Regulatory Reporting for Payment Institutions and EMIs: What You Must Submit

Introduction

Payment institutions (PIs) authorised under the Payment Services Regulations 2017 and electronic money institutions (EMIs) authorised under the Electronic Money Regulations 2011 have specific regulatory reporting obligations that reflect the unique nature of their businesses. This guide covers the key returns, submission requirements and practical considerations for PIs and EMIs.

Payment Services Regulatory Return (FSA071)

The primary regulatory return for PIs and EMIs is the FSA071 — Payment Services Return. This return collects data on the firm's payment services activities and is submitted via the FCA's RegData platform. Key data points include:

• Transaction volumes and values: The total number and value of payment transactions processed during the reporting period, broken down by payment service type (e.g., money remittance, payment initiation, account information services).
• Revenue from payment services: Total income derived from regulated payment services activities.
• Safeguarded funds: The total value of relevant funds held at the end of the reporting period and the safeguarding method used (segregation in a designated account, insurance policy or guarantee, or investment in secure, liquid low-risk assets).
• Outstanding e-money (EMIs only): The total value of e-money in circulation at the end of the reporting period.
• Agent and distributor information: Details of any agents or distributors through which the firm provides payment services, including volumes processed through agent networks.

The FSA071 is typically submitted annually, with a deadline of 30 business days after the firm's accounting reference date. However, some larger firms may be required to submit more frequently.

Safeguarding Reporting

Safeguarding is the single most important regulatory obligation for PIs and EMIs, and accurate reporting is essential. In addition to the data captured in the FSA071, firms should be prepared to provide the FCA with detailed information on their safeguarding arrangements at any time. This includes:

• A breakdown of safeguarded funds by safeguarding method
• Details of safeguarding bank accounts, including bank name, account numbers and acknowledgement letter dates
• Daily reconciliation records showing the comparison between safeguarded funds and the firm's safeguarding ledger
• Details of any discrepancies identified and the actions taken to resolve them

The FCA has indicated that it intends to enhance safeguarding reporting requirements, particularly in light of the PS25/4 policy statement on safeguarding reform. Firms should monitor developments closely and prepare for potential additional reporting obligations.

Complaints Reporting

All PIs and EMIs with retail customers must submit complaints data bi-annually via the RegData platform. The complaints return covers:

• Total number of complaints received during the six-month reporting period
• Complaints broken down by product or service category
• The root cause of complaints (e.g., service quality, delays, fees, fraud)
• Outcomes of complaints (upheld, partially upheld, rejected)
• Compensation paid to complainants
• Referrals to the Financial Ombudsman Service (FOS) and FOS outcomes

The FCA uses complaints data to identify trends, assess consumer outcomes and prioritise supervisory attention. A sudden spike in complaints — or a pattern of complaints in a particular category — may trigger enhanced supervision.

Financial Data and Capital Adequacy

PIs and EMIs must submit financial data demonstrating that they meet their minimum capital requirements. For authorised payment institutions, the minimum own funds requirement is calculated using one of three methods (Method A, B or C) based on the firm's payment transaction volumes. For EMIs, the minimum own funds requirement is the higher of the initial capital requirement (€350,000) and 2% of outstanding e-money.

The annual financial return captures:

• Balance sheet information
• Profit and loss data
• Own funds calculation
• Capital adequacy assessment

Firms must ensure that their own funds calculation is accurate and that they maintain a buffer above the regulatory minimum to absorb fluctuations. The FCA may challenge firms that operate with minimal headroom.

Anti-Money Laundering Reporting

While not an FCA return per se, PIs and EMIs have AML reporting obligations to the National Crime Agency (NCA) through the submission of suspicious activity reports (SARs) and to HMRC through their registration obligations under the Money Laundering Regulations 2017. Firms should also be aware of the FCA's annual financial crime return (REP-CRIM), which collects data on the firm's financial crime risks, controls and suspicious activity reporting volumes.

Notifications and Event-Driven Reporting

In addition to periodic returns, PIs and EMIs must notify the FCA of certain events as they occur. These include:

• Changes in directors, senior management or qualifying shareholders — must be notified via the appropriate FCA form before the change takes effect (for approved persons) or promptly afterwards.
• Material changes to the business model — including new payment services, new jurisdictions, significant changes to agent networks or material outsourcing arrangements.
• Breaches of regulatory requirements — firms must notify the FCA promptly if they breach any condition of their authorisation, including capital adequacy thresholds, safeguarding requirements or conduct obligations.
• Cyber incidents and operational disruptions — significant operational incidents, including cyber attacks, must be reported to the FCA without undue delay.
• Fraud incidents — material fraud losses or patterns of fraud affecting customers should be reported to the FCA.

Practical Compliance Framework

To manage regulatory reporting effectively, PIs and EMIs should implement the following:

• Reporting calendar: Maintain a centralised calendar of all return deadlines with internal milestones for data collection, validation and sign-off.
• Data automation: Where possible, extract reporting data directly from core systems (payment platforms, accounting software, safeguarding ledgers) to reduce manual error.
• Reconciliation: Reconcile reporting data with underlying records before submission. Cross-check transaction volumes with platform data, safeguarding figures with bank statements and complaints data with the complaints register.
• Four-eyes review: Implement a dual review process for all returns before submission.
• Senior management sign-off: The relevant senior manager (typically the SMF16 or SMF17) should formally approve each return.
• Record retention: Retain all working papers, source data and sign-off records for at least six years.

Common Mistakes

The most common reporting mistakes for PIs and EMIs include:

• Miscalculating the own funds requirement by using the wrong calculation method or incorrect transaction data
• Reporting safeguarded funds as of the wrong date (the figure should reflect the position at the reporting period end)
• Failing to include agent transaction volumes in the firm's overall figures
• Submitting complaints data that does not reconcile with the firm's internal complaints register
• Missing the submission deadline and incurring automatic penalties

Regulatory Outlook

The FCA is actively enhancing its approach to payment services supervision, with increased focus on safeguarding, consumer protection and operational resilience. Firms should expect reporting requirements to expand in the coming years, particularly around safeguarding (following PS25/4), fraud prevention and operational incident reporting. Building scalable, automated reporting processes now will position firms well for future requirements.