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CASS 1.2 General application: who? what?

General application: who?

CASS 1.2.1GRP

The rules in CASS 1.2 set out the maximum scope of this sourcebook. The application of CASS is modified for certain activities by CASS 1.4. Also particular chapters or sections of CASS may have provisions which limit their application.

CASS 1.2.2RRP

CASS applies to every firm, except as provided for in CASS 1.2.3 R, with respect to the carrying on of:

  1. (1)

    all regulated activities except to the extent that a provision of CASS provides for a narrower application; and

  2. (2)

    unregulated activities to the extent specified in any provision of CASS.

CASS 1.2.3RRP

CASS does not apply to:

  1. (1)

    an ICVC; or

  2. (2)

    an incoming EEA firm other than an insurer, with respect to its passported activities; or

  3. (3)

    a UCITS qualifier.

CASS 1.2.4RRP

CASS 2 (Custody rules), CASS 3 (Collateral rules) and CASS 4 (Client money and mandates: designated investment business) do not apply to:

  1. (1)

    an authorised professional firm with respect to its non-mainstream regulated activities; or

  2. (2)

    the Society.

CASS 1.2.5RRP

1CASS 5 (Client money and mandates: insurance mediation activity) does not apply to an authorised professional firm with respect to its non-mainstream regulated activities, which are insurance mediation activities, if:

  1. (1)

    the firm's designated professional body has made rules which implement article 4 of the IMD;

  2. (2)

    those rules have been approved by the FSA under section 332(5) of the Act; and

  3. (3)

    the firm is subject to the rules in the form in which they were approved.

CASS 1.2.6G

Authorised professional firms should be aware of PROF 5.2(Nature of non-mainstream regulated activities).

General application: what?

CASS 1.2.7GRP
  1. (1)

    The approach in CASS is to ensure that the rules in a chapter are applied to firms in respect of particular regulated activities or unregulated activities.

  2. (2)

    The scope of the regulated activities to which CASS applies is determined by the description of the activity as it is set out in the Regulated Activities Order. Accordingly, a firm will not generally be subject to CASS in relation to any aspect of its business activities which fall within an exclusion found in the Regulated Activities Order. The definition of designated investment business includes, however, activities within the exclusion from dealing in investments as principal in article 15 of the Regulated Activities Order (Absence of holding out etc).

  3. (3)

    CASS 2 (Custody rules), CASS 3 (Collateral rules) and CASS 4 (Client money and mandates: designated investment business) apply in relation to regulated activities, conducted by firms, which fall within the definition of designated investment business.

  4. (4)

    CASS 5 (Client money and mandates: insurance mediation activity) applies in relation to regulated activities, conducted by firms, which fall within the definition of insurance mediation activities.1

Application for private customers, intermediate customers and market counterparties

CASS 1.2.8GRP
  1. (1)

    CASS applies directly in respect of activities conducted with or for market counterparties as well as with or for customers. The term client refers both to market counterparties and to customers.

  2. (2)

    In CASS 2 (Custody rules), CASS 3 (Collateral rules) and CASS 4 (Client money and mandates: designated investment business), the term customer refers toprivate customers and intermediate customers, but not market counterparties. Where relevant, each of the provisions of CASS makes clear whether it applies to activities carried on with or for private customers, intermediate customers, or both.

  3. (3)

    CASS 5 (Client money and mandates: insurance mediation activity) does not generally distinguish between different categories of client. However, the term retail customer is used for those whom additional obligations are owed, rather than the term private customer. This is to be consistent with the client categories used in relation to the obligations in ICOB in relation to insurance mediation activities.1

CASS 1.2.9G

Firms are reminded that the definition of inter-professional business does not include safekeeping and administration of assets or agreeing to carry on that activity: CASS will apply in this context (and will apply to the holding of money for clients in connection with inter-professional business).