AUTH 3.14 Specific obligations: applicants seeking to hold or control client money

Unlike safeguarding and administering assets, holding or controlling client money is not a regulated activity in the Regulated Activities Order. As in AUTH 3.7.3 G, the FSA controls this activity by using requirements on a firm's Part IV permission.

1. (1)

   An applicant seeking to hold or control client money must complete the relevant sections of the application forms for Part IV permission. The applicant must be able to demonstrate to the FSA that it can satisfy, and continue to satisfy, the threshold conditions (see AUTH 3.8.1 G to AUTH 3.8.3 G) should the application for Part IV permission be granted. This will include demonstrating that it is ready, willing and organised to comply with the relevant requirements in CASS 4 (Client money).

2. (2)

   If an applicant is not able to demonstrate to the FSA that it can satisfy, and continue to satisfy, the threshold conditions to hold or control client money, but its application for Part IV permission is granted, the FSA will impose a requirement on the permission to the effect that the firm will not be able to hold, or control, client money.