FCA Oversight of TPMA Providers: What Law Firms Need to Know in 2025
- Jon East
- Aug 6
- 3 min read
Updated: Aug 7
Understand the FCA’s role in regulating TPMA providers, including client fund safeguarding, capital requirements, and CASS 7.14 compliance.
 Written by Jon East |  Contributor Daniel Dunne | Latest edited Aug 2025 5 min read. |
Table of contents
Welcome to the third instalment of our mini five part series on Third Party Managed Account.
Introduction
When law firms hold client money, they answer to the SRA. But when funds are held through a TPMA (Third Party Managed Account), the responsibility shifts to the FCA-regulated provider.
This change isn’t just cosmetic. It comes with a higher standard of financial conduct, transparency, and resilience—backed by UK financial regulation.
Here’s what legal professionals need to know about the FCA’s oversight of TPMA providers, and why it matters.
What Makes an FCA-Regulated TPMA Provider Different?
Unlike a solicitor’s client account, TPMA providers must comply with strict regulations designed to protect client funds:
CASS 7.14 – Client Money Rules
The FCA’s Client Asset Sourcebook (CASS) requires:
Clear segregation of client money
Safeguarding against misuse or loss
Daily reconciliation of balances
TPMA providers must maintain ring-fenced accounts, ensuring client money is never commingled with the firm’s own funds.
Capital and Liquidity Requirements
TPMA providers are often categorised as Payment Institutions or EMIs (Electronic Money Institutions). Both must meet:
Minimum capital thresholds (varies by licence type and volume)
Ongoing liquidity monitoring
Wind-down contingency planning
Operational Resilience & Risk Management
The FCA requires robust operational processes:
System audits
Anti-fraud technology
Business continuity planning
This means funds are better protected from internal error, fraud, or system failure.
What Does This Mean for Law Firms?
Added Client Protection
Client funds are held in safeguarded, off-balance-sheet accounts—eliminating the risk of internal misuse.
Independent Oversight
Your firm no longer directly holds or manages money—removing you from the financial risk equation.
Audit-Ready Transactions
Firms benefit from digital audit trails, third-party reporting, and clear dispute resolution processes.
Peace of Mind for Clients and Referrers
FCA oversight builds trust and demonstrates that your firm takes fund security seriously.
“The FCA applies a higher bar for client fund protection—TPMAs bring that standard to the legal sector.” — Daniel Dunne - Head of Legal, Partnerships, Interpolitan
“Solicitors aren’t banks and they shouldn’t need to operate like one.” — Robin Bates - Assistant Vice President, Escrow, Interpolitan
Real-World Case Studies: Misappropriation & Risk in Legal Client Accounts - Sally Hutchings / Morr & Co (2025)
FCA Oversight of TPMA Providers
£1.5 million used outside scope of retainer
What happened: Sally Hutchings allowed a client to continue using the firm’s client account as a banking facility after the legal retainer had ended, breaching multiple SRA Accounts Rules over an extended period.
Regulatory outcome: Hutchings was fined £13,500 and issued a rebuke by the SRA for serious account misuse.
Relevance to TPMA: Demonstrates the danger of client accounts being misused informally or without proper oversight something that cannot happen under FCA-regulated TPMA conditions.
Source: Legal Futures
Ready to Protect Your Clients and Your Firm?
Interpolitan provides fully aligned FCA-regulated TPMA services for legal professionals across the UK and internationally. We help mitigate risk, simplify compliance, and future-proof your operations.
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