Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.

CASS 14 Annex 2G Guidance notes for the TPCAR

G

1. This annex contains guidance on the TPCAR and is therefore only relevant to a firm that is subject to CASS 14.3.

2. Italicised terms in the TPCAR have the same meaning as in the Glossary.

3. A firm is reminded of its obligation to determine their “CASS firm type” categorisation in accordance with CASS 14.2.8R.

4. A firm should complete Part 1 and either Part 2 or Part 3, depending on whether it is reporting on investment services and activities or insurance distribution activities. See also the guidance at CASS 14.3.5G for firms that carry on both sorts of activities under their temporary permission.

5. For the purposes of the TPCAR, the FCA does not prescribe any particular methodology or frequency for valuing safe custody assets.

6. Guide for completing individual questions in the TPCAR:

PART 1 - TO BE COMPLETED BY ALL TP FIRMS

Section 1.1 - Scope of this return

1.1.1

What is the reporting period start date for this return?

1.1.2

What is the reporting period end date for this return?

The reporting period is a calendar period for which the TPCAR is required to be completed in accordance with CASS 14.3.1R, including the first day and the last day of the relevant period applicable to the firm. The first reporting period starts from 1 January 20211.

For example:

• For a firm conducting investment services or activities under their temporary permission which is subject to monthly reporting under CASS 14.3.3R, the first reporting period will be 1 January 2021 to 31 January 20211, regardless of whether or not any day in January1 is a business day.

• For a firm conducting insurance distribution activities under their temporary permission which is subject to half-yearly reporting under CASS 14.3.3R and has an accounting reference date of 31 March, the first reporting period will be 1 January 2021 to 31 March 20211, regardless of whether or not any day in this period is a business day. The next reporting period for such a firm will be 1 April 2021 to 30 September 20211.

1.1.3

Does this return report on:

- investment services and activities, to which CASS 6 or CASS 7 apply as a result of GEN 2.2.26R; or

- insurance distribution activities, to which CASS 5 applies as a result of GEN 2.2.26R?

A firm should identify the relevant activity in the course of which it holds client money or safe custody assets under its temporary permission and answer either “investment services or activities” or “insurance distribution activities”.

If a firm is conducting both activities in the course of which it holds client money or safe custody assets under its temporary permission, then it will need to complete a separate TPCAR for each activity.

Section 1.2 - Location of activities

1.2.1

Did the firm conduct the activities to which this return relates from an establishment in the UK?

A firm should answer either “Yes” or “No”. For example, a firm should answer “Yes” if, during the reporting period, it conducted the above activities from a branch in the UK.

Section 1.3 - Compliance

1.3.1

During the reporting period, did the firm have any breaches of its obligations under CASS 14?

A firm should answer either “Yes” or “No”.

1.3.2

During the reporting period, did the firm obtain an external auditor’s report on the adequacy of the firm's arrangements under its client assets obligations?

A firm should answer either “Yes” or “No”.

Section 1.4 - Solvency

1.4.1

During the reporting period, were there any issues with the firm's solvency?

A firm should answer either “Yes” or “No”.

Section 1.5 - Other issues

1.5.1

During the reporting period, were there any other issues with the firm in relation to its obligations under CASS which applied as a result of GEN 2.2.26R? If so, please provide a brief description.

A firm should describe any issues not covered by the TPCAR that may be relevant in respect of holding client money or safe custody assets to which CASS applies as a result of GEN 2.2.26R during the reporting period.

PART 2 - FOR REPORTING ON INVESTMENT SERVICES OR ACTIVITIES

2.1.1

During the reporting period, did the firm hold client money and/or safe custody assets in relation to activities carried on in reliance of the firm’s temporary permission to which CASS 6 or CASS 7 apply as a result of GEN 2.2.26R?

A firm should answer either “Yes” or “No”.

2.1.2

What was the highest balance of client money held in relation to activities carried on in reliance of the firm’s temporary permission, in relation to which CASS 7 applies as a result of GEN 2.2.26R?

A firm should report the highest total amount of client money that it held at any point during the reporting period.

A firm should ensure that it includes in the amount reported any client money that it is holding, which has or have been placed with a third party custodian, either by a custodian with which that firm has deposited those client money, or by that firm if it is a custodian.

A firm should determine the highest figures by reference to the data that it has recorded from its reconciliations required under article 2(1)(c) of the MiFID Delegated Directive that relate to the reporting period in question.

2.1.3

What was the highest amount of safe custody assets held in relation to activities carried on in reliance of the firm’s temporary permission, in relation to which CASS 6 applies as a result of GEN 2.2.26R?

A firm should report the highest total amount of safe custody assets that it held at any point during the reporting period.

A firm should ensure that it includes in the amount reported any safe custody assets that it is holding, which has or have been placed with a third party custodian, either by a custodian with which that firm has deposited those safe custody assets, or by that firm if it is a custodian.

A firm should determine the highest figures by reference to the data that it has recorded from its reconciliations required under article 2(1)(c) of the MiFID Delegated Directive that relate to the reporting period in question.

2.1.4

What percentage of the client money reported in Question 2.1.2 was deposited with a bank or a qualifying money market fund in the same group as the firm (article 4, MiFID Delegated Directive)?

A firm should state what percentage of client money are held with a credit institution, bank or qualifying money market fund of the same group as the firm.

2.1.5

What was the frequency of reconciliations between the firm's internal accounts and records and those of any third party with whom the client money reported in Question 3 was held (article 2(1)(c), MiFID Delegated Directive)?

A firm should identify the frequency of its reconciliations in respect of client money required by article 2(1)(c) of MiFID Delegated Directive and answer either “Daily”, “Quarterly”, “Monthly”, “Annually” or “Other”.

2.1.6

What was the frequency of reconciliations between the firm's internal accounts and records and those of any third party with whom the safe custody assets reported in Question 2.1.2 were held (article 2(1)(c), MiFID Delegated Directive)?

A firm should identify the frequency of its reconciliations in respect of safe custody assets required by article 2(1)(c) of MiFID Delegated Directive and answer either “Daily”, “Quarterly”, “Monthly”, “Annually” or “Other”.

2.1.7

Did the firm resolve all discrepancies identified by its reconciliations referred to in Questions 7 and 8 as applicable (article 2(1)(c), MiFID Delegated Directive)?

A firm should answer either “Yes” or “No”.

2.1.8

Were there any changes to the firm's officer responsible for compliance with obligations relating to safeguarding of client assets appointed pursuant to article 7 of the MiFID Delegated Directive?

A firm should answer either “Yes” or “No”.

2.1.9

Did the firm have any breaches of its obligations to segregate and/or keep records in accordance with its obligations under CASS 6 or 7 which applied as a result of GEN 2.2.26R?

A firm should answer either “Yes” or “No”.

PART 3 - FOR REPORTING ON INSURANCE DISTRIBUTION ACTIVITIES

3.1.1

During the reporting period, did the firm hold money in relation to activities carried on in reliance of the firm’s temporary permission to which CASS 5 applies as a result of GEN 2.2.26R?

A firm should answer either “Yes” or “No”.

3.1.2

How did the firm protect such money in accordance with article 10.6 of the IDD?

This question should only be answered if a firm answered “Yes” in Question 3.1.1.

A firm should answer “Contractual risk transfer to the insurer”, “Holding customers' monies in segregated customer accounts”, “Holding capital on a permanent basis” or “A guarantee fund”.

A firm’s answer may depend on which of these methods are permitted by its Home State’s implementation of the IDD.

More than one answer may be given if the firm protects money using more than one of these methods.

3.1.3

What was the highest balance of money held by the firm in relation to activities carried on in reliance of the firm’s temporary permission to which CASS 5 applies as a result of GEN 2.2.26R?

This question should only be answered if a firm answered “Yes” in Question 11.

A firm should take into account the amount recorded in the firm’s records that relate to the reporting period in question. A firm should also take into account money held in all the possible methods of holding such money under IDD.

3.1.4

Did the firm have any breaches of its obligations to segregate and/or keep records in accordance with its obligations under CASS 5 which applied as a result of GEN 2.2.26R? .

A firm should answer either “Yes” or “No”