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CASS 6.1 Application

CASS 6.1.1R

This chapter (the custody rules) applies to a firm:2 1

  1. (1)

    [deleted]2

    2
    1. (a)

      [deleted]2

      2
    2. (b)

      [deleted]2

      2
  2. (1A)

    2when it holds financial instruments belonging to a client in the course of its MiFID business;

    7
  3. (1B)

    2when it is safeguarding and administering investments, in the course of business that is not MiFID business;7

  4. (1C)

    when it is acting as trustee or depositary of an AIF; 7

    9
  5. (1D)

    when it is acting as trustee or depositary of a UCITS; and9 7

  6. (1E)

    in respect of any arrangement for a client to transfer full ownership of a safe custody asset to the firm which is:

    1. (a)

      in the course of, or in connection with, the firm's designated investment business; and

    2. (b)

      for the purpose of securing or otherwise covering present or future, actual or contingent or prospective obligations, but the application of the custody rules to a firm under this paragraph is limited to the rules and guidance in CASS 6.1.6 R to CASS 6.1.9 G; and10

      9
  7. (1F)

    when it is a small AIFM carrying on excluded custody activities.10

  8. (2)

    [deleted]2

    2
CASS 6.1.1-AR

10In applying the custody rules to a small AIFM's excluded custody activities, any reference to a firm carrying on the regulated activities of safeguarding and administering investments, safeguarding and administering assets (without arranging) or arranging safeguarding and administration of assets includes those excluded custody activities that would, but for the exclusion in article 72AA of the RAO, amount to whichever of those regulated activities is referred to.

CASS 6.1.1AG

2The regulated activity of safeguarding and administering investments covers both the safeguarding and administration of assets (without arranging) andarranging safeguarding and administration of assets,5 when those assets are either safe custody investments or custody assets. A safe custody investment is, in summary, a designated investment which a firm receives or holds on behalf of a client. Custody assets include designated investments, and any other assets that the firm holds or may hold in the same portfolio as a designated investment held for or on behalf of a client.5

CASS 6.1.1BR
  1. (1)

    Firms to which the custody rules apply by virtue of CASS 6.1.1R (1B) or (1E) 12must also apply the custody rules to those custody assets which are not safe custody investments in a manner appropriate to the nature and value of those custody assets.10

  2. (2)

    Firms to which the custody rules apply by virtue of CASS 6.1.1R (1C) must also apply the custody rules:10

    1. (a)

      to those custody assets which are not AIF custodial assets but are safe custody investments; and

    2. (b)

      in a manner appropriate to the nature and value of those custody assets, to those custody assets which are neither AIF custodial assets nor safe custody investments.

  3. (3)

    12Firms to which the custody rules apply by virtue of CASS 6.1.1R(1D) must also apply them:

    1. (a)

      to those custody assets which are not UCITS custodial assets but are safe custody investments; and

    2. (b)

      in a manner appropriate to the nature and value of those custody assets, to those custody assets which are neither UCITS custodial assets nor safe custody investments.

CASS 6.1.1CG

2In accordance with article 42 of the Regulated Activities Order, a firm ("I") will not be arranging safeguarding and administration of assets if it introduces a client to another firm whose permitted activities include the safeguarding and administration of investments, or to an exempt person acting as such, with a view to that other firm or exempt person:

  1. (1)

    providing a safe custody service in the United Kingdom; or

  2. (2)

    arranging for the provision of a safe custody service in the United Kingdom by another person;

and the other firm, exempt person or other person who is to provide the safe custody service is not in the same group as I, and does not remunerate I.

CASS 6.1.2G

Firms are reminded that dividends (actual or payments in lieu), stock lending fees and other payments received for the benefit of a client, and which are due to the clients,2 should be held in accordance with the client money chapter where appropriate.

2
CASS 6.1.3G

[deleted]2

2

Business in the name of the firm

CASS 6.1.4R

The custody rules do not apply where a firm carries on business in its name but on behalf of the client where that is required by the very nature of the transaction and the client is in agreement.

[Note: recital 26 to MiFID]

CASS 6.1.5G

For example, this chapter does not apply where a firm borrows safe custody assets 2 from a client as principal under a stock lending agreement.

2

Title transfer collateral arrangements

CASS 6.1.6R
24
  1. (1)

    The custody rules do not apply where a client transfers full ownership of a safe custody asset to a firm for the purpose of securing or otherwise covering present or future, actual, contingent or prospective obligations.

    [Note: recital 27 to MiFID]

    4
  2. (2)

    4Excepted from (1) is a transfer of the full ownership of a safe custody asset:

    1. (a)

      belonging to a retail client;

    2. (b)

      whose purpose is to secure or otherwise cover that client's present or future, actual, contingent or prospective obligations under a contract for differences or6 a rolling spot forex contract that is a future, and in either case where that contract is6 entered into with a firm acting as market maker; and

    3. (c)

      which is made to that firm or to any other person arranging on its behalf.

CASS 6.1.6AR
  1. (1)

    4Subject to (2), where a firm makes arrangements for the purpose of securing or otherwise covering present or future, actual, contingent or prospective obligations of a retail client those arrangements must not provide for the taking of a transfer of full ownership of any of that client's safe custody assets.

  2. (2)

    The application of (1) is confined to the taking of a transfer of full ownership:

    1. (a)

      whose purpose is to secure or otherwise cover that retail client's obligations under a contract for differences or6a rolling spot forex contract that is a future, and in either case where that contract is6 entered into with a firm acting as market maker; and

    2. (b)

      which is made to that firm or to any other person arranging on its behalf.

CASS 6.1.6BR
  1. (1)

    9A firm must ensure that any arrangement relating to the transfer of full ownership of a client's safe custody asset to the firm for the purposes set out in CASS 6.1.6R (1) and CASS 6.1.6AR (1) is the subject of a written agreement made on a durable medium between the firm and the client.

  2. (2)

    Regardless of the form of the agreement in (1) (which may have additional commercial purposes), it must cover the client's agreement to:

    1. (a)

      the terms for the arrangement relating to the transfer of the client's full ownership of the safe custody asset to the firm;

    2. (b)

      any terms under which the ownership of the safe custody asset is to transfer from the firm back to the client; and

    3. (c)

      (to the extent not covered by the terms under (b)), any terms for the termination of:

      1. (i)

        the arrangement under (a); or

      2. (ii)

        the overall agreement in (1).

  3. (3)

    A firm must retain a copy of the agreement under (1) from the date the agreement is entered into and until five years after the agreement is terminated.

CASS 6.1.6CG

9The terms referred to in CASS 6.1.6BR (2)(b) may include, for example, terms under which the arrangement relating to the transfer of full ownership of the safe custody asset to the firm is not in effect from time to time, or is contingent on some other condition.

CASS 6.1.7G

A title transfer financial collateral arrangement under the Financial Collateral Directive is a type of transfer of instruments to cover obligations where the financial instrument will not be regarded as belonging to the client.

CASS 6.1.8G

Firms are reminded of the client's best interests rule, which requires them to act honestly, fairly and professionally in accordance with the best interests of their clients when structuring their business particularly in respect of the effect of that structure on firms' obligations under this chapter.

Termination of title transfer collateral arrangements9

CASS 6.1.8AR
  1. (1)

    9If a client communicates to a firm that it wishes (whether pursuant to a contractual right or otherwise) to terminate an arrangement relating to the transfer of full ownership of its safe custody asset to a firm for the purposes set out in CASS 6.1.6R (1) and CASS 6.1.6AR (1) and the client's communication is not in writing, the firm must make a written record of the client's communication which also records the date the communication was received.

  2. (2)

    A firm must keep a client's written communication, or a written record of the client's communication in (1), for five years, starting from the date the communication was received by the firm.

  3. (3)
    1. (a)

      If a firm agrees to the termination of an arrangement relating to the transfer of full ownership of a client's safe custody asset to the firm, it must notify the client of its agreement in writing. The notification must state when the termination is to take effect and whether or not the client's safe custody asset will be held under the custody rules by the firm thereafter.

    2. (b)

      If a firm does not agree to terminate an arrangement relating to the transfer of full ownership of a client's safe custody asset to the firm, it must notify the client of its disagreement in writing.

  4. (4)

    A firm must keep a written record of any notification it makes to a client under (3) for a period of five years, starting from the date the notification was made.

CASS 6.1.8BG

9CASS 6.1.8AR (3)(a) refers only to a firm's agreement to terminate an existing arrangement relating to the transfer of full ownership of a client's safe custody asset to the firm. Such agreement by a firm does not necessarily need to amount to the termination of its entire agreement with the client.

CASS 6.1.8CG

9When a firm notifies a client under CASS 6.1.8AR (3)(a) of when the termination of an arrangement relating to the transfer of full ownership of the safe custody asset to a firm is to take effect, it should take into account:

  1. (1)

    any relevant terms relating to such a termination that have been agreed with the client; and

  2. (2)

    the period of time it reasonably requires to return the safe custody asset to the client or to update the registration under (Holding of client assets) CASS 6.2and update its records under CASS 6.6 (Records, accounts and reconciliations).

CASS 6.1.8DR

9If an arrangement relating to the transfer of full ownership of safe custody assets to a firm for the purposes set out in CASS 6.1.6R (1) and CASS 6.1.6AR (1) is terminated, then the exemption at CASS 6.1.6R (1) no longer applies.

CASS 6.1.8EG
  1. (1)

    9Following the termination of an arrangement relating to the transfer of full ownership of safe custody assets to a firm for the purposes set out in CASS 6.1.6R (1) and CASS 6.1.6AR (1), where a firm does not immediately return the safe custody assets to the client the firm should consider whether the custody rules apply in respect of the safe custody assets pursuant to CASS 6.1.1R (1A) to CASS 6.1.1R (1C).

  2. (2)

    Where the custody rules apply to a firm for safe custody assets in these circumstances then the firm is required to comply with those rules and should, for example, update the registration under CASS 6.2(Holding of client assets), update its records under CASS 6.6 (Records, accounts and reconciliations) and treat any shortfall in accordance with CASS 6.6.54 R (in each case as appropriate).

CASS 6.1.9G

Firms are reminded that, in certain cases, the collateral rules apply where a firm receives collateral from a client in order to secure the obligations of the client.

Prime brokerage agreements

CASS 6.1.9AG

3A prime brokerage firm is reminded of the additional obligations in CASS 9.3.1 R which apply to prime brokerage agreements.

Affiliated companies - MiFID business2

CASS 6.1.10G

The fact that a client is an affiliated company in respect of MiFID business2 does not affect the operation of the custody rules in relation to that client.

Affiliated companies - non-MiFID business2

CASS 6.1.10AG

[deleted]9

CASS 6.1.10BR

9In respect of a firm's business falling under CASS 6.1.1R (1B), the custody rules do not apply to the firm when it is safeguarding and administering investments on behalf of an affiliated company, unless:

  1. (1)

    the firm has been notified that the designated investment belongs to a client of the affiliated company; or

  2. (2)

    the affiliated company is a client dealt with at arm's length.

CASS 6.1.11G

[deleted]2

2

Delivery versus payment transaction exemption9

CASS 6.1.12R
  1. (1)

    Subject to (2) and CASS 6.1.12B R and with the written agreement of the relevant client, a9 firm need not treat this chapter as applying in respect of a delivery versus payment transaction through a commercial settlement system if:9

    929
    1. (a)

      in respect of a client's purchase, the firm intends for the asset in question to be due to the client within one business day following the client's fulfilment of its payment obligation to the firm;9 or

      9
    2. (b)

      in respect of a client's sale, the firm intends for the asset in question to be due to the firm within one business day following the firm's fulfilment of its payment obligation to the client.9

      9
    9
  2. (2)

    If the payment or delivery by the firm to the client has not occurred by the close of business on the third business day following the date on which a firm makes use of the exemption under (1), the firm must stop using that exemption for the transaction.9

    9
  3. (3)

    If the period referred to in CASS 6.1.12R (2) has expired before such a delivery versus payment transaction through a commercial settlement system has settled, a firm may, until settlement and provided that doing so is consistent with the firm's permissions and it complies with (4), segregate the firm's own money as client money (in accordance with the client money rules) of an amount equivalent to the value at which that safe custody asset is reasonably expected to settle instead of holding the client's safe custody assets (in accordance with the custody rules).9

  4. (4)

    Where a firm intends to segregate money as client money instead of the client's safe custody asset under (3) it must, before doing so, ensure that this would result in money being held for the relevant client in respect of the shortfall under 9CASS 7.17.2R11 (statutory trust).9

  5. (5)

    Where a firm segregates an amount of client money instead of the client's safe custody assets under (3) it must also:

    1. (a)

      ensure the money is segregated under 9CASS 7.139 (Segregation of client money) and recorded as being held for the relevant client(s) under 9CASS 7.15 (Records, accounts and reconciliations);

    2. (b)

      keep a record of the actions the firm has taken under this rule which includes a description of the safe custody asset in question, identifies the relevant affected client, and specifies the amount of money that the firm has appropriated as client money to cover the value of the safe custody asset; and

    3. (c)

      update the record made under (5)(b) when the transaction in question has settled and the firm has re-appropriated the money.9

CASS 6.1.12AG
  1. (1)

    9The amount of client money a firm segregates for the purposes of CASS 6.1.12R (3) may be determined by the previous day's closing mark to market valuation of the relevant safe custody asset or, if in relation to a particular safe custody asset none is available, the most recent available valuation.

  2. (2)

    Where a firm is segregating money for the purposes of CASS 6.1.12R (3) it should, as regularly as necessary, and having regard to Principle 10:

    1. (a)

      review the value of the safe custody asset in question in line with (1); and

    2. (b)

      where the firm has found that the value of the safe custody asset has changed, adjust the amount of money it has appropriated to ensure that these monies are sufficient to cover the latest value of the safe custody asset.

CASS 6.1.12BR

9A firm cannot, in respect of a particular delivery versus payment transaction, make use of the exemption under CASS 6.1.12 R in either or both of the following circumstances:

  1. (1)

    it is not a direct member or participant of the relevant commercial settlement system, nor is it sponsored by such a member or participant, in accordance with the terms and conditions of that commercial settlement system;

  2. (2)

    the transaction in question is being settled by another person on behalf of the firm through an account held at the relevant commercial settlement system by that other person.

CASS 6.1.12CG

9Where a firm does not meet the requirements in CASS 6.1.12 R or CASS 6.1.12B R for use of the exemption in CASS 6.1.12 R, the firm is subject to the custody rules in respect of any safe custody asset it holds in connection with the delivery versus payment transaction in question.

CASS 6.1.12DG
  1. (1)

    9In line with CASS 6.1.12 R, where a firm receives a safe custody asset from a client in respect of a delivery versus payment transaction the firm is carrying out through a commercial settlement system in respect of a client's sale, and the firm has not fulfilled its payment obligation to the client by close of business on the third business day following the date of the client's fulfilment of its delivery obligation to the firm, the firm should consider whether the custody rules apply in respect of the safe custody asset pursuant to CASS 6.1.1R (1A) to CASS 6.1.1R (1D).

  2. (2)

    Upon settlement of a delivery versus payment transaction a firm is carrying out through a commercial settlement system (including when it is settled within the three business day period referred to in CASS 6.1.12 R), in respect of:

    1. (a)

      a client's purchase, the custody rules apply to the relevant safe custody asset the firm receives upon settlement; and

    2. (b)

      a client's sale, the client money rules will apply to the relevant money received on settlement.

CASS 6.1.12ER
  1. (1)

    9If a firm makes use of the exemption under CASS 6.1.12 R, it must obtain the client's written agreement to the firm's use of this exemption.

  2. (2)

    In respect of each client, the written agreement in (1) must be retained during the time that the firm makes use, or intends to make use, of the exemption under CASS 6.1.12 R in respect of that client's safe custody assets.

CASS 6.1.13G

[deleted]2

2
CASS 6.1.14G

[deleted]2

2

Temporary handling of safe custody assets2

CASS 6.1.15G

The custody rules do not apply if a firm temporarily handles a safe custody asset 2 belonging to a client. A firm should temporarily handle a safe custody asset 2 for no longer than is reasonably necessary. In most transactions this would be no longer than one business day, but it may be longer or shorter depending upon the transaction in question. For example, when a firm executes an order to sell shares which have not been registered on a de-materialised exchange, handling documents for longer periods may be reasonably necessary. However, in the case of safe custody assets 2 in bearer form, the firm is expected to handle them for less than one business day. When a firm temporarily handles safe custody assets,2 it is still obliged to comply with Principle 10 (Clients' assets).

2222
CASS 6.1.16G

When a firm temporarily handles a safe custody asset,2 in order to comply with its obligation to act in accordance with Principle 10 (Clients' assets), the following are guides to good practice:

2
  1. (1)

    a firm should keep the safe custody asset 2 secure, record it as belonging to that client, and forward it to the client or in accordance with the client's instructions as soon as practicable after receiving it; and

    2
  2. (2)

    a firm should make and retain a record of the fact that the firm has handled that safe custody asset 2 and of the details of the client concerned and of any action the firm has taken.

    2

Exemptions which do not apply to MiFID business

CASS 6.1.16AR

2The exemptions in CASS 6.1.16B R to CASS 6.1.16D G do not apply to a MiFID investment firm which holds financial instruments belonging to a client in the course of MiFID business.

CASS 6.1.16BR

[deleted]7

7

Managers of AIFs and UCITS

CASS 6.1.16BAG
10
  1. (1)

    The custody rules do not apply to a firm that is managing an AIF or managing a UCITS in relation to excluded custody activities, except where the firm is a small AIFM.10

  2. (2)

    The custody rules can apply to a firm that is managing an AIF or managing a UCITS in relation to activities that are not excluded custody activities. For example, where the firm:10

    1. (a)

      holds financial instruments belonging to a client in the course of its MiFID business (see CASS 6.1.1R (1A)); or

    2. (b)

      is safeguarding and administering investments, in the course of business that is not MiFID business (see CASS 6.1.1R (1B)).

Personal investment firms

CASS 6.1.16CR

2The custody rules do not apply to a personal investment firm when it temporarily holds a designated investment, other than in bearer form, belonging to a client, if the firm:

  1. (1)

    keeps it secure, records it as belonging to that client, and forwards it to the client or in accordance with the client's instructions, as soon as practicable after receiving it;

  2. (2)

    retains the designated investment for no longer than the firm has taken reasonable steps to determine is necessary to check for errors and to receive the final document in connection with any series of transactions to which the documents relate; and

  3. (3)

    makes a record, which must then be retained for a period of 5 years after the record is made, of all the designated investments handled in accordance with (1) and (2) together with the details of the clients concerned and of any action the firm has taken.

CASS 6.1.16DG

2Administrative convenience alone should not lead a personal investment firm to rely on CASS 6.1.16C R. Personal investment firms should consider what is in the client's interest and not rely on CASS 6.1.16C R as a matter of course.

Trustees and depositaries (except depositaries of AIFs and UCITS)

CASS 6.1.16ER

2The specialist regime in CASS 6.1.16F R to CASS 6.1.16I G does not apply to a MiFID investment firm which holds financial instruments belonging to a client in the course of MiFID business.

CASS 6.1.16FR

2When a trustee firm or depositary acts as a custodian for a trust or collective investment scheme, (except for a firm acting as trustee or depositary of an AIF and a firm acting as trustee or depositary of a UCITS12), and:

7
  1. (1)

    the trust or scheme is established by written instrument; and

  2. (2)

    the trustee firm or depositary has taken reasonable steps to determine that the relevant law and provisions of the trust instrument or scheme constitution will provide protections at least equivalent to the custody rules for the trust property or scheme property;

the trustee firm or depositary need comply only with the custody rules listed in the table below.

Reference

Rule

CASS 6.1.1 R to CASS 6.1.9 G and CASS 6.1.15 G to CASS 6.1.16C R

Application

CASS 6.1.16E R to CASS 6.1.16I G

Trustees and depositaries

CASS 6.1.22 G to CASS 6.1.24 G

General purpose

CASS 6.2.1 R and CASS 6.2.2 R

Protection of clients' safe custody assets

CASS 6.2.3 R and CASS 6.2.3B G 9

9

Registration and recording of legal title9

CASS 6.2.7 R

Holding9

9CASS 6.3.1 R to CASS 6.3.4B G 9

9

Depositing safe custody assets with third parties

CASS 6.4.1 R and CASS 6.4.2 G

Use of safe custody assets

CASS 6.6 9

9

Records, accounts and reconciliations

CASS 6.1.16GG

2The reasonable steps referred in CASS 6.1.16FR (2) could include obtaining an appropriate legal opinion to that effect.

CASS 6.1.16HR

[deleted]9

9
CASS 6.1.16IG

2A trustee firm or depositary that just arranges safeguarding and administration of assets may also take advantage of the exemption in CASS 6.1.16J R (Arrangers).

Depositaries of AIFs

CASS 6.1.16IAR
  1. (1)

    7Subject to (2), when a firm is acting as trustee or depositary of an AIF the firm need comply only with the custody rules in the table below:

    Reference

    Rule

    CASS 6.1.1 R, CASS 6.1.9 G, CASS 6.1.9A G and CASS 6.1.16IB G

    Application

    CASS 6.1.22 G to CASS 6.1.24 G

    General purpose

    CASS 6.2.3 R and CASS 6.2.3B G 9 to CASS 6.2.6 G

    9

    Registration and recording of legal title9

    CASS 6.2.7 R

    Holding

    CASS 6.6.2 R, CASS 6.6.4 R, CASS 6.6.6 R, CASS 6.6.7 R, CASS 6.6.57R (2) and CASS 6.6.58 G9

    9

    Records, accounts and reconciliations

  2. (2)

    When a firm is acting as trustee or depositary of an AIF that is an authorised AIF the firm must, in addition to the custody rules in (1), also comply with the custody rules in the table below:

    Reference

    Rule

    CASS 6.1.1BR (2) 10

    10

    Application

    CASS 6.6.8 R, CASS 6.6.11 R to CASS 6.6.32 G, CASS 6.6.41 G, CASS 6.6.43 G and CASS 6.6.47 G.9

    9

    Records, accounts and reconciliations

CASS 6.1.16IBG

7Firms 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 6.

CASS 6.1.16ICG

7A firm (Firm A) to which another firm acting as trustee or depositary of an AIF (Firm B) has delegated safekeeping functions in accordance9 with FUND 3.11.28 R 9 (Delegation: safekeeping) will not itself be acting as trustee or depositary of an AIF for that AIF. CASS 6.1.16IA R will not apply to Firm A in respect of that AIF. However, Firm A may be safeguarding and administering investments in respect of that AIF.

99

Depositaries of UCITS

CASS 6.1.16IDR

12When a firm is acting as trustee or depositary of a UCITS, the firm need comply only with the custody rules in the table below:

Reference

Rule

CASS 6.1.1R, CASS 6.1.1BR(3), CASS 6.1.9G, CASS 6.1.16IEG

Application

CASS 6.1.22G to CASS 6.1.24G

General purpose

CASS 6.2.3R, CASS 6.2.3AR, CASS 6.2.3BG, CASS 6.2.7R

Holding of client assets

13CASS 6.6.2R, CASS 6.6.4R, CASS 6.6.7R, CASS 6.6.41AG, CASS 6.6.57R(2A), CASS 6.6.58G

Records, accounts and reconciliations

CASS 6.1.16IEG

12Firms acting as trustee or depositary of a UCITS are reminded of the obligations in COLL 6.6B (UCITS depositaries) which apply as well as those in CASS 6.

CASS 6.1.16IFG
  1. (1)

    12A firm (Firm A) to which another firm acting as trustee or depositary of a UCITS (Firm B) has delegated safekeeping functions under COLL 6.6B.25R (Delegation: safekeeping) will not itself be acting as trustee or depositary of a UCITS for that UCITS scheme.

  2. (2)

    CASS 6.1.16IDR will not apply to Firm A for that UCITS scheme.

  3. (3)

    However, Firm A may be safeguarding and administering investments in respect of that UCITS scheme.

Arrangers

CASS 6.1.16JR

2Only the custody rules in the table below apply to a firm when arranging safeguarding and administration of assets.

Reference

Rule

CASS 6.1.1 R to CASS 6.1.9 G and CASS 6.1.15 G to CASS 6.1.16B R

Application

CASS 6.1.16J R

Arrangers9

9 CASS 6.1.16K R

Records

CASS 6.1.22 G to CASS 6.1.24 G

General purpose9

9CASS 6.3.4A R and CASS 6.3.4B G

Third-party custody agreements

CASS 6.1.16KR

2When a firm arranges safeguarding and administration of assets, it must ensure that proper records of the arrangements9 are made and retained for a period of 5 years after they are made.

9
CASS 6.1.17R
  1. (1)

    [deleted]2

    2
  2. (1A)

    [deleted]2

    2
  3. (2)

    [deleted]2

    2
  4. (3)

    [deleted]2

    2
CASS 6.1.18G

[deleted]2

2
CASS 6.1.19G

[deleted]2

2
CASS 6.1.20G

[deleted]2

2
CASS 6.1.20AG

[deleted]2

2
CASS 6.1.21R

[deleted]2

2

General purpose

CASS 6.1.22G

Principle 10 (Clients' assets) requires a firm to arrange adequate protection for clients' assets when it is responsible for them. As part of these protections, the custody rules require a firm to take appropriate steps to protect safe custody assets 2 for which it is responsible.

2
CASS 6.1.23G

The rules in this chapter are designed primarily to restrict the commingling of client and the firm's assets and minimise the risk of the client's safe custody assets 2 being used by the firm without the client's agreement or contrary to the client's wishes, or being treated as the firm's assets in the event of its insolvency.

2
CASS 6.1.24G

The custody rules also, where relevant,2 implement the provisions of MiFID which regulate the obligations of a firm when it holds financial instruments belonging to a client in the course of its MiFID business.2