Related provisions for CASS 6.3.4A-2
1 - 9 of 9 items.
(1) The requirements in CASS 6.6.2 R to CASS 6.6.4 R are for a firm to keep internal records and accounts of clients'safe custody assets. Therefore any records falling under those requirements should be maintained by the firm, and should be separate to any records the firm may have obtained from any third parties, such as those with whom it may have deposited, or through whom it may have registered legal title to, clients'safe custody assets.6(2) The FCA expects that compliance
(1) An internal custody record check is one of the steps a firm takes to satisfy its obligations under:(a) Principle 10 (Clients' assets);(b) CASS 6.2.2 R (Requirement to have adequate organisational arrangements);(c) CASS 6.6.2 R to CASS 6.6.4 R (Records and accounts); and(d) where relevant, SYSC 4.1.1 R (General requirements) and SYSC 6.1.1 R (Compliance).(2) An internal custody record check is a check as to whether the firm's records and accounts of the safe custody assets
In CASS 6.6.34 R, the third parties whose records and accounts a firm is required to reconcile its own internal records and accounts with must include:(1) the third parties with which the firm has deposited clients'safe custody assets;3(2) where the firm has not deposited a client'ssafe custody asset with a third party:3(a) the third parties responsible for the registration of legal title to that safe custody asset; or33(b) a person acting as an operator for the purposes of any
Where a firm deposits safe custody assets belonging to a client with a third party or where a third party is responsible for the registration of legal title to that asset,2 in complying with the requirements of CASS 6.6.34 R, the firm should seek to ensure that the third party provides the firm with adequate information (for example in the form of a statement) as at a date specified by the firm which details the description and amounts of all the safe custody assets credited to
If a firmacting as trustee or depositary of an AIF that is an authorised AIF deposits safe custody assets belonging to a client with a third party, under article 89(1)(c) (Safekeeping duties with regard to assets held in custody) of the AIFMD level 2 regulation, the firm should seek to ensure that the third party provides the firm with adequate information (for example in the form of a statement) as at a date or dates specified by the firm which details the description and amounts
5If a firmacting as trustee or depositary of a UCITS deposits safe custody assets belonging to a client with a third party, under article 13(1)(c) (Safekeeping duties with regard to assets held in custody) of the UCITS level 2 regulation, the firm should seek to ensure that: (1) the third party provides the firm with adequate information (for example in the form of a statement):(a) as at a date or dates specified by the firm; and(b) which details the description and amounts of
In this section, a discrepancy should not be considered to be resolved until it is fully investigated and corrected, and any associated shortfall is made good by way of the firm ensuring that:(1) it is holding (under the custody rules) each of the safe custody assets that the firm ought to be holding for each of its clients; and(2) its own records, and the records of any relevant other person (such as a third party with whom the firm deposited the safe custody assets) accurately
(1) 1A firm may deposit
safe custody assets2
held by it on behalf of its clients into an account or accounts opened with a third party, but only if it exercises all due skill, care and diligence in the selection, appointment and periodic review of the third party and of the arrangements for the holding and safekeeping of those safe custody assets.222(1A) [deleted]66(2) [deleted]66(3) When a firm makes the selection, appointment and conducts the periodic review referred to 2under
(1) Subject to (2), a6firm must only deposit
safe custody assets2
with a third party in a jurisdiction which specifically regulates and supervises the safekeeping of
safe custody assets2
for the account of another person8 with a third party who is subject to such regulation.622(2) A firm must not deposit
safe custody assets2
held on behalf of a client with a third party in a third country8 which does not regulate the holding and safekeeping of
safe custody assets2
for the
6A firm must take the necessary steps to ensure that any client'ssafe custody assets deposited with a third party are identifiable separately from the applicable assets belonging to the firm and from the applicable assets belonging to that third party, by means of differently titled accounts on the books of the third party or other equivalent measures that achieve the same level of protection.[Note: article 2(1)(d) of the MiFID Delegated Directive8]
6A firm must have entered into a written agreement with any person with whom it deposits clients'safe custody assets under CASS 6.3.1 R, or with whom it arranges safeguarding and administration of assets which are clients'safe custody assets. This agreement must, at minimum: (1) set out the binding terms of the arrangement between the firm and the third party;(2) be in force for the duration of that arrangement; and(3) clearly set out the custody service(s) that the third party
Subject to CASS 6.2.3A-1R, a9firm must effect appropriate registration or recording of legal title to a
safe custody asset2
belonging to a client8 in the name of:62(1) the client, unless the client is an authorised person acting on behalf of its client, in which case it may be registered in the name of the client of that authorised person;6(2) a nominee company which is controlled by:(a) the firm;(b) an affiliated company;(c) a recognised investment exchange; or5(d) a third party
9A firm need not comply with CASS 6.2.3 R for any safe custody asset:(1) that it has deposited with a third party in accordance with CASS 6.3 (Depositing assets and arranging for assets to be deposited with third parties); and(2) for which, because of the arrangements with that third party for depositing the safe custody asset, it is not practicable for the firm to effect appropriate registration or recording of legal title itself.
2When a trustee firm or depositary acts as a custodian for a trust or collective investment scheme, (except for a firmacting as trustee or depositary of an AIF and a firmacting as trustee or depositary of a UCITS12), and:
7- (1)
the trust or scheme is established by written instrument; and
- (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 |
Trustees and depositaries |
|
General purpose |
|
Protection of clients' safe custody assets |
|
CASS 6.2.3 R and CASS 6.2.3B G9 9 |
Registration and recording of legal title9 |
Holding9 |
|
9CASS 6.3.1 R to CASS 6.3.4B G9 9 |
Depositing safe custody assets with third parties |
Use of safe custody assets |
|
| 9 | Records, accounts and reconciliations |
If a firm has deposited safe custody assets with a third party under CASS 6.3 and client money arises from, or in connection with, those safe custody assets then the firm must ensure that the third party either deposits the money in a client bank account of the firm or records it in a client transaction account for the benefit of the firmclients as appropriate.
When calculating the client money requirement under either of the methods in CASS 7.16.10 R, a firm must:(1) include any unallocated client money (see CASS 7.13.36 R) and unidentified receipts of money it considers prudent to segregate as client money (see CASS 7.13.37 R);(2) include any money the firm appropriates and holds as client money to cover an unresolved shortfall in safe custody assets identified in its internal records which is not attributable, or cannot be attributed
A firm must include within its CASS resolution pack:(1) a master document containing information sufficient to retrieve each document in the firm'sCASS resolution pack;(2) a document which identifies the institutions the firm has appointed (including through an appointed representative, tied agent, field representative or other agent):(a) in the case of client money, for the placement of money in accordance with CASS 7.13.3 R1 or to hold client money in accordance with CASS 7.14.2