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CASS 11.9 Segregation and the operation of client money accounts

Requirement to segregate

CASS 11.9.1R

A CASS debt management firm must take all reasonable steps to ensure that all client money it receives is paid directly into a client bank account at an approved bank, rather than being first received into the firm's own account and then segregated.

CASS 11.9.2G

A CASS debt management firm should arrange for clients and third parties to make transfers and payments of any money which will be client money directly into the firm's client bank accounts.

CASS 11.9.3R

A CASS debt management firm must ensure that client money is held in a client bank account at one or more approved banks.

CASS 11.9.4R

Cheques received by a CASS debt management firm, made out to the firm, representing client money or a mixed remittance must be treated as client money from receipt by the firm.

CASS 11.9.5R

Where a CASS debt management firm receives client money in the form of cash, a cheque or other payable order, it must:

  1. (1)

    pay the money into a client bank account in accordance with CASS 11.9.1 R promptly and no later than on the business day after it receives the money;

  2. (2)

    if the firm holds the money overnight, hold it in a secure location in line with Principle 10; and

  3. (3)

    record the receipt of the money in the firm's books and records under the applicable requirements of CASS 11.11 (Records, accounts and reconciliations).

Mixed remittance

CASS 11.9.6R

If a CASS debt management firm receives a mixed remittance it must:

  1. (1)

    pay the full sum into a client bank account promptly and in accordance with CASS 11.9.1 R to CASS 11.9.5 R; and

  2. (2)

    no later than one business day1 after the payment of the mixed remittance1 into the client bank account1 has cleared, pay the money that is not client money out of the client bank account.

Allocation of client money receipts

CASS 11.9.7R
  1. (1)

    A CASS debt management firm must allocate in its books and records any client money it receives to an individual client promptly and, in any case, no later than five business days following the receipt.

  2. (2)

    Pending a CASS debt management firm's allocation of a client money receipt to an individual client under (1), it must record the received client money in its books and records as "unallocated client money".

CASS 11.9.8R

If a CASS debt management firm receives money (either in a client bank account or an account of its own) which it is unable immediately to identify as client money or its own money, it must:

  1. (1)

    take all necessary steps to identify the money as either client money or its own money;

  2. (2)

    if it considers it reasonably prudent to do so, given the risk that client money may not be adequately protected if it is not treated as such, treat the entire balance of money as client money and record the money in its books and records as "unidentified client money" while it performs the necessary steps under (1).

CASS 11.9.9G

If a CASS debt management firm is unable to identify money that it has received as either client money or its own money under CASS 11.9.8 R (1), it should consider whether it would be appropriate to return the money to the person who sent it (or, if that is not possible, to the source from where it was received, for example, the bank). A firm should have regard to its fiduciary duties when considering such matters.

Money received by appointed representatives, tied agents, field representatives and other agents

CASS 11.9.10R

A CASS debt management firm must ensure that client money received by its appointed representatives, field representatives or other agents is:

  1. (1)

    received directly into a client bank account of the firm; or

  2. (2)

    if it is received in the form of a cheque or other payable order:

    1. (a)

      paid into a client bank account of the CASS debt management firm promptly and, in any event, no later than the next business day after receipt; or

    2. (b)

      forwarded to the firm or, in the case of a field representative, forwarded to a specified business address of the CASS debt management firm, to ensure that the money arrives at the specified business address promptly and, in any event, no later than the close of the third business day following the receipt of the money from the client; or

  3. (3)

    if it is received in the form of cash, paid into a client bank account of the CASS debt management firm promptly and, in any event, no later than the next business day after receipt.

Interest

CASS 11.9.11R

A CASS debt management firm must pay a client any interest earned on client money held for that client.

Returning money to clients

CASS 11.9.12R

A CASS debt management firm must, on receipt of a written request to withdraw from a debt management plan, promptly return to the client any client money held by it for the client.

CASS 11.9.13G

The FCA would expect compliance with the requirement in CASS 11.9.12 R to return client money promptly to require client money to be returned to a client within five business days of the date on which a client's withdrawal from a debt management plan takes effect.