarding Audit Report which will contain our opinion on whether your firm has met the FCA’s expectations throughout the audit period; outline our findings; identify any shortcomings; and provide recommendations for action to address them.
Safeguarding Audit process
1. Project initiation workshop
Workshop with relevant personnel to understand your firm’s business model and safeguarding arrangements and discuss the process with you.
2. Online questionnaire
Using our specialist online regtech system as part of the audit process, to simplify matters for you by making it easier to supply the information required for the audit.
3. Review of policies, procedures and records
This includes a review of Method of safeguarding | Bank account acknowledgment | Identification of relevant funds | Systems & Controls | Review of wind-down plan | Insurance/guarantee wording | Review of stress testing | Terms and Conditions | Board/senior management engagement & signoff
4. Review reconciliation processes
Sample checking of safeguarding reconciliations at your firm for the previous 12 months, to check process has been followed and discrepancies identified and addressed.
5. Interviews with relevant staff
Discussions to verify how the stated process works in practice, and clarify any points or areas of investigation arising from audit.
6. Draft and final report
Providing you with a detailed report to summarise our findings; identify any shortcomings; and provide recommendations for action to address them.
Why choose Cosegic?
Our 360 degree perspective of regulatory affairs
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Our 360 degree perspective of regulatory affairs
Our wide range of financial sector experts come together on a regular basis to discuss their interactions with the FCA and the regulatory trends that they are seeing, providing us with a more informed understanding of the FCA than our competitors.
Direct, proportionate advice
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Direct, proportionate advice
Our unique perspective means we really do have our fingers on the pulse of regulation, which helps us to ensure that the advice we offer is practical, helpful and directly proportionate to our clients’ needs.
Our understanding of the role of compliance in firms
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Our understanding of the role of compliance in firms
We have watched the evolution of compliance over the past twenty years and understand that compliance must now become a core part of how financial services carry out their businesses in order for them to be successful.
Compliance confidence for visionary growth
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Compliance confidence for visionary growth
In recognising this, our services have been built in a way that can help you navigate regulation ensuring you will keep your vision and objectives intact. Our breadth of experience allows us to balance your business objectives with your compliance requirements.
