At the heart of the FCA’s new regime for safeguarding institutions, coming into force from May 2026, is CASS 10 which sets out the requirements for a Resolution Pack. For many firms this new requirement will be one of the most significant and operationally demanding changes they face in their CASS readiness activities.
In this article, the latest in our series helping firms prepare for the May 2026 deadline, we explore the key changes under CASS10.
The Resolution Pack should be a comprehensive, structured record of a firm’s safeguarding arrangements. It reflects the FCA’s increased focus on what happens at the point of firm failure and an intention to quickly, efficiently and completely, return customer funds after an insolvency event. The resolution pack is intended to be a playbook to an insolvency practitioner to quickly understand the firm, its customers, and its operations, to aid the return of customer funds.
The FCA’s objective is clear: customer detriment should not be exacerbated by poor records, unclear processes, or over-reliance on key individuals. Like a fire evacuation plan, it isn’t in place because failure is expected, but because when it’s needed, it’s already too late to start.
What the FCA Expects in Practice
The Resolution Pack is not a theoretical construct or a static compliance document. Firms are required to prepare it, maintain it and keep it accurate at all times. Importantly, it must reflect how safeguarding operates in reality; not simply how it is described in policies or the governance framework.
At a minimum, firms should document:
- A clear overview of safeguarding arrangements, explaining how customer funds are received, held, reconciled and protected
- Full details of safeguarding accounts, including account identifiers, credit institutions and confirmation of correct account designation
- The most recent internal and external safeguarding reconciliation records
- Reconciliation methodologies, setting out how discrepancies are identified, escalated and resolved
- Key third-party relationships, including banks, insurers and operational service providers involved in safeguarding
- System access and record-keeping information, enabling data retrieval without reliance on specific individuals
- Key contacts, including senior management, auditors and relevant third parties
The FCA’s focus is on accessibility and usability. A Resolution Pack that cannot be readily understood by an insolvency practitioner will fall short of regulatory expectations.
A Living Document, Not a “One and Done”
One of the most important cultural shifts for firms is recognising that the Resolution Pack must operate as a living document. Any material changes to safeguarding arrangements – such as the addition of a new safeguarding account, system changes, or amended reconciliation logic – should trigger an immediate review and update.
This requires clear internal ownership and governance. While Compliance or Finance will often be accountable, effective Resolution Packs rely on input from Operations and IT. Firms that treat the pack as a one-off exercise will create a document that is technically complete but already insufficient the day after it is created!
EMIs vs Payment Institutions: Different Risks, Same Standard
Although the Resolution Pack requirement applies to both Electronic Money Institutions (EMIs) and Payment Institutions (PIs), the regulatory challenge is not identical.
EMIs typically safeguard funds backing outstanding e-money, resulting in more complex balance calculations, longer holding periods and tighter dependencies between issuance systems and safeguarding accounts.
Payment Institutions often operate simpler models focused on funds in transit with high transaction volumes and time-critical reconciliations introducing different operational risks.
In both cases, the FCA expects the Resolution Pack to accurately reflect the firm’s actual safeguarding model and risk profile.
Why This Matters to the FCA
The Resolution Pack requirement is grounded in repeated firm failures where deficient records and opaque safeguarding arrangements materially delayed the return of customer funds.
In its 2023 Policy Statement, the FCA stated that firms entering insolvency between Q1 2018 and Q2 2023 exhibited an average 65% shortfall between client money owed and funds actually safeguarded. The Joint Administrators’ most recent report on Rational Foreign Exchange Limited illustrates the consequences: the first distribution returned only 7.7p in the pound.
For the FCA, time equals harm, and uncertainty at the point of failure directly increases customer detriment. Insolvency is not an acceptable testing ground for safeguarding arrangements.
The Resolution Pack is intended to remove that uncertainty. It requires safeguarding arrangements to be clearly documented, readily accessible and kept up to date, reducing dependence on key individuals and avoiding delay when control of a firm changes hands.
It also enables effective supervisory challenge. Where a Resolution Pack does not align with reconciliations, regulatory reporting or audit outcomes, those deficiencies will be apparent – and difficult to justify.
Key Considerations for Firms
- Begin early: Resolution Packs often require data from multiple systems and teams. Implementation timelines are frequently underestimated.
- Pressure-test the pack: If an independent reviewer cannot follow the safeguarding trail, an insolvency practitioner will struggle.
- Embed it into change management: Safeguarding-related changes should automatically prompt a Resolution Pack update.
- Treat it as a strategic asset: A robust Resolution Pack supports audits, supervisory engagement and, ultimately, customer confidence.
Final Thoughts
The Resolution Pack is more than a regulatory requirement. It is a practical test of how well a firm understands, documents and controls its safeguarding arrangements. Firms that invest in getting it right will not only meet the FCA’s expectations but will also be better positioned to manage risk, respond to scrutiny and scale with confidence.
If you’d like to discuss any aspect of this article or how Cosegic can support with the new regulations please get in touch.
