How are your funds protected at TrueLayer? A guide to safeguarding

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Joe Morley, Vice President and General Manager for Europe
3 Feb 2023
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In this article, we’ll explain what safeguarding is and how TrueLayer meets legal requirements to keep your funds safe.

What is safeguarding and who does it apply to?

In simplest terms, ‘safeguarding’ means protection. It’s a key regulatory requirement for all electronic money institutions (EMIs) and payment institutions (PIs), set out in the Payment Services Regulations 2017 and Electronic Money Regulations 2011.

It ensures that customer funds are protected in the event of insolvency.

How does TrueLayer safeguard funds?

If you’re a customer of TrueLayer, your funds are legally protected.

TrueLayer safeguards your funds through ‘segregation’. This is a way of storing and managing customer funds separately, so they aren’t mixed with other business accounts or used for other purposes – for example, as collateral for investments or to provide liquidity. 

We hold customer funds in specialist bank accounts designed to be used for the purposes of safeguarding. These accounts are legally protected.

We carry out extensive due diligence before selecting a safeguarding bank partner. 

As a TrueLayer customer, you benefit from the following protections:

  • We hold your funds in a dedicated account, in your name. We call this a merchant account. 

  • Our compliance with safeguarding requirements ensures that your funds are protected, even in the unlikely event of our insolvency. In such a case, your funds would be returned to you and our creditors would have no recourse over them.

  • We reconcile all transactions in near real time, so your balance is always up to date.

  • Your funds are held separately at all times from TrueLayer’s operational funds.

How is TrueLayer regulated? 

TrueLayer is authorised to provide payment services in the UK by the Financial Conduct Authority (FCA), and in the EU by the Central Bank of Ireland (CBI).

We’re supervised by the same division of the CBI that supervises all retail and business banking in Ireland, in accordance with rules and guidelines issued by the European Banking Authority

Under the oversight of the FCA and the CBI, we’ve put in place a complete system of internal controls for managing risk, including near real-time reconciliations and regular internal and external audits, which are submitted to our regulators.

Under PSD2 legislation, we’re also required to notify our regulatory authority (the CBI) of all safeguarding accounts we hold in the EU, via a signed letter with the relevant credit institution. 

For more information on safeguarding at TrueLayer, book a call with one of our payments experts.

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