Spring 2026 payments reforms one month in
In short: Spring 2026 payments reforms are one month into live operation. SI 2025/688 came into force on 28 April 2026, substituting regulation 51 of the PSRs 2017 and inserting regulations 51A to 51D. The FCA’s PS25/12 Supplementary Safeguarding Regime came into force on 7 May 2026.
UK authorised payment institutions and electronic money institutions are now one month into implementing two spring 2026 payments reforms. SI 2025/688 came into force on 28 April 2026 and rewrote the termination of framework contracts under the Payment Services Regulations 2017. The FCA’s PS25/12 Supplementary Safeguarding Regime came into force on 7 May 2026 and overlaid CASS 10A, CASS 15, SUP 3A and SUP 16.14A on the existing safeguarding duties in the PSRs 2017 and the Electronic Money Regulations 2011.
The two reforms behind the spring 2026 payments package
The architecture of each of the spring 2026 payments reforms is set out in two earlier posts on this site. The framework contract termination rules under SI 2025/688 are covered at Framework contract termination: new PSRs 2017 regs 51 to 51D from 28 April 2026. The supplementary safeguarding regime and the FCA Approach Document v8 consolidation are covered at FCA Approach Document v8: safeguarding regime consolidated, May 2026. The pre-commencement architecture sits at FCA Safeguarding: Six Weeks to the Supplementary Regime.
First, the 28 April framework changes apply only to framework contracts entered into on or after that date. Older contracts sit on the prior regime. Firms run two stacks of customer relationships against two different termination rules until the older book has rolled. Second, the 7 May Supplementary Safeguarding Regime is the interim step. The FCA has been clear that an end-state CASS-style Post-Repeal Regime will follow once the legislative changes catch up. The interim rules are the live position; they are not the destination.
Where the spring 2026 payments reforms touch each other
The two reforms read independently in the regulator material. They do not read independently in practice. Two operational pinch points pull them together.
The first is the link between de-banking and customer-fund safeguarding. HM Treasury designed the 28 April reforms in part to address concerns about banks closing payment-firm accounts at short notice without explanation. The recipient of that protection is now also subject to a stricter safeguarding regime on the funds it holds. A PSP that terminates a customer mid-relationship has to return safeguarded funds in line with the regime; a PSP that loses its own bank account at short notice has to safeguard customer funds against the disruption. The two ends of the same problem now sit under two sets of rules that have to be read together.
The second is reporting cadence. SUP 16.14A introduces monthly safeguarding returns. The termination changes do not carry a reporting obligation of their own, but a PSP that experiences a spike in terminations, or a spike in complaints about terminations under the Consumer Duty, will have to explain that pattern alongside the monthly safeguarding return. The narrative the PSP runs to its supervisor will combine both regimes whether the regime documents do or not.
Key findings: the spring 2026 payments reforms in numbers
- SI 2025/688 substituted regulation 51 of the PSRs 2017 and inserted regulations 51A to 51D, all in force on 28 April 2026 for contracts entered into on or after that date. Source: The Payment Services and Payment Accounts (Contract Termination) (Amendment) Regulations 2025.
- The notice period for termination of an indefinite-period framework contract is now 90 days. Regulation 51A requires the PSP to give reasons in writing in a defined form. Source: SI 2025/688, regulation 3.
- SI 2025/688 also amended regulations 25 and 26 of the Payment Accounts Regulations 2015 to align the notice period and reasons-giving duty for personal current accounts. Source: SI 2025/688, regulation 2.
- The Supplementary Safeguarding Regime under PS25/12 came into force on 7 May 2026 and applies to authorised PIs (except solely PISP/AISPs), authorised EMIs, small EMIs and credit unions issuing e-money. Small PIs may opt in. Source: PS25/12, Policy Statement published 7 August 2025.
- The May 2026 v8 of the FCA’s Payment Services and Electronic Money Approach Document consolidates the safeguarding rules in CASS 10A and CASS 15, the audit and monthly returns in SUP 3A and SUP 16.14A, and the account termination updates from SI 2025/688 in one place. Source: FCA Key Publications page, last updated 7 May 2026.
| Spring 2026 reform | What the regulator has done | In force |
|---|---|---|
| Framework contract termination (PSRs 2017 regulation 51 and new regulations 51A to 51D, and PARs 2015 regulations 25 and 26) | HM Treasury made SI 2025/688 under sections 3(1) and 84(2) of the Financial Services and Markets Act 2023. The SI substituted regulation 51 and inserted regulations 51A to 51D, extending the notice period to 90 days and requiring reasons in writing in a defined form. | 28 April 2026, for framework contracts entered into on or after that date. |
| Supplementary Safeguarding Regime (CASS 10A, CASS 15, SUP 3A, SUP 16.14A) | The FCA published PS25/12 on 7 August 2025, following CP24/20. The FCA Handbook Instrument 2025/38 made the rule changes. PS25/12 sets the interim Supplementary Regime as the live position pending the end-state Post-Repeal Regime. | 7 May 2026. |
| Payment Services and Electronic Money Approach Document v8 | The FCA published the consolidated v8 on or around 7 May 2026. The v8 brings safeguarding, resolution packs, audit and monthly returns, and the account termination updates into one document. | 7 May 2026, replacing the November 2024 v7 and the March 2026 interim consolidation. |
Senior-manager accountability under the spring 2026 reforms
The thread that runs through the spring 2026 payments reforms is personal accountability at senior-manager level. The Supplementary Safeguarding Regime makes the senior manager responsible for safeguarding the load-bearing point of compliance. Daily reconciliations, the resolution pack, the monthly SUP 16.14A return, the annual safeguarding audit and the books-and-records discipline all sit under one named accountability. The termination reforms add a parallel set of records, all of which must survive supervisory scrutiny and all of which feed into the same accountability picture. A firm that allocates termination decisions to its operations team and safeguarding compliance to its finance team, with no senior-manager line connecting the two, will misjudge where accountability lands when something goes wrong.
Substantive preconditions sit underneath the operational steps. The interim safeguarding regime sits on top of the existing safeguarding duties in the Payment Services Regulations and the Electronic Money Regulations 2011, not in place of them. A firm that runs daily reconciliations, monthly returns and annual audits but fails to segregate customer funds in line with the underlying duty will be non-compliant on the duty even if the operational scaffolding is in good order. The reason-giving duty under regulation 51A sits on top of the existing prohibition on closing a framework contract without proper grounds, not in place of it. The operational steps do not displace the substantive obligations they wrap. Both reforms are easier to read as one compliance posture because the substantive duty and the operational evidence have to land together.
The Consumer Duty cuts across the same ground. A termination communication that meets the regulation 51A reason-giving standard may still fall short of the Consumer Duty’s clear, fair and not misleading standard if it leaves the customer unable to understand what to do next. PSPs that have built their termination process around the new SI without re-running it against the Consumer Duty will produce records that are technically compliant on one limb and exposed on another. For practitioner notes on the cross-sector pattern, the spring 2026 payments reforms sit alongside the analysis at APP fraud reimbursement and cross-sector liability. Our payments product, safeguarding and scheme governance page sets out our work for PIs and EMIs on conduct rules and the FCA’s supervisory expectations.
Viewpoint
The spring 2026 payments reforms read as two reforms in the regulator material and as one in practice. The connective tissue is senior-manager accountability and the requirement that the books and records produced by one regime can be read against the books and records produced by the other. The interim safeguarding regime is the live position and not the destination; the FCA has signalled that the end-state CASS-style Post-Repeal Regime will follow once the legislative groundwork is in place. Firms that have built compliance projects around the architecture of each reform separately may need to revisit the work against the operational interaction the FCA has already set out in the Approach Document v8.
Frequently asked questions
Do the spring 2026 payments reforms apply to all payment institutions?
The framework contract termination changes under SI 2025/688 apply to all PSPs that conclude framework contracts under the PSRs 2017, including authorised PIs, small PIs and AISPs registered under regulation 17. The Supplementary Safeguarding Regime under PS25/12 applies to authorised PIs other than those solely providing payment initiation or account information services, to authorised and small EMIs, and to credit unions issuing e-money. Small PIs can opt in to the safeguarding rules but are not required to.
When does the 90-day notice rule apply?
The 90-day notice rule under the substituted regulation 51 applies to framework contracts concluded for an indefinite period and entered into on or after 28 April 2026. Framework contracts entered into before that date sit on the prior regime. PSPs will be running parallel termination rules across their book until the older contracts have rolled or been replaced. The Payment Accounts Regulations 2015 amendments aligned the notice period and reasons-giving duty for personal current accounts on the same terms.
What does the Supplementary Safeguarding Regime change in practice?
The interim Supplementary Safeguarding Regime sits on top of the existing safeguarding duties in the PSRs 2017 and the EMRs 2011. It adds the rules in CASS 10A and CASS 15 on books and records, daily reconciliations and resolution packs; the audit obligations in SUP 3A, with a £100,000 customer-funds threshold carve-out from the annual audit requirement; and the monthly safeguarding returns in SUP 16.14A. The architecture is set out in PS25/12 and is consolidated in the FCA’s Approach Document v8.
How do the two reforms interact with the Consumer Duty?
PSPs have to test termination communications under the new regulation 51A against the Consumer Duty as well as the regulation 51A reasons-giving standard. A record that satisfies one limb does not necessarily satisfy the other. The safeguarding records produced under CASS 15 and SUP 16.14A feed into the supervisor’s view of how a firm is treating its customers under the Consumer Duty, particularly where termination patterns or complaint patterns cover the same population of customers.
When will the Post-Repeal Regime follow?
The Post-Repeal Regime is the end-state CASS-style position that will replace the safeguarding rules in the PSRs 2017 and the EMRs 2011 once the legislative changes have been made. The FCA has not committed to a date for commencement and PS25/12 confirms the interim Supplementary Regime as the live position pending the legislative work. For the spring 2026 payments reforms this means firms should design safeguarding systems for the interim regime as the current obligation and plan for the Post-Repeal Regime as a further consolidation once the underlying primary regulations are replaced.
