Related provisions for CASS 7.11.39

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CASS 5.5.4RRP
If a firm is liable to pay money to a client, it must as soon as possible, and no later than one business day after the money is due and payable:(1) pay it into a client bank account, in accordance with CASS 5.5.5 R; or(2) pay it to, or to the order of, the client.
CASS 5.5.6GRP
The FCA expects that in most circumstances it will be practicable for a firm to pay client money into a client bank account by not later than the next business day after receipt.
CASS 5.5.7GRP
Where an insurance transaction involves more than one firm acting in a chain such that for example money is transferred from a "producing" broker who has received client money from a consumer5 to an intermediate broker and thereafter to an insurance undertaking, each broker firm will owe obligations to its immediate client to segregate client money which it receives (in this example the producing broker in relation to the consumer5and the intermediate broker in relation to the
CASS 5.5.11AGRP
2When a firm acts in accordance with CASS 5.3 (Statutory trust) it should not make a payment from the client bank account unless it is satisfied on reasonable grounds that the client has provided it with cleared funds. Accordingly, a firm should normally allow a reasonable period of time for cheques to clear. If a withdrawal is made and the client's cheque is subsequently dishonoured it will be the firm's responsibility to make good the shortfall in the account as quickly as possible
CASS 5.5.13GRP
A firm can hold client money in either a general client bank account (CASS 5.5.38 R) or a designated client bank account (CASS 5.5.39 R). A firm holds all client money in general client bank accounts for its clients as part of a common pool of money so those particular clients do not have a claim against a specific sum in a specific account; they only have a claim to the client money in general. A firm holds client money in designated client bank accounts for those clients who requested
CASS 5.5.14RRP
(1) A firm which handles client money in accordance with the rules for a non-statutory trust in CASS 5.4 may, to the extent it considers appropriate, but subject to (2), satisfy the requirement to segregate client money by segregating or arranging for the segregation of designated investments with a value at least equivalent to such money as would otherwise have been segregated into a client bank account.(2) A firm may not segregate designated investments unless it:(a) takes reasonable
CASS 5.5.16RRP
(1) A firm may draw down commission from the client bank account if:(a) it has received the premium from the client (or from a third party premium finance provider on the client's behalf);2 and(b) this is consistent with the firm'sterms of business which it maintains with the relevant client and 2the insurance undertaking to whom the premium will become2 payable;and the firm may draw down commission before payment of the premium to the insurance undertaking, provided that the conditions
CASS 5.5.17GRP
(1) As soon as commission becomes due to the firm (in accordance with CASS 5.5.16 R (1)) it must be treated as a remittance which must be withdrawn in accordance with CASS 5.5.16 R (2). 2The procedure required by CASS 5.5.16 R will also 2apply where moneyis 2due and payable 2to the firm in respect of fees due from clients (whether to the firm or other professionals).(2) Firms are reminded that money received in accordance with CASS 5.2 must not, except where a firm and an insurance
CASS 5.5.18RRP
(1) Subject to (4), a 2firm must in relation to each of its appointed representatives, field representatives and other agents comply with CASS 5.5.19 R to CASS 5.5.21 R (Immediate segregation) or with CASS 5.5.23 R (Periodic segregation and reconciliation).(2) A firm must in relation to each representative or other agent keep a record of whether it is complying with CASS 5.5.19 R to CASS 5.5.21 R or with CASS 5.5.23 R.(3) A firm is, but without affecting the application of CASS
CASS 5.5.19RRP
A firm must establish and maintain procedures to ensure that client money received by its appointed representatives, field representatives, or other agents of the firm is:(1) paid into a client bank account of the firm in accordance with CASS 5.5.5 R; or(2) forwarded to the firm, or in the case of a field representative forwarded to a specified business address of the firm, so as to ensure that the money arrives at the specified business address by the close of the third busi
CASS 5.5.20GRP
For the purposes of CASS 5.5.19 R, the client money received on business day one should be forwarded to the firm or specified business address of the firm no later than the next business day after receipt (business day two) in order for it to reach that firm or specified business address by the close of the third business day. Procedures requiring the client money to be sent to the firm or the specified business address of the firm by first class post no later than the next business day
CASS 5.5.21RRP
If client money is received in accordance with CASS 5.5.19 R, the firm must ensure that its appointed representatives, field representatives or other agents keep client money (whether in the form of premiums, claims money or premium refunds) separately identifiable from any other money (including that of the firm) until the client money is paid into a client bank account or sent to the firm.
CASS 5.5.23RRP
(1) A firm must, on a regular basis, and at reasonable intervals, ensure that it holds in its client bank account an amount which (in addition to any other amount which it is required by these rules to hold) is not less than the amount which it reasonably estimates to be the aggregate of the amounts held at any time by its appointed representatives, field representatives, and other agents.(2) A firm must, not later than ten business days following the expiry of each period in
CASS 5.5.24GRP
(1) CASS 5.5.23 R allows a firm with appointed representatives, field representatives and other agents to avoid the need for the representative to forward client money on a daily basis but instead requires a firm to segregate into its client money bank account amounts which it reasonably estimates to be sufficient to cover the amount of client money which the firm expects its representatives or agents to receive and hold over a given period. At the expiry of each such period, the
CASS 5.5.26RRP
A firm must take reasonable steps to ensure that it is notified promptly of any receipt of client money in the form of client entitlements.
CASS 5.5.28RRP
When a firm receives a client entitlement on behalf of a client, it must pay any part of it which is client money:(1) for client entitlements received in the United Kingdom, into a client bank account in accordance with CASS 5.5.5 R; or(2) for client entitlements received outside the United Kingdom, into any bank account operated by the firm, provided that such client money is:(a) paid to, or in accordance with, the instructions of the client concerned; or(b) paid into a client
CASS 5.5.29RRP
A firm must take reasonable steps to ensure that a client entitlement which is client money is allocated within a reasonable period of time after notification of receipt.
CASS 5.5.34RRP
A firm may allow another person, such as another broker to hold or control client money, but only if:(1) the firm transfers the client money for the purpose of a transaction for a client through or with that person; and(2) in the case of a consumer,5 that customer has been notified (whether through a client agreement,4terms of business, or otherwise in writing) that the client money may be transferred to another person.54
CASS 5.5.38RRP
(1) A firm must ensure that client money is held in a client bank account at one or more approved banks.(2) If the firm is a bank, it must not hold client money in an account with itself.
CASS 5.5.39RRP
A firm may open one or more client bank accounts in the form of a designated client bank account. Characteristics of these accounts are that:(1) the account holds money of one or more clients;(2) the account includes in its title the word 'designated';(3) the clients whose money is in the account have each consented in writing to the use of the bank with which the client money is to be held; and(4) in the event of the failure of that bank, the account is not pooled with any other
CASS 5.5.40GRP
(1) A firm may operate as many client accounts as it wishes.(2) A firm is not obliged to offer its clients the facility of a designated client bank account.(3) Where a firm holds money in a designated client bank account, the effect upon either:(a) the failure of a bank where any other client bank account is held; or(b) the failure of a third party to whom money has been transferred out of any other client bank account in accordance with CASS 5.5.34 R;(each of which is a secondary
CASS 5.5.41RRP
A firm may hold client money with a bank that is not an approved bank if all the following conditions are met:(1) the client money relates to one or more insurance transactions which are subject to the law or market practice of a jurisdiction outside the United Kingdom;(2) because of the applicable law or market practice of that overseas jurisdiction, it is not possible to hold the client money in a client bank account with an approved bank;(3) the firm holds the money with such
CASS 5.5.42GRP
A firm owes a duty of care to a client when it decides where to place client money. The review required by CASS 5.5.43 R is intended to ensure that the risks inherent in placing client money with a bank are minimised or appropriately diversified by requiring a firm to consider carefully the bank or banks with which it chooses to place client money. For example, a firm which is likely only to hold relatively modest amounts of client money will be likely to be able to satisfy this
CASS 5.5.43RRP
Before a firm opens a client bank account and as often as is appropriate on a continuing basis (and no less than once in each financial year), it must take reasonable steps to establish that the bank is appropriate for that purpose.
CASS 5.5.44GRP
A firm should consider diversifying placements of client money with more than one bank where the amounts are, for example, of sufficient size to warrant such diversification.
CASS 5.5.45GRP
When considering where to place client money and to determine the frequency of the appropriateness test under CASS 5.5.43 R, a firm should consider taking into account, together with any other relevant matters:(1) the capital of the bank;(2) the amount of client money placed, as a proportion of the bank's capital and deposits;(3) the credit rating of the bank (if available); and(4) to the extent that the information is available, the level of risk in the investment and loan activities
CASS 5.5.46GRP
A firm will be expected to perform due diligence when opening a client bank account with a bank that is authorised by an EEA regulator. Any continuing assessment of that bank may be restricted to verification that it remains authorised by an EEA regulator.
CASS 5.5.48RRP
If a client has notified a firm in writing that he does not wish his money to be held with a bank in the same group as the firm, the firm must either:(1) place that client money in a client bank account with another bank in accordance with CASS 5.5.38 R; or(2) return that client money to, or pay it to the order of, the client.
CASS 5.5.49RRP
When a firm opens a client bank account, the firm must give or have given written notice to the bank requesting the bank to acknowledge to it in writing:(1) that all money standing to the credit of the account is held by the firm as trustee (or if relevant in Scotland, as agent) and that the bank is not entitled to combine the account with any other account or to exercise any right of set-off or counterclaim against money in that account in respect of any sum owed to it on any
CASS 5.5.50RRP
In the case of a client bank account in the United Kingdom, if the bank does not provide the acknowledgement referred to in CASS 5.5.49 R within 20 business days after the firm dispatched the notice, the firm must withdraw all money standing to the credit of the account and deposit it in a client bank account with another bank as soon as possible.
CASS 5.5.51RRP
In the case of a client bank account outside the United Kingdom, if the bank does not provide the acknowledgement referred to in CASS 5.5.49 R within 20 business days after the firm dispatched the notice, the firm must notify the client of this fact as set out in CASS 5.5.53 R.
CASS 5.5.58RRP
A firm must not undertake any transaction for a consumer5 that involves client money being passed to another broker or settlement agent located in a jurisdiction outside the United Kingdom, unless the firm has previously disclosed to the consumer5 (whether in its terms of business, client agreement 4or otherwise in writing):554(1) that his client money may be passed to a person outside the United Kingdom but the client may notify the firm that he does not wish his money to be
CASS 5.5.62GRP
(1) In order that a firm may check that it has sufficient money segregated in its client bank account (and held by third parties) to meet its obligations to clients it is required periodically to calculate the amount which should be segregated (the client money requirement) and to compare this with the amount shown as its client money resource. This calculation is, in the first instance, based upon the firm's accounting records and is followed by a reconciliation with its banking
CASS 5.5.63RRP
(1) A firm must, as often as is necessary to ensure the accuracy of its records and at least at intervals of not more than 25 business days:2(a) check whether its client money resource, as determined by CASS 5.5.65 R on the previous business day, was at least equal to the client money requirement, as determined by CASS 5.5.66 R or CASS 5.5.68 R, as at the close of business on that day; and2(b) ensure that:2(i) any shortfall is paid into a client bank account by the close of business
CASS 5.5.64RRP
A firm must keep a record of whether it calculates its client money requirement in accordance with CASS 5.5.66 R or CASS 5.5.68 R and may only use one method during each annual accounting period (which method must be the same in relation to both CASS 5.3 and CASS 5.4).
CASS 5.5.65RRP
The client money resource, for the purposes of CASS 5.5.63 R (1)(a),2 is:(1) the aggregate of the balances on the firm's client money bank accounts, as at the close of business on the previous business day and, if held in accordance with CASS 5.4, designated investments (valued on a prudent and consistent basis) together with client money held by a third party in accordance with CASS 5.5.34 R; and(2) (but only if the firm is comparing the client money resource with its client's
CASS 5.5.66RRP
A firm'sclient money (client balance) requirement is the sum of, for all clients, the individual client balances calculated in accordance with CASS 5.5.67 R but excluding any individual balances which are negative (that is, uncleared client funds).
CASS 5.5.68RRP
A firm's client money (accruals) requirement is the sum of the following:(1) all insurance creditors shown in the firm's business ledgers as amounts due to insurance undertakings, clients and other persons; plus(2) unearned commission 2being the amount of commission 2shown as accrued (but not shown as due 2and payable) as at the date of the calculation (a prudent estimate must be used if the firm is unable to produce an exact figure at the date of the calculation).
CASS 5.5.69RRP
A firm which calculates its client money requirement on the preceding basis must in addition and within a reasonable period be able to match its client money resource to its requirement by reference to individual clients (with such matching being achieved for the majority of its clients and transactions).
CASS 5.5.80RRP
Money ceases to be client money if it is paid:(1) to the client, or a duly authorised representative of the client; or(2) to a third party on the instruction of or with the specific consent of the client, but not if it is transferred to a third party in the course of effecting a transaction, in accordance with CASS 5.5.34 R; or(3) into a bank account of the client (not being an account which is also in the name of the firm); or(4) to the firm itself, when it is due and payable
CASS 5.5.81GRP
(1) A firm which pays professional fees (for example to a loss adjuster or valuer) on behalf of a client may do so in accordance with CASS 5.5.80 R (2) where this is done on the instruction of or with the consent of the client.(2) When a firm wishes to transfer client money balances to a third party in the course of transferring its business to another firm, it should do so in compliance with CASS 5.5.80 R and a transferee firm will come under an obligation to treat any client
CASS 5.5.82RRP
When a firm draws a cheque or other payable order to discharge its fiduciary duty under CASS 5.5.80 R, it must continue to treat the sum concerned as client money until the cheque or order is presented and paid by the bank.
CASS 5.5.83RRP
For the purposes of CASS 5.1.5 R, if a firm makes a payment to, or on the instructions of, a client, from an account other than a client bank account, until that payment has cleared, no equivalent sum will become due and payable to the firm or may be withdrawn from a client bank account by way of reimbursement.
CASS 5.5.84RRP
A firm must ensure that proper records, sufficient to show and explain the firm's transactions and commitments in respect of its client money, are made and retained for a period of three years after they were made.
CASS 7.16.5GRP
(1) A firm that adopts the normal approach to segregating client money (CASS 7.13.6 R) will be using the methods in this section to check whether it has correctly segregated client money in its client bank accounts.(2) A firm that adopts the alternative approach to segregating client money (CASS 7.13.54 G) will be using the methods in this section to calculate how much money it needs to withdraw from, or place in, client bank accounts as a result of any discrepancy arising between
CASS 7.16.6GRP
Unless otherwise stated, firms are reminded that they are required to receive all client money receipts directly into a client bank account (see CASS 7.13.6 R).
CASS 7.16.7GRP
A firm that receives client money in the form of cash, a cheque or other payable order is reminded that it must pay that money (eg, into a client bank account) no later than on the business day after it receives the money (see CASS 7.13.32 R). Once deposited into a client bank account, that receipt of client money should form part of the firm'sclient money resource (see CASS 7.16.8 R). In calculating its client money requirement, a firm will need to take into account any client
CASS 7.16.8RRP
The client money resource is the aggregate balance on the firm'sclient bank accounts.
CASS 7.16.9GRP
(1) A firm should ensure that the amount it reflects in its internal client money reconciliation as its client money resource is equal to the aggregate balance on its client bank accounts. For example, if:(a) a firm holds client money received as cash, cheques or payment orders but not yet deposited in a client bank account (in accordance with CASS 7.13.32 R); and(b) that firm records all receipts from clients, whether or not yet deposited with a bank, in its cashbook (see CASS
CASS 7.16.10RRP
Subject to CASS 7.16.12 R, the client money requirement must be calculated by one, but not both, of the following of two methods:(1) the individual client balance method (CASS 7.16.16 R); or(2) the net negative add-back method (CASS 7.16.17 R).
CASS 7.16.11RRP
The net negative add-back method may only be used, under this section, by a CASS 7 asset management firm or a CASS 7 loan-based crowdfunding firm and only if such firms do not undertake any margined transactions for, or on behalf of, their clients.
CASS 7.16.12RRP
A CASS 7 loan-based crowdfunding firm must not use the individual client balance method under this section.
CASS 7.16.13GRP
(1) The client money requirement should represent the total amount of client money a firm is required to have segregated in client bank accounts under the client money rules.(2) CASS 7.16.11 R does not prevent a firm from adopting a net negative add-back method as part of a non-standard method of internal client money reconciliation.(3) CASS 7.16.12 R does not prevent a CASS loan-based crowdfunding firm from adopting the individual client balance method as part of a non-standard
CASS 7.16.14GRP
(1) The individual client balance method (CASS 7.16.16 R) may be applied by any firm except a CASS 7 loan-based crowdfunding firm. This method requires a firm to calculate the total amount of client money it should be segregating in client bank accounts by reference to how much the firm should be holding in total (ie, across all its client bank accounts and businesses) for each of its individual clients for:(a) non-margined transactions (CASS 7.16.16 R (1) and CASS 7.16.21 R);
CASS 7.16.15GRP
The net negative add-back method (CASS 7.16.17 R) is available to CASS 7 asset management firms and CASS 7 loan-based crowdfunding firms, many of whom may operate internal ledger systems on a bank account by bank account, not client-by-client, basis. This method allows a firm to calculate the total amount of client money it is required to have segregated in client bank accounts by reference to: (1) the balances in each client bank account (see CASS 7.16.17 R (1) and CASS 7.16.18
CASS 7.16.16RRP
Subject to CASS 7.16.25 R and CASS 7.16.37 R, under this method the client money requirement must be calculated by taking the sum of, for all clients and across all products and accounts: (1) the individual client balances calculated under CASS 7.16.21 R, excluding:(a) individual client balances which are negative (ie, debtors); and(b) clients' equity balances;(2) the total margined transaction requirement (calculated under CASS 7.16.32 R); and(3) any amounts that have been segregated
CASS 7.16.17RRP
Subject to CASS 7.16.25 R, under this method the client money requirement must be calculated by taking the sum of, for each client bank account: (1) the amount which the firm's internal records show as held on that account; and(2) an amount that offsets each negative net amount which the firm's internal records show attributed to that account for an individual client.
CASS 7.16.18GRP
(1) A firm which utilises the net negative add-back method is reminded that it must do so in a way which allows it to maintain its records so that, at any time, the firm is able to promptly determine the total amount of client money it should be holding for each client (see CASS 7.15.5 R (1)).(2) For the purposes of CASS 7.16.17 R, a firm should be able to readily use the figures previously recorded in its internal records and ledgers (for example, its cashbook or other internal
CASS 7.16.19GRP
(1) A firm which utilises the net negative add-back method may1 calculate its client money requirement and client money resource on a bank account by bank account basis;(2) For1 the purposes of CASS 7.16.17 R, a firm should take into account any amounts that have been segregated as client money according to the firm's records under either or both CASS 7.13.50 R (prudent segregation record) and CASS 7.13.66 R (alternative approach mandatory prudent segregation record).
CASS 7.16.21RRP
A firm must calculate a client's individual client balances in a way which captures the total amount of all money the firm should be holding as client money in a client bank account for that client for non-margined transactions under the client money rules.
CASS 7.16.22ERP
(1) A firm may calculate either:(a) one individual client balance for each client,1 based on the total of the firm's holdings for that1client; or (b) a number of individual client balances for each client, equal to the number of products or business lines the firm operates for that client and each balance based on the total of the firm's holdings for that client in respect of the particular product or business line.1(2) Each individual client balance for a client should be calculated
CASS 7.16.23RRP
A firm must calculate an individual client balance using the contract value of any client purchases or sales, being the value to which the client would be contractual entitled to receive or contractually obligated to pay.
CASS 7.16.24GRP
If a firm calculates each individual client balance on a product-by-product or business line-by-business line1 basis under CASS 7.16.22 E (1)(b), the result should be that the firm does not net client positions across all products and accounts.
CASS 7.16.25RRP
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
CASS 7.16.26GRP
(1) Under CASS 7.16.25 R (3), where a firm holds client money received as cash, cheques or payment orders but not yet deposited in a client bank account under CASS 7.13.32 R, it may:(a) include these balances when calculating its client money requirement (eg, where the firm records all receipts from clients, whether or not yet deposited with a bank, in its cashbook); or(b) exclude these balances when calculating its client money requirement (eg, where the firm only records client
CASS 7.16.27GRP
(1) In accordance with CASS 7.16.25 R (5), where a firm has allowed another person to hold client money in connection with a client's non-margined transaction (eg, in a client transaction account under CASS 7.14 (Client money held by a third party))1, the firm should include these balances when calculating its client money requirement.(2) If a firm is utilising the individual client balance method (CASS 7.16.16 R) to calculate its client money requirement, CASS 7.16.21 R requires
CASS 7.16.28RRP
Subject to CASS 7.16.30 R, a client's equity balance is the amount which the firm would be liable to pay to the client (or the client to the firm) under the client money rules for margined transactions if each of the open positions were liquidated at the closing or settlement prices published by the relevant exchange or other appropriate pricing source and the account with the firm were closed. This notional balance should include any unrealised losses or profits associated with
CASS 7.16.29RRP
Subject to CASS 7.16.30 R, a firm's equity balance is the amount which the firm would be liable to pay to the exchange, clearing house, intermediate broker or OTC counterparty (or vice-versa) for the firm's margined transactions if each of the open positions of those of the firm's clients that are entitled to protection under the client money rules were liquidated at the closing or settlement prices published by the relevant exchange or other appropriate pricing source and the
CASS 7.16.31GRP
The margined transaction requirement should represent the total amount of client money a firm is required under the client money rules to segregate in client bank accounts for margined transactions. The calculation in CASS 7.16.33 R is designed to ensure that an amount of client money is held in client bank accounts which equals at least the difference between the equity the firm holds at exchanges, clearing houses, intermediate brokers and OTC counterparties for margined transactions
CASS 7.16.34GRP
Where CASS 7.16.33 R applies, the firm will be reducing the requirement arising from CASS 7.16.16 R (2) and, as such, simultaneously reducing its overall client money requirement (ie, the amount of money the firm is required to segregate in client bank accounts).
CASS 7.16.35RRP
If a firm's total margined transaction requirement is negative, the firm must treat it as zero for the purposes of calculating its client money requirement.
CASS 7.16.36RRP
A firm with a Part 30 exemption order which also operates an LME bond arrangement for the benefit of US-resident investors must exclude the client equity balances for transactions undertaken on the LME on behalf of those US-resident investors from the calculation of the margined transaction requirement, to the extent those transactions are provided for by an LME bond arrangement (see CASS 12.2.3 G).1
CASS 7.16.37RRP
Where appropriate, a firm may:(1) when, in respect of a client, there is a positive individual client balance and a negative client equity balance, offset the credit against the debit and, therefore, have a reduced individual client balance in CASS 7.16.21 R for that client; and(2) when, in respect of a client, there is a negative individual client balance and a positive client equity balance, offset the credit against the debit and, therefore, have a reduced client equity balance
CASS 7.16.38GRP
The effect of CASS 7.16.37 R is to allow a firm to offset, on a client-by-client basis, a negative amount with a positive amount arising out of the calculations in CASS 7.16.21 R and CASS 7.16.28 R and, therefore, reduce its overall client money requirement.
CASS 7.11.1RRP
(1) [deleted]51(2) [deleted]5(3) (a) A firm must not enter into a TTCA in respect of money belonging to a retail client. 5(b) Where a firm entered into a TTCA in respect of money belonging to a retail client (or money which would belong to a retail client but for the arrangement) before 3 January 2018, the firm must terminate that TTCA.5[Note: article 16(10) of MiFID and article 5(5) of the MiFID Delegated Directive]5(4) Money that is subject to a TTCA does not amount to client
CASS 7.11.4ARRP
(1) 5A firm must properly consider and document the use of TTCAs in the context of the relationship between the client’s obligation to the firm and the money subjected to TTCAs by the firm.(2) A firm must be able to demonstrate that it has complied with the requirement under (1).(3) When considering, and documenting, the appropriateness of the use of TTCAs, a firm must take into account the following factors:(a) whether there is only a very weak connection between the client’s
CASS 7.11.6GRP
Where a firm has received full title or full ownership to money under a collateral arrangement, the fact that it has also granted a security interest to its client to secure its obligation to repay that money to the client would not result in the money being client money. This can be compared to a situation in which a firm takes a charge or other security interest over money held in a client bank account, where that money would still be client money as there would be no absolute
CASS 7.11.7GRP
Firms are reminded of the client'sbest interest rule, which requires a firm to act honestly, fairly and professionally in accordance with the best interests of its clients when structuring its business particularly in respect of the effect of that structure on firms' obligations under the client money rules.
CASS 7.11.15GRP
The exclusion from the client money rules for delivery versus payment transactions under CASS 7.11.14 R is an example of an exclusion from the client money rules which is permissible by virtue of recital 51 to 5MiFID.
CASS 7.11.17RRP
Where a firm does not meet the requirements in CASS 7.11.14 R or CASS 7.11.16 R for the use of the exemption in CASS 7.11.14 R , the firm is subject to the client money rules in respect of any money it holds in connection with the delivery versus payment transaction in question.
CASS 7.11.18GRP
(1) In line with CASS 7.11.14 R, where a firm receives money from the client in fulfilment of the client's payment obligation in respect of a delivery versus payment transaction the firm is carrying out through a commercial settlement system in respect of a client's purchase, and the firm has not fulfilled its delivery obligation to the client by close of business on the third business day following the date of the client's fulfilment of its payment obligation to the firm, the
CASS 7.11.19RRP
A firm will not be in breach of the requirement under CASS 7.13.6 R to receive client money directly into a client bank account if it: (1) receives the money in question: (a) in accordance with CASS 7.11.14 R (1)(a) but it is subsequently required under CASS 7.11.14 R (2) to hold that money in accordance with the client money rules; or(b) in the circumstances referred to in CASS 7.11.18 G (2)(b); and(2) pays the money in question into a client bank account promptly, and in any
CASS 7.11.22RRP
An authorised fund manager will not be in breach of the requirement under CASS 7.13.6R to receive client money directly into a client bank account if it received the money in accordance with CASS 7.11.21 R (1) and is subsequently required under CASS 7.11.21 R (2) to hold that money in accordance with the client money rules.
CASS 7.11.23GRP
Where proceeds of redemption paid to the client in accordance with CASS 7.11.21 R (1)(a)(ii) are paid by cheque, the cheque should be issued from the relevant client bank account.
CASS 7.11.24RRP
(1) If a firm makes use of the exemption under CASS 7.11.21 R, it must obtain the client's written agreement to the firm's use of the exemption.(2) In respect of each client, the record created in (1) must be retained for the duration of the time that the firm makes use of the exemption under CASS 7.11.21 R in respect of that client's money.
CASS 7.11.25RRP
(1) Money is not client money when it becomes properly due and payable to the firm for its own account.(2) For these purposes, if a firm makes a payment to, or on the instructions of, a client, from an account other than a client bank account, until that payment has cleared, no equivalent sum from a client bank account for reimbursement will become due and payable to the firm.
CASS 7.11.26GRP
Money will not become properly due and payable to the firm merely through the firm holding that money for a specified period of time. If a firm wishes to cease to hold client money for a client it must comply with CASS 7.11.34 R (Discharge of fiduciary duty) or, if the balance is allocated but unclaimed client money, CASS 7.11.50 R (Allocated but unclaimed client money) or CASS 7.11.57 R (De minimis amounts of unclaimed client money).
CASS 7.11.28GRP
Firms are reminded that, notwithstanding that money may be due and payable to them, they have a continuing obligation to segregate client money in accordance with the client money rules. In particular, in accordance with CASS 7.15.2 R, firms must ensure the accuracy of their records and accounts and are reminded of the requirement to carry out internal client money reconciliations either in accordance with the standard methods of internal client money reconciliation or the requirements
CASS 7.11.29GRP
When a client's obligation or liability, which is secured by that client's asset, crystallises, and the firm realises the asset in accordance with an agreement entered into between the client and the firm, the part of the proceeds of the asset to cover such liability that is due and payable to the firm is not client money. However, any proceeds of sale in excess of the amount owed by the client to the firm should be paid over to the client immediately or be held in accordance
CASS 7.11.30GRP
When a firm has entered into an arrangement under which commission is rebated to a client, those rebates need not be treated as client money until they become due and payable to the client in accordance with the terms of the contractual arrangements between the parties.
CASS 7.11.34RRP
Money ceases to be client money (having regard to CASS 7.11.40 R where applicable) if:(1) it is paid to the client, or a duly authorised representative of the client; or(2) it is:(a) paid to a third party on the instruction of, or with the specific consent of, the client unless it is transferred to a third party in the course of effecting a transaction under CASS 7.14.2 R (Transfer of client money to a third party); or(b) paid to a third party pursuant to an obligation on the
CASS 7.11.35RRP
Client money which the firm places at an authorised central counterparty in connection with a regulated clearing arrangement ceases to be client money for that firm if, as part of the default management process of that authorised central counterparty in respect of a default by the firm, it is ported by the authorised central counterparty in accordance with article 48 of EMIR.
CASS 7.11.36RRP
Client money which the firm places at an authorised central counterparty in connection with a regulated clearing arrangement ceases to be client money if, as part of the default management process of that authorised central counterparty in respect of a default by the firm, it is paid directly to the client by the authorised central counterparty in accordance with the procedure described in article 48(7) of EMIR.
CASS 7.11.38RRP
Client money received or held by the firm for a sub-pool ceases to be client money for that firm to the extent that such client money is transferred by the firm to an authorised central counterparty or a clearing member as a result of porting.
CASS 7.11.42RRP
Subject to CASS 7.11.44 R, money ceases to be client money for a firm if:(1) it is transferred by the firm to another person as part of a transfer of business to that person where the client money relates to the business being transferred;(2) it is transferred on terms which require the other person to return a client's transferred sums to the client as soon as practicable at the client's request;(3) a written agreement between the firm and the relevant client provides that:(a)
CASS 7.11.44RRP
(1) Client money belonging to those categories of clients set out in (2) and in respect of those amounts set out in (2) ceases to be client money of the firm if it is transferred by the firm to another person:(a) as part of a transfer of business to that other person where these sums relate to the business being transferred; and(b) on terms which require the other person to return a client's transferred sums as soon as practicable at the client's request.(2) (a) For retail clients
CASS 7.11.47BGRP
6CASS 7A.2.6AR (Closing a client money pool) applies to a firm following a primary pooling event in respect of allocated but unclaimed client money.
CASS 7.11.49GRP
Before acting in accordance with CASS 7.11.50 R to CASS 7.11.58 G, a firm should consider whether its actions are permitted by law and consistent with the arrangements under which the client money is held. For the avoidance of doubt, these provisions relate to a firm's obligations as an authorised person and to the treatment of client money under the client money rules.
CASS 7.11.50RRP
A firm may pay away to a registered charity of its choice a client money balance which is allocated to a client and if it does so the released balance will cease to be client money under CASS 7.11.34 R (10), provided:(1) this is permitted by law and consistent with the arrangements under which the client money is held; (2) the firm held the balance concerned for at least six years following the last movement on the client's account (disregarding any payment or receipt of interest,
CASS 7.11.51GRP
Where the client money balance held by a firm is, in aggregate, £100 or less for a client other than a retail client or, for a retail client, £25 or less, the firm may comply with CASS 7.11.57 R instead of CASS 7.11.50 R.
CASS 7.11.55RRP
(1) If a firm pays away client money under CASS 7.11.50 R (4) it must make and retain, or where the firm already has such records, retain: (a) records of all balances released from client bank accounts under CASS 7.11.50 R (including details of the amounts and the identity of the client to whom the money was allocated); (b) all relevant documentation (including charity receipts); and(c) details of the communications the firm had or attempted to make with the client concerned pursuant
CASS 7.11.56GRP
The purpose of CASS 7.11.57 R is to allow a firm to pay away to charity client money balances of (i) £25 or less for retail clients or (ii) £100 or less for other clients when those balances remain unclaimed. If a firm follows this process, the money will cease to be client money (see CASS 7.11.34 R (10).
CASS 7.11.57RRP
A firm may pay away to a registered charity of its choice a client money balance which is allocated to a client and if it does so the released balance will cease to be client money under CASS 7.11.34 R (10):(1) the balance in question is (i) for a retail client, in aggregate, £25 or less, or (ii) for a professional client, in aggregate, £100 or less; (2) the firm held the balance concerned for at least six years following the last movement on the client's account (disregarding
CASS 7.11.58GRP
Any costs associated with the firm ceasing to treat unclaimed client money balances as client money pursuant to CASS 7.11.50 R to CASS 7.11.57 R should be paid for from the firm's own funds, including:(1) any costs associated with the firm carrying out the steps in CASS 7.11.50 R (3), CASS 7.11.51 G or CASS 7.11.57 R (3); and(2) the cost of any insurance purchased by a firm or the relevant member of its group to cover any legally enforceable claim in respect of the client money
CASS 7.13.16GRP
Firms are reminded of their obligations under CASS 7.18 (Acknowledgment letters) for client bank accounts. Firms should also ensure that client bank accounts meet the requirements in the relevant Glossary definitions, including regarding the titles given to the accounts.
CASS 7.13.17GRP
A firm may open one or more client bank accounts in the form of a general client bank account, a designated client bank account or a designated client fund account (see CASS 7A.2.1 G (Failure of the authorised firm: primary pooling event)). The requirements of CASS 7.13.13 R (2) and CASS 7.13.13 R (3) apply for each type of client bank account.
CASS 7.13.19GRP
A designated client fund account may be used for a client only where that client has consented to the use of that account and all other designated client fund accounts which may be pooled with it. For example, a client who consents to the use of bank A and bank B should have his money held in a different designated client fund account at bank B from a client who has consented to the use of banks B and C. If a firm deposits client money into a designated client fund account then,
CASS 7.13.31RRP
Except in the circumstances described in CASS 7.13.72 R (1)(a), where a firm using the normal approach receives a mixed remittance it should:(1) in accordance with CASS 7.13.6 R, take necessary steps to ensure the mixed remittance is paid directly into a client bank account; and(2) promptly and, in any event no later than one business day after the payment of the mixed remittance into the client bank account has cleared, pay the money that is not client money out of the client
CASS 7.13.32RRP
Where a firm receives client money in the form of cash, a cheque or other payable order, it must:(1) pay the money in accordance with CASS 7.13.6 R, promptly, and no later than on the business day after it receives the money into a client bank account, unless either:(a) the money is received by a business line for which the firm uses the alternative approach, in which case the money must be paid into the firm's own bank account promptly, and no later than on the business day after
CASS 7.13.33RRP
Where a firm receives client money in the form of a cheque that is dated with a future date, unless the firm returns the cheque it must:(1) pay the money in accordance with CASS 7.13.6 R, promptly, and no later than the date on the cheque if the date is a business day or the next business day after the date on the cheque; (2) in the meantime, hold it in a secure location in accordance with Principle 10; and(3) record the receipt of the money in the firm's books and records in
CASS 7.13.34RRP
A firm must ensure that client money received by its appointed representatives, tied agents, field representatives or other agents is:(1) received directly into a client bank account of the firm, where this would have been required if such client money had been received by the firm otherwise than through its appointed representatives, tied agents, field representatives or other agents (see CASS 7.13.6 R and CASS 7.13.7 G); or(2) if it is received in the form of a cheque or other
CASS 7.13.35GRP
Under CASS 7.13.34 R (2)(b), client money received on business day one should be forwarded to the firm or specified business address of the firm promptly and, in any event, no later than the next business day after receipt (business day two) in order for it to reach that firm or specified business address by the close of the third business day. Procedures requiring the client money in the form of a cheque to be sent to the firm or the specified business address of the firm by
CASS 7.13.36RRP
(1) A firm must allocate any client money it receives to an individual client promptly and, in any case, no later than ten business days following the receipt (or where subsequent to the receipt of money it has identified that the money, or part of it, is client money under CASS 7.13.37 R, no later than ten business days following that identification). (2) Pending a firm's allocation of a client money receipt to an individual client under (1), it must record the received client
CASS 7.13.37RRP
If a firm receives money (either in a client bank account or an account of its own) which it is unable to immediately identify as client money or its own money, it must:(1) take all necessary steps to identify the money as either client money or its own money;(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
CASS 7.13.38GRP
If a firm is unable to identify money that it has received as either client money or its own money under CASS 7.13.37 R, it should consider whether it would be appropriate to return the money to the person who sent it or to the source from where it was received (3for example, the banking institution).
CASS 7.13.40GRP
Where the firm has payment instructions from the client the firm should pay the money to the order of the client, rather than into a client bank account.
CASS 7.13.40ARRP
(1) 7Subject to paragraph (2), CASS 7.13.41R to CASS 7.13.49R do not apply to a firm following a primary pooling event.(2) If, at the time of a primary pooling event, a firm has retained money in a client bank account for the purposes of CASS 7.13.41R, that money remains client money for the purposes of the client money rules and the client money distribution and transfer rules.
CASS 7.13.45RRP
The firm's written policy must not conflict with the client money rules or the client money distribution and transfer rules7. If there is a conflict, the client money rules and the client money distribution and transfer rules7 will prevail.
CASS 7.13.50RRP
A firm must create and keep up-to-date records so that the amount of money paid into client bank accounts and retained as client money pursuant to CASS 7.13.41 R or withdrawn pursuant to CASS 7.13.49 R, and the reasons for such payment, retention and withdrawal can be easily ascertained (the prudent segregation record).
CASS 7.13.53ARRP
(1) 7Subject to paragraphs (2) and (3), CASS 7.13.59R, CASS 7.13.62R(3), CASS 7.13.62R(4) and CASS 7.13.63R to CASS 7.13.67R do not apply to a firm following its failure.(2) If, at the time of a primary pooling event, a firm has retained money in a client bank account for the purposes of alternative approach mandatory prudent segregation under CASS 7.13.65R, that money remains client money for the purposes of the client money rules and the client money distribution and transfer
CASS 7.13.63RRP
During the period between the adjustment in CASS 7.13.62 R (3) and the completion of the next reconciliations in CASS 7.13.62 R (2), a firm that uses the alternative approach for a particular business line may:(1) increase the balance held in its client bank account by making intra-day transfers (during T0) from its own bank account to its client bank account before the completion of the internal client money reconciliation under CASS 7.13.62 R (2) (that is expected sometime later
CASS 7.13.64GRP
It is anticipated that CASS 7.13.63 R may be used by firms which maintain client bank accounts in a number of different time zones and making adjustments to the balances of those client bank accounts is dependent on meeting cut off times for money transfers in those time zones.
CASS 7.13.66RRP
A firm must create and keep up-to-date records so that any amount of money that is, pursuant to CASS 7.13.65 R:(1) paid into a client bank account and retained as client money; or(2) withdrawn from a client bank account;can be easily ascertained (the alternative approach mandatory prudent segregation record).
CASS 7.13.70GRP
CASS 7.13.72 R sets out the circumstances under which a firm, that would otherwise be required to comply with the requirement in CASS 7.13.6 R to receive client money directly into a client bank account, must receive (or is permitted to receive) 5client money into its own bank account.
CASS 7.13.71RRP
A firm that is also a clearing member that is using the normal approach in connection with regulated clearing arrangements must use reasonable endeavours to ensure it is not required under its arrangements with an authorised central counterparty to receive mixed remittances from or pay mixed remittances to the authorised central counterparty through a single bank account.
CASS 7.13.72RRP
(1) If, notwithstanding its reasonable endeavours in accordance with CASS 7.13.71 R, the firm is required under its arrangements with an authorised central counterparty to: (a) receive mixed remittances from the authorised central counterparty5 into a single bank account and pay mixed remittances to the authorised central counterparty from that bank account; or(b) pay mixed remittances to the authorised central counterparty using a single bank account;then such arrangements for
CASS 7.13.72ARRP
(1) 7Subject to paragraphs (2) and (3), CASS 7.13.73R to CASS 7.13.75R do not apply to a firm following a primary pooling event.(2) If, at the time of a primary pooling event, a firm has retained money in a client bank account for the purposes of clearing arrangement mandatory prudent segregation under CASS 7.13.73R, that money remains client money for the purposes of the client money rules and the client money distribution and transfer rules.(3) Where a firm holds a clearing
CASS 7.13.73RRP
(1) Where the circumstances described in CASS 7.13.72 R (1)(a) apply to a firm it must pay an amount (determined in accordance with this rule) of its own money into its client bank account and retain that money in its client bank account (clearing arrangement mandatory prudent segregation). The amount segregated by a firm in its client bank account under this rule will be client money for the purposes of the client money rules and the client money distribution and transfer rules7.
CASS 7.13.78GRP
The obligation to use reasonable endeavours referred to in CASS 7.13.71 R is a continuing obligation. Firms should at least on an annual basis, whether it is possible for payments of client money between the firm and the authorised central counterparties to be made separately from house monies and for such payments to be received into and made from its client bank accounts.
CASS 5.6.3GRP
The client money (insurance) distribution rules seek to facilitate the timely return of client money to a client in the event of the failure of a firm or third party at which the firm holds client money.
CASS 5.6.4GRP
A primary pooling event triggers a notional pooling of all the client money, in every type of client money account, and the obligation to distribute it.
CASS 5.6.7RRP
If a primary pooling event occurs:(1) client money held in each client money account of the firm is treated as pooled;(2) the firm must distribute that client money in accordance with CASS 5.3.2 R or, as appropriate, CASS 5.4.7 R, so that each client receives a sum which is rateable to the client money entitlement calculated in accordance with CASS 5.5.66 R; and(3) the firm must, as trustee, call in and make demand in respect of any debt due to the firm as trustee, and must liquidate
CASS 5.6.8GRP
A client's main claim is for the return of client money held in a client bank account. A client may claim for any shortfall against money held in a firm's own account. For that claim, the client will be an unsecured creditor of the firm.
CASS 5.6.9RRP
Client money received by the firm (including in its capacity as trustee under CASS 5.4 (Non-statutory trust)) after a primary pooling event must not be pooled with client money held in any client money account operated by the firm at the time of the primary pooling event. It must be placed in a client bank account that has been opened after that event and must be handled in accordance with the client money rules, and returned to the relevant client without delay, except to the
CASS 5.6.10GRP
Client money received after the primary pooling event relating to an incomplete transaction should be used to complete that transaction.
CASS 5.6.11RRP
If a firm receives a mixed remittance after a primary pooling event, it must:(1) pay the full sum into the separate client bank account opened in accordance with CASS 5.6.9 R; and (2) pay the money that is not client money out of that client bank account into the firm's own bank account within one business day of the day on which the remittance is cleared.
CASS 5.6.12GRP
Whenever possible the firm should seek to split a mixed remittance before the relevant accounts are credited.
CASS 5.6.15RRP
CASS 5.6.20 R to CASS 5.6.31 R do not apply if, on the failure of the third party, the firm repays to its clients or pays into a client bank account, at an unaffected bank, an amount equal to the amount of client money which would have been held if a shortfall had not occurred at that third party.
CASS 5.6.18GRP
When a bank fails and the firm decides not to make good the shortfall in the amount of client money held at that bank, a secondary pooling event will occur in accordance with CASS 5.6.20 R. The firm would be expected to reflect the shortfall that arises at the firm's bank in the periodic client money calculation by reducing the client money resource and client money requirement accordingly.
CASS 5.6.19GRP
The client money (insurance) distribution rules seek to ensure that clients who have previously specified that they are not willing to accept the risk of the bank that has fails, and who therefore requested that their client money be placed in a designated client bank account as a different bank, should not suffer the loss of the bank that has failed.
CASS 5.6.20RRP
If a secondary pooling event occurs as a result of the failure of a bank where one or more general client bank accounts are held, then:(1) in relation to every general client bank account of the firm, the provisions of CASS 5.6.22 R and CASS 5.6.26 R to CASS 5.6.28 G will apply;(2) in relation to every designated client bank account held by the firm with the failed bank, the provisions of CASS 5.6.24 R and CASS 5.6.26 R to CASS 5.6.28 G will apply; and(3) any money held at a
CASS 5.6.22RRP
Money held in each general client bank account of the firm must be treated as pooled and:(1) any shortfall in client money held, or which should have been held, in general client bank accounts, that has arisen as a result of the failure of the bank, must be borne by all the clients whose client money is held in a general client bank account of the firm, rateably in accordance with their entitlements;(2) a new client money entitlement must be calculated for each client by the firm,
CASS 5.6.24RRP
For each client with a designated client bank account held at the failed bank:(1) any shortfall in client money held, or which should have been held, in designated client bank accounts that has arisen as a result of the failure, must be borne by all the clients whose client money is held in a designated client bank account of the firm at the failed bank, rateably in accordance with their entitlements;(2) a new client money entitlement must be calculated for each of the relevant
CASS 5.6.26RRP
Client money received by the firm after the failure of a bank, that would otherwise have been paid into a client bank account at that bank:(1) must not be transferred to the failed bank unless specifically instructed by the client in order to settle an obligation of that client to the failed bank; and(2) must be, subject to (1), placed in a separate client bank account that has been opened after the secondary pooling event and either:(a) on the written instruction of the client, transferred
CASS 5.6.27RRP
If a firm receives a mixed remittance after the secondary pooling event which consists of client money that would have been paid into a general client bank account, a designated client bank account or a designated client fund account maintained at the bank that has failed, it must:(1) pay the full sum into a client bank account other than one operated at the bank that has failed; and(2) pay the money that is not client money out of that client bank account within one business day
CASS 5.6.28GRP
Whenever possible the firm should seek to split a mixed remittance before the relevant accounts are credited.
CASS 5.6.30RRP
Money held in each general client bank account of the firm must be treated as pooled and:(1) any shortfall in client money held, or which should have been held, in general client bank accounts, that has arisen as a result of the failure, must be borne by all the clients whose client money is held in a general client bank account of the firm, rateably in accordance with their entitlements;(2) a new client money entitlement must be calculated for each client by the firm, to reflect
CASS 5.6.31RRP
Client money received by the firm after the failure of another broker or settlement agent, to whom the firm has transferred client money that would otherwise have been paid into a client bank account at that broker or settlement agent:(1) must not be transferred to the failed thirty party unless specifically instructed by the client in order to settle an obligation of that client to the failed broker or settlement agent; and(2) must be, subject to (1), placed in a separate client bank
CASS 7.10.2GRP
A firm is reminded that when CASS 7.10.1 R applies it should treat client money in an appropriate manner so that, for example:(1) if it holds client money in a client bank account that account is held in the firm's name in accordance with CASS 7.13.13 R;(2) if it allows another person to hold client money this is effected under CASS 7.14; and(3) its internal client money reconciliation takes into account any client equity balance relating to its margined transaction requireme
CASS 7.10.4GRP
Firms are reminded that, under CASS 1.2.11 R, they must not keep money in respect of which the client money chapter applies in the same client bank account or client transaction account as money for which the insurance client money chapter applies.
CASS 7.10.6GRP
If a firm has opted to comply with this chapter under CASS 7.10.3R4, the insurance client money chapter will have no application to the activities to which the election applies.
CASS 7.10.7GRP
(1) A firm that is only subject to the insurance client money chapter may not opt to comply with this chapter under either or both CASS 7.10.3 R (1) and CASS 7.10.3 R (2).3(2) Under CASS 7.10.3 R (2A), a firm may opt to comply with this chapter regardless of whether it is otherwise subject to the client money rules.3
CASS 7.10.9GRP
The 'opt out' provisions provide a firm with the option of allowing a professional client to choose whether their money is subject to the client money rules (unless the firm is conducting insurance mediation activity).
CASS 7.10.12RRP
Money is not client money if a firm, in respect of designated investment business which is not an investment service or activity, an ancillary service, a listed activity or insurance mediation activity:(1) holds it on behalf of or receives it from a professional client who is not an authorised person; and (2) has sent a separate written notice to the professional client stating the matters set out in CASS 7.10.10 R (1) to CASS 7.10.10 R (3).
CASS 7.10.16RRP
In relation to the application of the client money rules (and any other rule in so far as it relates to matters covered by the client money rules) to the firms referred to in (1) and (2), the following is not client money:(1) any deposits within the meaning of the CRD held by a CRD credit institution; and[Note: article 16(9)7 of MiFID and article 4(1)7 of the MiFID Delegated Directive7](2) any money held by an approved bank that is not a CRD credit institution in an account with
CASS 7.10.18GRP
The effect of CASS 7.10.16 R is that, unless notified otherwise in accordance with CASS 7.10.20 R or CASS 7.10.22 R, clients of CRD credit institutions or approved banks that are not CRD credit institutions should expect that where they pass money to such firms in connection with designated investment business these sums will not be held as client money.
CASS 7.10.19RRP
A firm holding money in either of the ways described in CASS 7.10.16 R must, before providing designated investment business services to the client in respect of those sums, notify the client that:(1) the money held for that client is held by the firm as banker and not as a trustee under the client money rules; and(2) if the firmfails, the client money distribution and transfer rules8 will not apply to these sums and so the client will not be entitled to share in any distribution
CASS 7.10.20RRP
A firm holding money in either of the ways described in CASS 7.10.16 R in respect of a client and providing the services to it referred to in CASS 7.10.19 R must:(1) explain to its clients the circumstances, if any, under which it will cease to hold any money in respect of those services as banker and will hold the money as trustee in accordance with the client money rules; and(2) set out the circumstances in (1), if any, in its terms of business so that they form part of its
CASS 7.10.22RRP
If a CRD credit institution or an approved bank that is not a CRD credit institution wishes to hold client money for a client (rather than hold the money in either of the ways described in CASS 7.10.16 R) it must, before providing designated investment business services to the client, disclose the following information to the client:(1) that the money held for that client in the course of or in connection with the business described under (2) is being held by the firm as client
CASS 7.10.26RRP
A firm that holds money on behalf of, or receives money from, an affiliated company in respect of designated investment business which is not MiFID business must not treat the money as client money unless:(1) the firm has been notified by the affiliated company that the money belongs to a client of the affiliated company; or(2) the affiliated company is a client dealt with at arm's length; or(3) the affiliated company is a manager of an occupational pension scheme or is an overseas
CASS 7.10.27RRP
The client money rules do not apply with respect to coins held on behalf of a client if the firm and the client have agreed that the money (or money of that type) is to be held by the firm for the intrinsic value of the metal which constitutes the coin.
CASS 7.10.28RRP
(1) An authorised professional firm regulated by the Law Society (of England and Wales), the Law Society of Scotland or the Law Society of Northern Ireland that, with respect to its regulated activities, is subject to the following rules of its designated professional body, must comply with those rules and, where relevant paragraph (3), and if it does so, it will be deemed to comply with the client money rules.(2) The relevant rules are: (a) if the firm is regulated by the Law
CASS 7.10.32GRP
(1) A firm which receives and holds client money in respect of life assurance business in the course of its designated investment business that is not MiFID business may:(a) under CASS 7.10.3 R (2) elect to comply with the client money chapter in respect of such client money and in doing so avoid the need to comply with the insurance client money chapter which would otherwise apply to the firm in respect of client money received in the course of its insurance mediation activity;
CASS 7.10.34RRP
Subject to CASS 7.10.35 R only the client money rules listed in the table below apply to a trustee firm in connection with money that the firm receives, or holds for or on behalf of a client in the course of or in connection with its designated investment business which is not MiFID business.ReferenceRuleCASS 7.10.1 R to CASS 7.10.6 G, and CASS 7.10.16 R to CASS 7.10.27 RApplicationCASS 7.10.33 R to CASS 7.10.40 GTrustee firmsCASS 7.10.41 GGeneral purposeCASS 7.13.3 R to CASS
CASS 7.10.35RRP
(1) A trustee firm to which CASS 7.10.34 R applies may, in addition to the client money rules set out at CASS 7.10.34 R, also elect to comply with:(a) all the client money rules in CASS 7.13 (Segregation of client money); (b) CASS 7.14 (Client money held by a third party);(c) all the client money rules in CASS 7.15 (Records, accounts and reconciliations); or(d) CASS 7.18 (Acknowledgement letters).(2) A trustee firm must make a written record of any election it makes under this
CASS 7.10.37GRP
A trustee firm to which CASS 7.10.34 R applies and which is otherwise subject to the client money rules should ensure that in designing its systems and controls it:(1) takes into account that the client money distribution rules will only apply in relation to any client money that the firm holds other than in its capacity as trustee firm; and(2) has regard to other legislation that may be applicable.
CASS 7.10.40GRP
The provisions in CASS 7.10.34 R to CASS 7.10.39 G do not affect the general application of the client money rules regarding money that is held by a firm other than in its capacity as a trustee firm.
CASS 7.10.41GRP
(1) Principle 10 (Clients' assets) requires a firm to arrange adequate protection for clients' assets when the firm is responsible for them. An essential part of that protection is the proper accounting and treatment of client money. The client money rules provide requirements for firms that receive or hold client money, in whatever form.(2) The client money rules also, where relevant, implement the provisions of MiFID which regulate the obligations of a firm when it holds client
CASS 7.15.4GRP
(1) The requirements in CASS 7.15.2R to CASS 7.15.3R are for a firm to keep internal records and accounts of client money. 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 or through whom it may have deposited, or otherwise allowed to hold, client money. 2(2) Where a firm complies with CASS 7.15 as a whole (to the extent applicable
CASS 7.15.5RRP
(1) A firm must maintain records so that it is able to promptly determine the total amount of client money it should be holding for each of its clients.(2) A firm must ensure that its records are sufficient to show and explain its transactions and commitments for its client money.(3) Unless otherwise stated, a firm must ensure that any record made under the this chapter is retained for a period of five years starting from the later of:(a) the date it was created; and(b) (if it
CASS 7.15.7RRP
For each internal client money reconciliation and external client money reconciliation the firm conducts, it must ensure that it records: (1) the date it carried out the relevant process;(2) the actions the firm took in carrying out the relevant process; and(3) the outcome of its calculation of its client money requirement and client money resource.
CASS 7.15.9RRP
A firm must maintain appropriate records that account for all receipts of client money in the form of cash, cheque or other payable order that are not yet deposited in a client bank account (see CASS 7.13.32 R and CASS 7.13.33 R).
CASS 7.15.10GRP
Firms following one of the standard methods of internal client money reconciliation in CASS 7.16 are also reminded that they must, as part of their internal client money reconciliation, take into account all receipts of client money in the form of cash, cheque or other payable order that are not yet deposited in a client bank account (see CASS 7.13.32 R and CASS 7.13.33 R).
CASS 7.15.15AGRP
(1) 3The reference point for the internal client money reconciliation under CASS 7.15.15R(4)(a) should be the precise point in time at which the primary pooling event occurred.(2) When a firm decides whether it is necessary at any particular point in time to perform an internal client money reconciliation under CASS 7.15.15R(4)(b), it should have particular regard to the need to maintain its books and accounts in order to ensure that:(a) each notional pool of client money formed
CASS 7.15.23RRP
When determining the frequency at which it will undertake external client money reconciliations, a firm must have regard to:(1) the frequency, number and value of transactions which the firm undertakes in respect of client money; and(2) the risks to which the client money is exposed, such as the nature, volume and complexity of the firm's business and where and with whom client money is held.
CASS 7.15.25GRP
In most circumstances, firms which undertake transactions on a daily basis should conduct an external client money reconciliation each business day.
CASS 7.15.26CRRP
3When determining the frequency with which it will undertake external client money reconciliations under CASS 7.15.26AR(2) after a primary pooling event, a firm must have regard to:(1) the frequency, number and value of transactions which the firm undertakes in respect of client money; (2) the risks to which the client money is exposed, such as the nature, volume and complexity of the firm’s business and where and with whom client money is held; and(3) the need to be able to verify
CASS 7.15.29RRP
When a discrepancy arises between a firm's client money resource and its client money requirement identified by a firm's internal client money reconciliations, the firm must determine the reason for the discrepancy and, subject to CASS 7.15.29AR,3 ensure that:(1) any shortfall is paid into a client bank account by the close of business on the day that the reconciliation is performed; or(2) any excess is withdrawn from a client bank account within the same time period.
CASS 7.15.32ARRP
3A firm that has failed is not required to pay its own money into a relevant account under CASS 7.15.32R in so far as the legal procedure for the firm’s failure restricts the firm from doing so.
CASS 7.15.33RRP
A firm must inform the FCA in writing without delay if: (1) its internal records and accounts of client money are materially out of date, inaccurate or invalid so that the firm is no longer able to comply with the requirements in CASS 7.15.2 R, CASS 7.15.3 R or CASS 7.15.5 R (1);(2) it will be unable to, or materially fails to, pay any shortfall into a client bank account or withdraw any excess from a client bank account so that the firm is unable to comply with CASS 7.15.29 R
CASS 7.15.34GRP
Firms are reminded that the auditor of the firm has to confirm in the report submitted to the FCA under SUP 3.10 (Duties of auditors: notification and report on client assets) that the firm has maintained systems adequate to enable it to comply with the client money rules.
CASS 11.11.14RRP
A CASS large debt management firm internal client money reconciliation requires a CASS large debt management firm to check whether its client money resource, as determined by CASS 11.11.16 R, on the previous business day, was at least equal to the client money requirement, as determined by CASS 11.11.17 R as at the close of business on that day.
CASS 11.11.16RRP
The client money resource for client money held in accordance with CASS 11.11.14 R is the aggregate of the balances on the firm'sclient bank accounts, as at the close of business on the previous business day.
CASS 11.11.17RRP
(1) The client money requirement is the sum of:(a) the aggregate of all individual client balances calculated in accordance with CASS 11.11.21 R and CASS 11.11.22 R;(b) the amount of any unallocated client money under CASS 11.9.7 R;(c) the amount of any unidentified client money under CASS 11.9.8 R; and(d) any other amounts of client money included in the calculation under (2). (2) For the purposes of (1)(d), the CASS debt management firm must consider whether there are amounts
CASS 11.11.18GRP
The client money requirement calculated in accordance with CASS 11.11.17 R should represent the total amount of client money a CASS debt management firm is required to have segregated in client bank accounts under the debt management client money chapter.
CASS 11.11.19GRP
Firms are reminded that, under CASS 11.4.3 R, if a firm has drawn any cheques, or other payable orders, to discharge its fiduciary duty to its clients (for example, to return client money to the client or distribute it to the client's creditors), the sum concerned must be included in the firm's calculation of its client money requirement until the cheque or order is presented and paid.
CASS 11.11.20GRP
The following guidance applies where a CASS debt management firm receives client money in the form of cash, a cheque or other payable order:(1) In carrying out the calculation of the client money requirement, a CASS debt management firm may initially include the amount of client money received as cash, cheques or payment orders that has not yet been deposited in a client bank account in line with CASS 11.9.5 R. If it does so, the firm should ensure, before finalising the calculation,
CASS 11.11.21RRP
The individual client balance for each client must be calculated as follows:(1) the amount paid by the client to the CASS debt management firm; plus(2) the amount of any interest, and any other sums, due to the client;less:(3) the aggregate of the amount of money:(a) paid back to that client; and(b) due and payable by the client to the CASS debt management firm; and(c) paid out to a third party for, or on behalf of, that client.
CASS 11.11.22RRP
Where the individual client balance calculated in respect of an individual client under CASS 11.11.21 R is a negative figure (because the amounts paid by or due to a client under CASS 11.11.21 R (1) and CASS 11.11.21 R (2) are less than the amounts paid out or due and payable by that client under CASS 11.11.21 R (3), that individual client balance should be treated as zero for the purposes of the calculation of the firm'sclient money requirement in CASS 11.11.17 R.
CASS 11.11.23RRP
When a CASS large debt management firm internal client money reconciliation reveals a difference between the client money resource and its client money requirement a CASS large debt management firm must:(1) identify the reason for the difference; (2) ensure that any shortfall in the amount of the client money resource as compared to the amount of the client money requirement is made up by a payment into the firm'sclient bank accounts by the end of the business day following the
CASS 11.11.29RRP
While a CASS large debt management firm is unable to resolve a discrepancy arising from the CASS large debt management firm external client money reconciliation, and one record or a set of records examined by the firm during the reconciliation process indicates that there is a need to have greater amount of client money than is in fact the case, the firm must assume, until the matter is finally resolved, that the record or set of records is accurate and pay its own money into
CASS 11.1.1RRP
1This chapter (the debt management client money chapter) applies to a CASS debt management firm that receives or holds client money as set out in this chapter.
CASS 11.1.2GRP
The requirements imposed on a CASS debt management firm that holds client money vary depending on whether a firm is classified as a CASS small debt management firm or a CASS large debt management firm in CASS 11.2.3 R (CASS debt management firm types). CASS 11.1.4 R to CASS 11.1.6 R indicate which rules in the debt management client money chapter apply to which category of firm.
CASS 11.1.3GRP
The debt management client money chapter applies (to the extent indicated by CASS 11.1.4 R to CASS 11.1.6 R) to a CASS debt management firm, even if at the date of the determination or, as the case may be, the notification, referred to in CASS 11.2.4 R, the CASS debt management firm is not holding client money, provided that:(1) it held client money in the previous calendar year; or(2) it projects to hold client money in the current calendar year.
CASS 11.1.4RRP
Subject to CASS 11.1.6 R, only the rules and guidance in the debt management client money chapter listed in the table below apply to CASS small debt management firms.ReferenceRuleCASS 11.1.1 R to CASS 11.1.4 R and CASS 11.1.6 RApplicationCASS 11.2.1 R to CASS 11.2.9 GFirm classificationCASS 11.3.1 R to CASS 11.3.2 R and CASS 11.3.6 RResponsibility for CASS operational oversightCASS 11.4.1 G to CASS 11.4.4 GDefinition of client money and discharge of fiduciary dutyCASS 11.5.1 R
CASS 11.1.5RRP
Subject to CASS 11.1.6 R, the rules and guidance in the debt management client money chapter apply to CASS large debt management firms, except where indicated otherwise in the relevant rule.
CASS 11.1.6RRP
(1) An authorised professional firm regulated by the Law Society of England and Wales, the Law Society of Scotland or the Law Society of Northern Ireland that, with respect to its regulated activities, is subject to the following rules of its designated professional body, must comply with those rules and, if it does so, it will be deemed to comply with the debt management client money chapter.(2) The relevant rules are: (a) if the firm is regulated by the Law Society of England
CASS 11.13.1RRP
This section (the debt management client money distribution rules) applies to a CASS debt management firm that holds client money which is subject to the debt management client money rules when a primary pooling event or a secondary pooling event occurs.
CASS 11.13.2GRP
The debt management client money distribution rules seek, in the event of the failure of a CASS debt management firm or of an approved bank at which the CASS debt management firm holds client money, to protect client money and to facilitate the timely payment of sums to creditors or the timely return of client money to clients.
CASS 11.13.7RRP
The remaining client money may be transferred under CASS 11.13.6 G only if it will be held by the transferee in accordance with the debt management client money chapter, including the statutory trust in CASS 11.6.1 R.
CASS 11.13.11RRP
(1) Subject to (2), if a secondary pooling event occurs as a result of the failure of an approved bank where one or more client bank accounts are held then in relation to every client bank account of the firm, the provisions of CASS 11.13.12 R (1), CASS 11.13.12 R (2) and CASS 11.13.12 R (3) will apply.(2) CASS 11.13.12 R does not apply if, on the failure of the approved bank, the CASS debt management firm pays to its clients, or pays into a client bank account at an unaffected
CASS 11.13.12RRP
Money held in each client bank account of the firm must be treated as pooled and:(1) any shortfall in client money held, or which should have been held, in client bank accounts, that has arisen as a result of the failure of the approved bank, must be borne by all clients whose client money is held in a client bank account of the firm, rateably in accordance with their entitlements to the pool;(2) a new client money entitlement must be calculated for each client by the firm, to
CASS 11.13.14RRP
Any interest earned on client money following a primary or secondary pooling event will be due to clients in accordance with CASS 11.9.11 R (Interest).
CASS 7A.2.3DGRP
(1) 7If a special administrator has been appointed to the firm under the IBSA Regulations then they will be required to carry out a reconciliation under regulation 10H of the IBSA Regulations. (2) Notwithstanding regulation 10H of the IBSA Regulations, CASS 7.15 has application to a firm after a primary pooling event, meaning, for example, that ongoing compliant record-keeping is required (see CASS 7.15.15R(4) (Internal client money reconciliations) and CASS 7.15.26AR (Frequency
CASS 7A.2.4RRP
If a primary pooling event occurs, then4:(1) (a) in respect of a sub-pool,4 the following is treated as a single notional pool of client money for the beneficiaries of that pool:45(i) any client money held in a client bank account of the firm relating to that sub-pool; and5(ii) any client money held in a client transaction account of the firm relating to that sub-pool, except for client money held in a client transaction account at an authorised central counterparty3 or a clearing
CASS 7A.2.4BGRP
(1) 7The restrictions on transfers of client money at CASS 7A.2.4R(4) are each of the type referred to at regulation 10B(4) of the IBSA Regulations as “a restriction in client money rules”.(2) Where Firm A has complied with the restrictions at CASS 7A.2.4R(4) for any transfers to Firm B, any money transferred to Firm B ceases to be client money held by Firm A (see CASS 7.11.34R(2)(e) (Discharge of fiduciary duty)).(3) But any money returned by Firm B to Firm A in the event of
CASS 7A.2.5RRP
(-2) (a) Subject to paragraph (-2)(b), each client’s entitlement to client money in a notional pool is calculated with reference to the client money requirement as shown by an internal client money reconciliation carried out in accordance with CASS 7.15.15R(4)(a) (Internal client money reconciliations) as at the primary pooling event.7(b) If, as at the primary pooling event, the firm had entered in to one or more cleared margined transactions through the use of a client transaction
CASS 7A.2.6ARRP
(1) 7Before a firm ceases to treat a balance of client money in a notional pool as client money by transferring it to itself under CASS 7.17.2R(5) it must:(a) (subject to paragraph (2)) attempt to distribute the balance to the relevant client or transfer it to another person for safekeeping on behalf of the client in accordance with CASS 7A.2.4R (Pooling and distribution or transfer); (b) (subject to paragraph (3)) take reasonable steps to notify any client in respect of whom
CASS 7A.2.6BGRP
(1) 7A firm may propose to cease to treat a balance of money as client money under CASS 7A.2.6AR(1) where the firm is using the procedure under regulation 12C of the IBSA Regulations to set a ‘hard bar date’ by giving a ‘hard bar date notice’, or another similar procedure in accordance with the legal procedure for the firm’sfailure.(2) In any case, a firm should consider the whether its obligations under law (including trust law) or any agreement permit it to cease to treat a
CASS 7A.2.6CERP
(1) 7Reasonable steps in CASS 7A.2.6AR(1)(b) include the following course of conduct:(a) determining, as far as reasonably possible, the correct contact details for the relevant client;(b) for a client for whom the firm has evidence that it was a professional client for the purposes of the client money rules at the time of the primary pooling event:(i) writing to the client at the last known address either by post or by electronic mail:(A) to inform it of the firm’s intention
CASS 7A.2.9RRP
If a firm receives a mixed remittance after a primary pooling event other than where using the alternative approach under CASS 7.13.62R or under a regulated clearing arrangement to which CASS 7.13.72R applies7, it must:(1) pay the full sum into a client bank account that meets the requirements of CASS 7A.2.7-AR(2)7; and(2) pay the money that is not client money out of that client bank account into a firm's own bank account within one business day of the day on which the firm would
CASS 7A.2.10GRP
Whenever possible the firm should seek to split a mixed remittance before the relevant accounts are credited.
CASS 7A.2.10BGRP
7Where the firm has payment instructions from the client, the firm should pay the money to the order of the client, rather than into a client bank account.
CASS 11.4.1GRP
CASS 11 provides important safeguards for the protection of client money held by CASS debt management firms that sit alongside the fiduciary duty owed by firms in relation to client money. CASS 11.4.2 R to CASS 11.4.4 G provide guidance and rules for when money ceases to be client money for the purposes of both those rules and of the fiduciary duty which CASS debt management firms owe to clients in relation to client money.
CASS 11.4.2RRP
Money ceases to be client money if:(1) it is paid to the client, or a duly authorised representative of the client; or(2) it is:(a) paid to a third party on the instruction of the client, or with the specific consent of the client; or(b) paid to a third party further to an obligation on the firm under any applicable law; or(3) it is paid into an account of the client (not being an account which is also in the name of the firm) on the instruction, or with the specific consent,
CASS 11.4.3RRP
When a CASS debt management firm draws a cheque or other payable order to discharge its fiduciary duty to the client, it must continue to treat the sum concerned as client money until the cheque or order is presented and paid.
CASS 11.4.4GRP
Money is not client money when it is properly due and payable to the firm for its own account. The circumstances in which money may become due and payable to the firm could include when fees have become due and payable from the client to the firm under the agreement between the client and the firm.
COBS 16.4.2RRP
A firm must include the following information4 in a statement of client assets referred to under this section4: (1) details of all the designated investments or client money held by the firm for the client at the end of the period covered by the statement;(2) the extent to which any clientdesignated investments or client money have been the subject of securities financing transactions; and(3) the extent of any benefit that has accrued to the client by virtue of participation in
COBS 16.4.3RRP
In cases where the portfolio of a client includes the proceeds of one or more unsettled transactions, the information in a statement provided under this section may be based either on the trade date or the settlement date, provided that the same basis is applied consistently to all such information in the statement.4
COBS 16.4.4RRP
A firm which holds designated investments or client money and is managing investments for a client may include the statement under this section in the periodic statement it provides to that client.4
COBS 16.4.5GRP
1In reporting to a client in accordance with this section, a firm should consider whether to provide details of any assets loaned or charged including:(1) which investments (if any) were at the end of the relevant period loaned to any third party and which investments (if any) were at that date charged to secure borrowings made on behalf of the portfolio; and(2) the aggregate of any interest payments made and income received during the period in respect of loans or borrowings
CASS 5.1.1RRP
(1) CASS 5.1 to CASS 5.6 apply, subject to (2), (3) and CASS 5.1.3 R to CASS 5.1.6 R, to a firm that receives or holds money in the course of or in connection with its insurance mediation activity.(2) CASS 5.1 to CASS 5.6 do not, subject to (3), apply:(a) to a firm to the extent that it acts in accordance with the client money chapter; or64(b) to a firm in carrying on an insurance mediation activity which is in respect of a reinsurance contract; or(c) to an insurance undertaking
CASS 5.1.2GRP
A firm that is an approved bank, and relies on the exemption under CASS 5.1.1 R (2)(e), should be able to account to all of its clients for amounts held on their behalf at all times. A bank account opened with the firm that is in the name of the client would generally be sufficient. When money from clients deposited with the firm is held in a pooled account, this account should be clearly identified as an account for clients. The firm should also be able to demonstrate that an
CASS 5.1.5ARRP
3CASS 5.1.5 R (1)(b) and CASS 5.1.5 R (2) do not apply, and hence money is client money, in any case where:(1) in relation to an activity specified in CASS 5.2.3 R (1) (a) to CASS 5.2.3 R (1) (c), the insurance undertaking has agreed that the firm may treat money which it receives and holds as agent of the undertaking, as client money and in accordance with the provisions of CASS 5.3 to CASS 5.6; and(2) the agreement in (1) is in writing and adequate to show that the insurance
CASS 5.1.7GRP
(1) Principle 10 (Clients' assets) requires a firm to arrange adequate protection for clients' assets when the firm is responsible for them. An essential part of that protection is the proper accounting and handling of client money. The rules in CASS 5.1 to CASS 5.6 also give effect to the requirement in article 4.4 of the Insurance Mediation Directive5 that all necessary measures should be taken to protect clients against the inability of an insurance intermediary to transfer
CASS 5.1.8GRP
Firms which carry on designated investment business which may, for example, involve them handling client money in respect of life assurance business should refer to the non-directive client money chapter4 which includes provisions enabling firms to elect to comply solely with that chapter4 or with the insurance client money chapter4 in respect of that business. Firms that also carry on5MiFID or equivalent third country business5 may elect to comply solely with the MiFID client money
CASS 7A.3.8ARRP
3If a secondary pooling event occurs as a result of the failure of an authorised central counterparty: (1) any money held in a client transaction account that is an individual client account at the failedauthorised central counterparty is not pooled by the firm with any of its other client money;(2) any money held in a client transaction account that is an omnibus client account at the failedauthorised central counterparty is not pooled by the firm with any of its other client
CASS 7A.3.10RRP
For each client with a designated client bank account maintained by the firm for the general pool or a particular sub-pool and2 held at the failed bank:(1) any secondary pooling shortfall3 in client money held, or which should have been held, in designated client bank accounts that has arisen as a result of the failure, must be borne by all the clients of the relevant pool2 whose client money is held in a designated client bank account of the firm at the failed bank, rateably
CASS 7A.3.11RRP
Money held by the firm2 in each designated client fund account for the general pool or a particular sub-pool with the failedbank must be treated as pooled with any other designated client fund accounts for the general pool or a particular sub-pool as the case may be2 which contain part of the same designated fund and:2(1) any secondary pooling shortfall3 in client money held, or which should have been held, in designated client fund accounts that has arisen as a result of the
CASS 7A.3.13RRP
Client money received by the firm after the failure of a bank, exchange, clearing house, intermediate broker, settlement agent or OTC counterparty,3 that would otherwise have been paid into a client bank account or client transaction account at that bank, exchange, clearing house, intermediate broker, settlement agent or OTC counterparty, as the case may be3, for either the general pool or a particular sub-pool2:(1) must not be transferred to the failedperson3 unless specifically
CASS 7A.3.14RRP
If a firm receives a mixed remittance after the secondary pooling event which consists of client money that would have been paid into a general client bank account, a designated client bank account or a designated client fund account maintained at the bank that has failed, it must:(1) pay the full sum into a client bank account other than one operated at the bank that has failed; and(2) pay the money that is not client money out of that client bank account within one business
CASS 7A.3.15GRP
Whenever possible the firm should seek to split a mixed remittance before the relevant accounts are credited.
CASS 1A.2.2RRP
(1) A firm must once every year, and by the time it is required to make a notification in accordance with4CASS 1A.2.9R (4), determine whether it is a CASS large firm, CASS medium firm or a CASS small firm according to the amount of client money or safe custody assets which it holds, using the limits set out in the table in CASS 1A.2.7 R.4(2) For the purpose of determining its ‘CASS firm type’ in accordance with CASS 1A.2.7 R, a firm must:(a) if it currently holds client money
CASS 1A.2.3RRP
For the purpose of calculating the value of the total amounts of client money and safe custody assets that it holds on any given day during a calendar year a firm must:(1) in complying with CASS 1A.2.2R (2)(a), base its calculation upon internal reconciliations performed during the previous year;(2) in relation to client money or safe custody assets denominated in a currency other than sterling, translate the value of that money or that safe custody assets into sterling at the
CASS 1A.2.6GRP
CASS 1A.2.5 R provides a firm with the ability to opt in to a higher category of ‘CASS firm type’. This may be useful for a firm whose holding of client money and safe custody assets is near the upper categorisation limit for a CASS small firm or a CASS medium firm.
CASS 1A.2.7RRP
CASS firm typesCASS firm typeHighest total amount of client money held during the firm’s last calendar year or as the case may be that it projects that it will hold during the current calendar yearHighest total value of safe custody assets held by the firm during the firm's last calendar year or as the case may be that it projects that it will hold during the current calendar yearCASS large firmmore than £1 billion more than £100 billion CASS medium firman amount equal to or greater
CASS 1A.2.9RRP
Once every calendar year a firm must notify to the FCA in writing the information specified in (1), (2) or (3) as applicable, and the information specified in (4), in each case no later than the day specified in (1) to (4):44(1) if it held client money or safe custody assets in the previous calendar year, the highest total amount of client money and the highest total value of safe custody assets held during the previous calendar year, notification of which must be made no later
CASS 1A.2.12RRP
4A firm's 'CASS firm type' and any change to it takes effect:(1) if the firm notifies the FCA in accordance with CASS 1A.2.9 R (1) or CASS 1A.2.9 R (2), on 1 February following the notification; or(2) if the firm notifies the FCA in accordance with CASS 1A.2.9 R (3), on the day it begins to hold client money or safe custody assets; or(3) if the firm makes an election under CASS 1A.2.5 R (1), and provided the conditions in CASS 1A.2.5 R (2) are satisfied, on the day the notification
CASS 5.2.1GRP
If a firm holds money as agent of an insurance undertaking then the firm'sclients (who are not insurance undertakings) will be adequately protected to the extent that the premiums which it receives are treated as being received by the insurance undertaking when they are received by the agent and claims money and premium refunds will only be treated as received by the client when they are actually paid over. The rules in CASS 5.2 make provision for agency agreements between firms
CASS 5.2.2GRP
(1) Agency agreements between insurance intermediaries and insurance undertakings may be of a general kind and facilitate the introduction of business to the insurance undertaking. Alternatively, an agency agreement may confer on the intermediary contractual authority to commit the insurance undertaking to risk or authority to settle claims or handle premium refunds (often referred to as "binding authorities"). CASS 5.2.3 R requires that binding authorities of this kind must
CASS 5.2.4GRP
Firms are reminded that CASS 5.1.5A R1 provides that, if the insurance undertaking has agreed in writing, 1money held in accordance with an agreement made under CASS 5.2.3 R may be treated as 1client money and may (but not otherwise) 1be kept in a client bank account.
CASS 5.2.6GRP
A firm may,1 in accordance with CASS 5.2.3 R (4), arrange for an insurance undertaking to accept responsibility for the money held by its appointed representatives, field representatives, and other agents, in which event CASS 5.5.18 R to CASS 5.5.25 G will not apply.1
CASS 7.17.2RRP
Subject to CASS 7.17.3 R in respect of a trustee firm, a firm receives and holds client money as trustee on the following terms:(1) for the purposes of, and on the terms of, the client money rules and the client money distribution and transfer rules1; (2) (a) where a firm maintains only a general pool of client money, subject to (4), for the clients (other than clients which are insurance undertakings when acting as such with respect to client money received in the course of insurance
CASS 7.17.3RRP
A trustee firm which is subject to the client money rules by virtue of CASS 7.10.1 R (2) receives and holds client money as trustee on the terms in CASS 7.17.2 R, subject to its obligations to hold client money as trustee under the relevant instrument of trust.
CASS 7.17.5GRP
The statutory trust under CASS 7.17.2 R does not permit a firm, in its capacity as trustee, to use client money to advance credit to the firm's clients, itself, or any other person. For example, if a firm wishes to undertake a transaction for a client in advance of receiving client money from that client to fund that transaction, it should not advance credit to that client or itself using other clients'client money (ie, it should not 'pre-fund' the transaction using other clients'
CASS 7.19.25RRP
The records maintained under this section, including the sub-pool disclosure documents, are a record of the firm that must be kept in a durable medium for at least five years following the date on which client money was last held by the firm for a sub-pool to which those records or the sub-pool disclosure document applied.
CASS 7A.1.1RRP
1 Subject to CASS 7A.1.1A R, this2 chapter (the client money distribution and transfer rules4) applies to a firm that holds client money which is subject to the client money rules when a pooling event2 occurs.22
CASS 7A.1.1BGRP
2As a result of CASS 7A.1.1A R, the client money distribution and transfer rules4 relating to primary pooling events and secondary pooling events will not affect any client money held by a firm in its capacity as trustee firm. Instead, the treatment of that client money will be determined by the terms of the relevant instrument of trust or by applicable law. However, the client money distribution and transfer rules4 do apply to a firm for any client money that it holds other