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CASS 1.4 Application: particular activities

Occupational pension scheme firms (OPS firms)

CASS 1.4.1R

In the case of OPS activity undertaken by an OPS firm, CASS applies with the following general modifications:

  1. (1)

    references to customer are to the OPS or welfare trust, whichever fits the case, in respect of which the OPS firm is acting or intends to act, and with or for the benefit of which the relevant activity is to be carried on; and

  2. (2)

    if an OPS firm is required by any rule in CASS to provide information to, or obtain consent from, a customer, that firm must ensure that the information is provided to, or consent obtained from, each of the trustees of the OPS or welfare trust in respect of which that firm is acting, unless the context requires otherwise.

Stock lending activity with or for clients3

CASS 1.4.2G
1
  1. (1)

    The custody chapter and the client money chapter apply in respect of any stock lending activity that is undertaken with or for a client3 by a firm. 1

    33333
  2. (2)

    The collateral rules apply, where relevant, in respect of stock lending activity.1

    3

Corporate finance business

CASS 1.4.3G
1
  1. (1)

    The custody chapter and the client money chapter apply in respect of corporate finance business that is undertaken by a firm.1

    3333
  2. (2)

    The collateral rules apply, where relevant, in respect of corporate finance business.1

    3

Oil market activity and energy market activity

CASS 1.4.4G
1
  1. (1)

    The custody chapter and the client money chapter apply in respect of oil market activity and other energy market activity that is undertaken by a firm.1

    3333
  2. (2)

    The collateral rules apply, where relevant, in respect of energy market activity.1

    3

Appointed representatives and tied agents2

CASS 1.4.5G
  1. (1)

    Although CASS does not apply directly to a firm's appointed representatives, a firm will always be responsible for the acts and omissions of its appointed representatives in carrying on business for which the firm has accepted responsibility (section 39(3) of the Act). In determining whether a firm has complied with any provision of CASS, anything done or omitted by a firm's1 appointed representative (when acting as such) will be treated as having been done or omitted by the firm (section 39(4) of the Act1). Equally, CASS does not apply directly to tied agents. A MiFID investment firm will be fully and unconditionally responsible for the acts and omission of the tied agents that it appoints. 2

    11
  2. (2)

    Firms should also refer to SUP 12 (Appointed representatives), which sets out requirements which apply to firms using appointed representatives and tied agents2.

Depositaries

CASS 1.4.6R

The client money chapter 1 does 3not apply to a depositary when acting as such.

133
CASS 1.4.6AG

5Firms acting as trustee or depositary of an AIF are reminded of the obligations in FUND 3.11 (Depositaries) and Chapter IV (Depositary) of the AIFMD level 2 regulation which apply in addition to those in CASS.

CASS 1.4.6BG

9Firms acting as trustee or depositary of a UCITS are reminded of the obligations in COLL 6.6B (UCITS depositaries) and in the UCITS level 2 regulation, 10which apply in addition to those in CASS.

CASS 1.4.7R

Subject to CASS 1.4.6 R, 5 CASS applies to a depositary, when acting as such, with the following general modifications9: 'client' means 'trustee', 'trust', 'AIF', 'AIFM acting on behalf of the AIF', ‘UCITS scheme’, ‘authorised fund manager acting on behalf of the UCITS scheme’, 9or 'collective investment scheme', as appropriate.5

55
CASS 1.4.8R

[deleted]7

CASS 1.4.8AR
  1. (1)

    7The application of CASS for a trustee firm acting as a depositary is set out in CASS 1.4.6 R and CASS 1.4.7 R.

  2. (2)

    The application of CASS for a trustee firm that is not acting as a depositary is limited as follows:

    1. (a)

      the mandate rules apply;

    2. (b)

      for MiFID business, the custody chapter and the client money chapter apply; and

    3. (c)

      for business that is not MiFID business, the custody chapter and the client money chapter apply only to trustee firms acting as trustees of personal pension schemes or stakeholder pension schemes, including SIPPs.

  3. (3)

    To the extent that CASS applies to a trustee firm, it applies with the following general modification: 'client' means 'relevant trustee', 'trust', or 'beneficiary', as appropriate.

Auction regulation bidding

CASS 1.4.9R

4Where a firm carries on auction regulation bidding it may elect to comply with CASS (but not CASS 5) in respect of this activity, subject to the general modifications in CASS 1.4.10 R.

CASS 1.4.10R

4Where a firm has made an election in accordance with CASS 1.4.9 R, CASS is modified so that in relation to that firm:

  1. (1)

    each reference to:

    1. (a)

      designated investments;

    2. (b)

      safe custody assets; and

    3. (c)

      contingent liability investments;

    includes a reference to a two-day emissions spot;

  2. (2)

    each reference to designated investment business includes auction regulation bidding;

  3. (3)

    each reference to safeguarding and administering investments, including safeguarding and administration of assets (without arranging) and arranging safeguarding and administration of assets, includes those activities where they are carried on in relation to a two-day emissions spot; and

  4. (4)

    the reference in CASS 6.2.3A R to an 'emissions auction product that is a financial instrument' includes a two-day emissions spot;

CASS 1.4.11G

4The effect of CASS 1.4.10 R is that when a firm makes an election in accordance with CASS 1.4.9 R:

  1. (1)

    a two-day emissions spot falls within the scope of each chapter in CASS (save for CASS 5), for example:

    1. (a)

      the reference in CASS 6.1.1 R (1)(b) to safeguarding and administering investments is modified to include the activity of safeguarding and administering a two-day emissions spot; and

    2. (b)

      any money that the firm receives or holds for or on behalf of a client in the course of or in connection with its auction regulation bidding activities will be treated as client money and so will need to be dealt with in accordance with the client money rules; and

  2. (2)

    that election also has effect in relation to rules and guidance elsewhere in the Handbook, including:

    1. (a)

      COBS 3 (Client categorisation);

    2. (b)

      COBS 6.1.7 R (Information concerning safeguarding of designated investments belonging to clients and client money);

    3. (c)

      COBS 6.1.11 R (Timing of disclosure);

    4. (d)

      COBS 16.4 (Statements of client designated investments or client money);

    5. (e)

      SUP 3 (Auditors);

    6. (f)

      SUP 10A.4.4 R (the table of controlled functions) and SUP 10A.7.9 R (CASS operational oversight function (CF10a));8

    7. (fa)

      SUP 10C.4.3R (Table of FCA controlled functions for relevant authorised persons), SYSC 5.2.30R (Table: FCA-specified significant-harm functions) and SYSC 5.2.32R (CASS oversight and the certification regime); and8

    8. (g)

      SUP 16.14 (Client money and asset return).

CASS 1.4.12G

4The option to elect to comply with CASS set out in CASS 1.4.9 R only applies to the extent the firm is carrying on auction regulation bidding. Where a firm is carrying on MiFID business bidding, CASS applies to it in accordance with the general application rules in CASS for a firm that is carrying on MiFID business.

CASS 1.4.13R

4Where a firm makes an election in accordance with CASS 1.4.9 R it must:

  1. (1)

    make a written record of the election, including the date from which the election is to be effective, on the date it makes the election;

  2. (2)

    keep that record from the date that it is made for a period of five years after ceasing to use the opt in.

CASS 1.4.14R

4Where a firm that has opted in to CASS under CASS 1.4.9 R subsequently decides to cease its use of that opt in it must:

  1. (1)

    make a written record of this decision, including the date from which the decision is to be effective, on the date it takes the decision;

  2. (2)

    keep that record from the date that it is made for a period of five years after the date it is to be effective; and

  3. (3)

    discharge any outstanding fiduciary obligations that had arisen because the firm had elected to comply with CASS.

Debt management activities

CASS 1.4.15G
  1. (1)

    6The debt management client money chapter applies to CASS debt management firms receiving or holding client money.

  2. (2)

    The mandate rules apply, where relevant, to CASS debt management firms carrying on debt management activity.