Related provisions for CASS 7.16.20

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CASS 7.10.1RRP
11This chapter applies to a firm that receives money from or holds money for, or on behalf of, a client in the course of, or in connection with, its:(1) MiFID business; and/or(2) designated investment business; and/or3(3) stocks and shares ISA business;3 and/or5(4) innovative finance ISA business;5 and/or6(5) lifetime ISA business,6unless otherwise specified in this section.
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 7.10.3RRP
(1) A firm that receives or holds money to which this chapter applies in relation to:(a) its MiFID business; or (b) its MiFID business and its designated investment business which is not MiFID business; and holds money in respect of which CASS 5 applies, may elect to comply with the provisions of this chapter in respect of all such money and if it does so, this chapter applies as if all such money were money that the firm receives and holds in the course of, or in connection with,
CASS 7.10.3ARRP
3Where a firm opts into this chapter under CASS 7.10.3 R (2A) it must notify clients for whom it holds the opted-in money that it is holding their money in accordance with the client money rules.
CASS 7.10.5GRP
The opt-in to the client money rules under CASS 7.10.3R4 does not apply in respect of money that a firm holds outside of either the:3(1) scope of the insurance client money chapter; or3(2) relevant cash deposit ISA wrapper;3as the case may be.3
CASS 7.10.7ARRP
(1) 4If both the conditions in (a) and (b) below are met in respect of a firm, or the firm reasonably expects that they will all be met in the future, then the firm has the option to elect to comply with this chapter for all of the money described in those conditions: (a) the firm receives or holds money for one or more persons in the course of, or in connection with, the firm’s activity of operating an electronic system in relation to non-P2P agreements; and(b) those persons
CASS 7.10.7BRRP
(1) 4When a firm makes an election under CASS 7.10.7AR it must write to any customer (“C”) with whom it has agreed to provide relevant electronic lending services in C’s capacity as a lender or prospective lender, informing C at least one month before it will start to hold the money in accordance with the client money rules:(a) that all the money it holds in the course of, or in connection with, operating an electronic system in relation to non-P2P agreements for lenders and
CASS 7.10.7CRRP
4Once an election made by a firm under CASS 7.10.7AR becomes effective, and until it ceases to be effective:(1) the firm must treat all the money referred to under CASS 7.10.7AR(1) in accordance with the election; and (2) for the purposes of (1), this chapter applies to the firm in the same way that it applies to a firm that receives and holds money in the course of or in connection with its designated investment business, except that:(a) CASS 7.10.10R will not apply to the money
CASS 7.10.7DRRP
4If a firm that has made an election under CASS 7.10.7AR subsequently decides to cancel that election:(1) it can only do so by writing to the FCA, at least one month before the date the election ceases to be effective; (2) it must write to any customer with whom, as at the time of the cancellation, it has agreed to operate an electronic system in relation to non-P2P agreements in their capacity as a lender or prospective lender, informing them at least one month before the date
CASS 7.10.7FGRP
(1) 4Where a firm has made an election under CASS 7.10.7AR: (a) it should treat money held for a client as client money both in the course of or in connection with: (i) operating an electronic system in relation to lending; and(ii) operating an electronic system in relation to non-P2P agreements;(b) (a) is regardless of whether, at the time the firm is holding the money, the client could or could not be a lender under a P2P agreement; and(c) under SYSC 4.1.8ER(2) it will be not
CASS 7.10.8RRP
CASS 7.10.9 G to CASS 7.10.15 G do not apply to a firm in relation to money held in connection with its MiFID business to which this chapter applies or in relation to money for which the firm has made an election under CASS 7.10.3 R(1) or CASS 7.10.7AR4.
CASS 7.10.10RRP
Subject to CASS 7.10.12 R, money is not client money when a firm (other than a sole trader) holds that money on behalf of, or receives it from, a professional client, other than in the course of insurance distribution activity10, and the firm has obtained written acknowledgement from the professional client that:(1) money will not be subject to the protections conferred by the client money rules;(2) as a consequence, this money will not be segregated from the money of the firm
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 distribution activity10:(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 7.10.13GRP
When a firm undertakes a range of business for a professional client and has separate agreements for each type of business undertaken, the firm may treat client money held on behalf of the client differently for different types of business; for example, a firm may, under CASS 7.10.10 R or CASS 7.10.12 R, elect to segregate client money in connection with securities transactions and not segregate (by complying with CASS 7.10.10 R or CASS 7.10.12 R) money in connection with contingent
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 7.10.21GRP
Where a firm receives money that would otherwise be held as client money but for CASS 7.10.16 R:(1) it should be able to account to all of its clients for sums held for them at all times; and(2) that money should, pursuant to Principle 10, be allocated to the relevant client promptly. This should be done no later than ten business days after the firm has received the money.
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 7.10.28RRP
(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 7.10.29RRP
This chapter does not apply to the permitted activities of a long-term insurer or a friendly society, unless it is a MiFID investment firm that receives money from or holds money for or on behalf of a client in the course of, or in connection with, its MiFID business.
CASS 7.10.30RRP
(1) Provided it complies with CASS 1.2.11 R, a firm that receives or holds client money in relation to contracts of insurance may elect to comply with the provisions of the insurance client money chapter, instead of this chapter, in respect of all such money.(2) This rule is subject to CASS 1.2.11 R.
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 distribution activity10;
CASS 7.10.33RRP
A trustee firm which holds money in relation to its designated investment business which is not MiFID business to which this chapter applies, must hold any such client money separate from its own money at all times.
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 7.10.36RRP
A trustee firm to which CASS 7.10.34 R applies and which is otherwise subject to the client money rules must ensure that any client money it holds other than in its capacity as trustee firm is segregated from client money it holds 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 6.6.1GRP
This section sets out the requirements a firm must meet when keeping records and accounts of the safe custody assets it holds for clients.
CASS 6.6.2RRP
A firm must keep such records and accounts as necessary to enable it at any time and without delay to distinguish safe custody assets held for one client from safe custody assets held for any other client, and from the firm's own applicable assets.[Note: article 2(1)(a) of the MiFID Delegated Directive6]
CASS 6.6.3RRP
A firm must maintain its records and accounts in a way that ensures their accuracy, and in particular their correspondence to the safe custody assets held for clients and that they may be used as an audit trail6.[Note: article 2(1)(b) of the MiFID Delegated Directive6]
CASS 6.6.10GRP
(1) An internal custody record check is one of the steps a firm takes to satisfy its obligations under:(a) Principle 10 (Clients' assets);(b) CASS 6.2.2 R (Requirement to have adequate organisational arrangements);(c) CASS 6.6.2 R to CASS 6.6.4 R (Records and accounts); and(d) where relevant, SYSC 4.1.1 R (General requirements) and SYSC 6.1.1 R (Compliance).(2) An internal custody record check is a check as to whether the firm's records and accounts of the safe custody assets
CASS 6.6.11RRP
(1) A firm must perform an internal custody record check:(a) subject to paragraph7 (2), as regularly as is necessary but without allowing more than one month to pass between each internal custody record check; and(b) as soon as reasonably practicable after the date to which the internal custody record check relates.(2) A firm that holds no safe custody assets other than physical safe custody assets must perform an internal custody record check as regularly as necessary but, in
CASS 6.6.19RRP
The internal system evaluation method requires a firm to:(1) establish a process that evaluates: (a) the completeness and accuracy of the firm's internal records and accounts of safe custody assets held by the firm for clients, in particular whether sufficient information is being completely and accurately recorded by the firm to enable it to:(i) comply with CASS 6.6.4 R; and(ii) readily determine the total of all the safe custody assets that the firm holds for its clients; and(b)
CASS 6.6.20GRP
The evaluation process under CASS 6.6.19R (1) should verify that the firm's systems and controls correctly identify and resolve at least the following types or causes of discrepancies:(1) items in the firm's records and accounts that might be erroneously overstating or understating the safe custody assets held by a firm (for example, 'test' entries and 'balancing' entries);(2) negative balances;(3) processing errors;(4) journal entry errors (eg, omissions and unauthorised system
CASS 6.6.21GRP
(1) A physical asset reconciliation is a separate process to the internal custody record check. Firms that hold physical safe custody assets for clients are required to perform both processes. (2) The purpose of a physical asset reconciliation is to check that a firm's internal records and accounts of the physical safe custody assets kept by the firm for clients are accurate and complete, and to ensure any discrepancies are investigated and resolved.
CASS 6.6.22RRP
A firm that holds physical safe custody assets must perform a physical asset reconciliation for all the physical safe custody assets it holds for clients:(1) as regularly as is necessary but without allowing more than six months to pass between each physical asset reconciliation; and(2) as soon as reasonably practicable after the date to which the physical asset reconciliation relates.
CASS 6.6.24RRP
When performing a physical asset reconciliation a firm must:(1) count all the physical safe custody assets held by the firm for clients as at the date to which the physical asset reconciliation relates; and(2) compare the count in (1) against what the firm's internal records and accounts state as being in the firm's possession as at the same date.
CASS 6.6.26GRP
Regardless of the method used, a firm should ensure that all safe custody assets held by the firm as physical safe custody assets for clients are subject to a physical asset reconciliation at the frequency required under CASS 6.6.22 R.
CASS 6.6.27RRP
If a firm completes a physical asset reconciliation in a single stage, such that the firm:(1) performs a single count under CASS 6.6.24R (1) which encompasses all the physical safe custody assets held by the firm for clients as at the date to which the physical asset reconciliation relates; and (2) compares that count against the firm's internal records and accounts in accordance with CASS 6.6.24R (2);then the firm will have used the total count method for that physical asset
CASS 6.6.28RRP
If a firm completes a physical asset reconciliation in two or more stages, such that the firm: (1) performs two or more counts under CASS 6.6.24R (1) (each on a separate occasion and relating to a different stock line or group of stock lines forming part of the firm's overall holdings of physical safe custody assets) which, once all of the counts are complete, encompass all the physical safe custody assets held by the firm for clients; and (2) compares each of those counts against
CASS 6.6.31GRP
The documents under CASS 6.6.30R (1) should, for example, cover the systems and controls the firm will have in place to mitigate the risk of 'teeming and lading' in respect of all the physical safe custody assets held by the firm for clients and across all the firm's business lines.
CASS 6.6.32GRP
To meet the requirement to have adequate organisational arrangements under CASS 6.2.2 R, a firm should consider performing 'spot checks' as to whether title to an appropriate sample of physical safe custody assets that it holds is registered correctly under CASS 6.2.3 R (Registration and recording of legal title).
CASS 6.6.33GRP
The purpose of an external custody reconciliation is to ensure the completeness and accuracy of a firm's internal records and accounts of safe custody assets held by the firm for clients against those of relevant third parties.
CASS 6.6.34RRP
A firm must conduct, on a regular basis, reconciliations between its internal records and accounts of safe custody assets held by the firm for clients and those of any third parties by whom those safe custody assets are held.[Note: article 2(1)(c) of the MiFID Delegated Directive6]
CASS 6.6.39GRP
Where a firm holds clients'safe custody assets electronically with a central securities depositary which is able to provide adequate information to the firm on its holdings on a daily basis, it is best practice under CASS 6.6.37R (1) for the firm to conduct an external custody reconciliation each business day in respect of those assets.
CASS 6.6.42GRP
External custody reconciliations must be performed for each safe custody asset held by the firm for its clients, except for physical safe custody assets. A reconciliation of transactions involving safe custody assets, rather than of the safe custody assets themselves, will not satisfy the requirement under CASS 6.6.34 R.
CASS 6.6.43GRP
A firmacting as trustee or depositary of an AIF that is an authorised AIF should perform the reconciliation under article 89(1)(c) (Safekeeping duties with regard to assets held in custody) of the AIFMD level 2 regulation: (1) as regularly as is necessary having regard to the frequency, number and value of transactions which the firm undertakes in respect of safe custody assets, but with no more than one month between each reconciliation; and(2) as soon as reasonably practicable
CASS 6.6.44RRP
When determining the frequency at which it will undertake its internal custody record checks under CASS 6.6.11 R, physical asset reconciliations under CASS 6.6.22 R, and external custody reconciliations under CASS 6.6.37 R, a firm must have regard to: (1) the frequency, number and value of transactions which the firm undertakes in respect of clients'safe custody assets; and(2) the risks to which clients'safe custody assets are exposed, such as the nature, volume and complexity
CASS 6.6.46ARRP
(1) 7This rule applies to a firm following its failure. (2) A firm must perform an internal custody record check and a physical asset reconciliation that relates to the time of its failure as soon as reasonably practicable after its failure.(3) (a) A firm must perform an external custody reconciliation that relates to the time of its failure as soon as reasonably practicable after its failure.(b) If any records and accounts of the relevant third parties under CASS 6.6.35R relating
CASS 6.6.48GRP
In this section, a discrepancy should not be considered to be resolved until it is fully investigated and corrected, and any associated shortfall is made good by way of the firm ensuring that:(1) it is holding (under the custody rules) each of the safe custody assets that the firm ought to be holding for each of its clients; and(2) its own records, and the records of any relevant other person (such as a third party with whom the firm deposited the safe custody assets) accurately
CASS 6.6.54RRP
(1) This rule applies where a firm identifies a discrepancy as a result of, or that reveals, a shortfall, which the firm has not yet resolved.(2) Subject to paragraphs (3) and (4)7, until the discrepancy is resolved a firm must do one of the following:(a) appropriate a sufficient number of its own applicable assets to cover the value of the shortfall and hold them for the relevant clients under the custody rules in such a way that the applicable assets, or the proceeds of their
CASS 6.6.57RRP
A firm must inform the FCA in writing without delay if:(1) its internal records and accounts of the safe custody assets held by the firm for clients are materially out of date, or materially inaccurate or invalid, so that the firm is no longer able to comply with the requirements in CASS 6.6.2 R to CASS 6.6.4 R; or(2) 5it is a firmacting as trustee or depositary of an AIF and has not complied with, or is materially unable to comply with, the requirements in CASS 6.6.2 R or in
CASS 7.13.8RRP
(1) A firm that does not deposit client money with a central bank must exercise all due skill, care and diligence in the selection, appointment and periodic review of the CRD credit institution, bank or qualifying money market fund where the money is deposited and the arrangements for the holding of this money. 6(2) The firm must consider the need for diversification as part of its due diligence under (1).6[Note: article 4(2) first sub-paragraph of the MiFID Delegated Directi
CASS 7.13.10RRP
When a firm makes the selection, appointment and conducts the periodic review of a CRD credit institution, a bank or a qualifying money market fund, it must take into account:(1) the expertise and market reputation of the third party with a view to ensuring the protection of clients’ rights6; and(2) any legal or regulatory6 requirements or market practices related to the holding of client money that could adversely affect clients' rights. [Note: article 4(2) second sub-paragraph
CASS 7.13.11GRP
In complying with CASS 7.13.8 R and CASS 7.13.10 R, a firm should consider, as appropriate, together with any other relevant matters:(1) the capital of the CRD credit institution or bank;(2) the amount of client money placed, as a proportion of the CRD credit institution or bank's capital and deposits, and, in the case of a qualifying money market fund, compared to any limit the fund may place on the volume of redemptions in any period;(3) the extent to which client money that
CASS 7.13.12RRP
A firm must take the necessary steps to ensure that client money deposited, in accordance with CASS 7.13.3 R, in a central bank, a credit institution, a bank authorised in a third country6 or a qualifying money market fund is held in an account or accounts identified separately from any accounts used to hold money belonging to the firm.[Note: article 2(1)(e) of the MiFID Delegated Directive6]
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 7.13.20-AGRP
(1) 6In CASS 7.13.20R to CASS 7.13.25Rclient money means money deposited under CASS 7.13.3R and therefore includes money deposited under CASS 7.13.3R: (a) in an account opened with a qualifying money market fund; or (b) invested in units or shares of a qualifying money market fund.(2) But client money held under CASS 7.14.2R does not fall within the scope of the diversification provisions at CASS 7.13.20R to CASS 7.13.25R.
CASS 7.13.20RRP
Notwithstanding the requirement at CASS 7.13.22 R a firm must limit the funds that it deposits or holds with a relevant group entity or combination of such entities so that the value of those funds do not at any point in time exceed 20 per cent of the total of all the client money held by the firm under CASS 7.13.3R6.[Note: article 4(3) first sub-paragraph of the MiFID Delegated Directive]6
CASS 7.13.21ARRP
(1) 6A firm need not comply with CASS 7.13.20R if, following an assessment, it is able to demonstrate that the requirement under that rule is not proportionate, in view of: (a) the small balance of client money that it holds; (a) the nature, scale and complexity of its business; and (a) the safety offered by the relevant third parties referred to under CASS 7.13.20R.(2) A firm must review any assessment it makes under (1) periodically. (3) A firm must notify its assessment under
CASS 7.13.21BGRP
(1) 6In relation to the requirement to take account of a firm’s “small balance” of client money at CASS 7.13.21AR(1)(a):(a) the FCA expects a firm that would not qualify to be a CASS small firm under the rules in CASS 1A.2, ignoring any safe custody assets that it holds, to have difficulty in justifying using the approach in CASS 7.13.21AR(1);(b) a firm should calculate its client money balance for these purposes in the same way required under CASS 1A.2.3R, and base its assessment
CASS 7.13.22RRP
Subject to the requirement at CASS 7.13.20 R, and in accordance with Principle 10 and CASS 7.12.1 R, a firm must: (1) periodically review6 whether it is appropriate to diversify (or further diversify) the third parties with which it deposits some or all of the client money that the firm holds; and(2) whenever it concludes that it is appropriate to do so, it must make adjustments accordingly to the third parties it uses and to the amounts of client money deposited with them.[Note:
CASS 7.13.23GRP
In complying with the requirement in CASS 7.13.22 R to periodically review6 whether diversification (or further diversification) is appropriate, a firm should have regard to:(1) whether it would be appropriate to deposit client money in client bank accounts opened at a number of different third parties; (2) whether it would be appropriate to limit the amount of client money the firm holds with third parties that are in the same group as each other;(3) whether risks arising from
CASS 7.13.28RRP
(1) A firm must inform a client that money placed with a qualifying money market fund will not be held in accordance with the requirements for holding client money.6(2) A firm must ensure that, having provided the information to the client under (1), the client gives its explicit consent to the placement of their money in a qualifying money market fund. 6[Note: article 4(2) third sub-paragraph to the MiFID Delegated Directive6]
CASS 7.13.29AGRP
6A firm may comply with CASS 7.13.28 R(1) by informing the client that the units or shares in the qualifying money market fund will be held as safe custody assets.
CASS 7.13.30RRP
A firm may segregate client money in a different currency from that in which it was received or in which the firm is liable to the relevant client. If it does so the firm must ensure that the amount held is adjusted each day to an amount at least equal to the original currency amount (or the currency in which the firm has its liability to its clients, if different), translated at the previous day's closing spot exchange rate.
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 7.13.51RRP
The prudent segregation record must record:(1) the outcome of the firm's calculation of its prudent segregation;(2) the amounts paid into or withdrawn from a client bank account pursuant to CASS 7.13.41 R or CASS 7.13.49 R;(3) why each payment or withdrawal is made;(4) in respect of the firm's written policy required by CASS 7.13.43 R the firm must record, as applicable, either:(a) that the payment or withdrawal is made in accordance with that policy; or(b) that the policy will
CASS 7.13.62RRP
A firm that uses the alternative approach for a particular business line must, on each business day ('T0'):(1) receive any money from and pay any money to (or, in either case, on behalf of) clients into and out of its own bank accounts; (2) perform the necessary reconciliations of records and accounts required under CASS 7.15 (Records, accounts and reconciliations);(3) adjust the balances held in its client bank account (by effecting transfers between its own bank account and
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 7.13.65RRP
(1) A firm that uses the alternative approach must, in addition to CASS 7.13.62 R, pay an amount (determined in accordance with this rule) of its own money into its client bank account and subsequently retain that money in its client bank account (alternative approach mandatory prudent segregation). The amount segregated by a firm in its client bank account under this rule is client money for the purposes of the client money rules and the client money distribution and transfer
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 5.5.3RRP
A firm must, except to the extent permitted by CASS 5.5, hold client money separate from the firm'smoney.
CASS 5.5.9RRP
A firm must not hold money other than client money in a client bank account unless it is:(1) a minimum sum required to open the account, or to keep it open; or(2) money temporarily in the account in accordance with CASS 5.5.16 R (Withdrawal of commission and mixed remittance); or(3) interest credited to the account which exceeds the amount due to clients as interest and has not yet been withdrawn by the firm.
CASS 5.5.11RRP
A firm, when acting in accordance with CASS 5.3 (statutory trust), must ensure that the total amount of client money held for each client in any of the firm'sclient moneybankaccounts is positive and that no payment is made from any such account for the benefit of a client unless the client has provided the firm with cleared funds to enable the payment to be made.
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 5.5.15GRP
A firm which takes advantage of CASS 5.5.14 R will need to consider whether its permission should include the permitted activity of managing investments. If the firm is granted a power to manage with discretion the funds over which it is appointed as trustee under the trust deed required by CASS 5.4 then it will be likely to need a permission to manage investments. It is unlikely to need such a permission, however, if it is merely granted a power to invest but the deed stipulates
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 5.5.23RRP
(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 5.5.30RRP
(1) In relation to consumers5, a firm must, subject to (2), take reasonable steps to ensure that its terms of business or other client agreements4 adequately explain, and where necessary obtain a client's informed consent to, the treatment of interest and, if applicable, investment returns, derived from its holding of client money and any segregated designated investments.54(2) In respect of interest earned on client bank accounts, (1) does not apply if a firm has reasonable ground
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 5.5.36GRP
A firm should not hold excess client money with another broker. It should be held in a client bank account.
CASS 5.5.37GRP
The FCA generally requires a firm to place client money in a client bank account with an approved bank. However, a firm which is an approved bank must not (subject to CASS 5.1.1 R (2)(e)) hold client money in an account with itself.
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 5.5.47RRP
Subject to CASS 5.5.41 R, a firm that holds or intends to hold client money with a bank which is in the same group as the firm must:(1) undertake a continuous review in relation to that bank which is at least as rigorous as the review of any bank which is not in the same group, in order to ensure that the decision to use a group bank is appropriate for the client;(2) disclose in writing to its client at the outset of the client relationship (whether by way of a client agreement,4terms of
CASS 5.5.53RRP
A firm must not hold, for a consumer5, client money in a client bank account outside the United Kingdom, unless the firm has previously disclosed to the consumer5 (whether in its terms of business, client agreement8 or otherwise in writing):558(1) that his money may be deposited in a client bank account outside the United Kingdom but that the client may notify the firm that he does not wish his money to be held in a particular jurisdiction;(2) that in such circumstances, the legal
CASS 5.5.56RRP
If a client has notified a firm in writing before entering into a transaction that client money is not to be held in a particular jurisdiction, the firm must either:(1) hold the client money in a client bank account in a jurisdiction to which the client has not objected; or(2) return the client money to, or to the order of, the client.
CASS 5.5.60RRP
If a client has notified a firm before entering into a transaction that he does not wish his money to be passed to another broker or settlement agent located in a particular jurisdiction, the firm must either:(1) hold the client money in a client bank account in the United Kingdom or a jurisdiction to which the money has not objected and pay its own money to the firm's own account with the broker, agent or counterparty; or(2) return the money to, or to the order of, the clien
CASS 5.5.61RRP
On the failure of a third party with which client money is held, a firm must notify the FCA:(1) as soon as it becomes aware, of the failure of any bank, other broker or settlement agent or other entity with which it has placed, or to which it has passed, client money; and(2) as soon as reasonably practical, whether it intends to make good any shortfall that has arisen or may arise and of the amounts involved.
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 5.5.79GRP
The purpose of CASS 5.5.80 R to CASS 5.5.83 R is to set out those situations in which a firm will have fulfilled its contractual and fiduciary obligations in relation to any client money held for or on behalf of its client, or3 in relation to the firm's ability to require repayment of that money from a third party3.
CASS 7.16.3GRP
Regardless of whether a firm is following one of the standard methods of internal client money reconciliation or a non-standard method of internal client money reconciliation, it is reminded that it must maintain its records so that it is able to promptly calculate the total amount of client money it should be holding for each client (see CASS 7.15.15 R (1)).
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 7.16.14GRP
(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 7.16.17RRP
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 7.16.21RRP
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 7.16.25RRP
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 7.16.29RRP
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 7.16.30RRP
The terms 'client's equity balance' and 'firm's equity balance' refer to cash values and do not include non-cash collateral or other designated investments (including approved collateral) the firm holds for a margined transaction.
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 7.16.33RRP
(1) To meet the total margin transaction requirement3, a firm may appropriate and use its own approved collateral, provided it meets the requirements in (2). (2) The firm must hold the approved collateral in a way which ensures that, in accordance with CASS 7A.2.3A R, the approved collateral will be liquidated on the occurrence of a primary pooling event and the proceeds paid into a client bank account, and in so doing:(a) ensure the approved collateral is clearly identifiable
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 11.13.3RRP
A primary pooling event occurs:(1) on the failure of a CASS debt management firm;(2) on the vesting of assets in a trustee in accordance with an 'assets requirement' imposed under section 55P(1)(b) or (c) (as the case may be) of the Act where such a requirement is imposed in respect of all client money held by the firm.
CASS 11.13.4RRP
If a primary pooling event1 occurs, then:2(1) all client money:2(a) held in the CASS debt management firm'sclient bank accounts; and (b) received by the CASS debt management firm on behalf of a client but not yet paid into the firm'sclient bank accounts;is treated as pooled together to form a notional pool;(2) a CASS debt management firm must calculate the amount it should be holding on behalf of each individual client as at the time of the primary pooling event using the method
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 11.13.8RRP
If there is a shortfall in the client money transferred under CASS 11.13.6 G then the client money must be allocated to each of the clients for whom the client money was held so that each client is allocated a sum which is rateable to that client's client money entitlement in accordance with CASS 11.13.4 R (2). This calculation may be done by either transferor or transferee in accordance with the terms of any transfer.
CASS 11.13.9RRP
The transferee must, within seven days after the transfer of client money under CASS 11.13.6 G notify clients that:(1) their money has been transferred to the transferee; and (2) they have the option of having client money returned to them or to their order by the transferee, otherwise the transferee will hold the client money for the clients and conduct debt management activities for those clients.
CASS 11.13.10RRP
A secondary pooling event occurs on the failure of an approved bank at which a CASS debt management firm holds client money in a client bank account.
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 11.13.13RRP
The term 'which should have been held' is a reference to the failed approved bank's failure to hold the client money at the time of the pooling event.
CASS 7A.3.1RRP
A secondary pooling event occurs on the failure of a person3 to which client money held by the firm has been transferred underCASS 7.13.3R (1) to CASS 7.13.3R (3) (Depositing client money) or CASS 7.14.2 R2 (Client money held by a third party3).2
CASS 7A.3.4GRP
When a person to which client money held by the firm has been transferred under CASS 7.13.3R(1) to CASS 7.13.3R(3) (Depositing client money) or CASS 7.14.2R (Client money held by a third party) fails,3 and the firm decides not to make good any secondary pooling shortfall3 in the amount of client money held at that person (see CASS 7A.3.2R(2))3, a secondary pooling event will occur3. The firm should3 reflect the secondary pooling shortfall3 that arises3 in the general pool (where
CASS 7A.3.6RRP
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, and/or where one or more designated client bank accounts or designated client fund accounts are held,3 for the general pool or a3 particular sub-pool2, then:(1) in relation to every general client bank account of the firm maintained in respect of that pool2, the provisions of CASS 7A.3.8 R, CASS 7A.3.13 R and CASS 7A.3.14 R will apply;(2) in relation
CASS 7A.3.6AGRP
3Depending on the person at which the secondary pooling event occurs, the types of client bank accounts and client transaction accounts that are affected by the secondary pooling shortfall, and the nature of a firm’s business with a particular client, it is possible that the client’s overall entitlement to client money held by the firm may be affected by a combination of CASS 7A.3.8R, CASS 7A.3.8AR, CASS 7A.3.10R and CASS 7A.3.11R.
CASS 7A.3.8RRP
Money Subject to CASS 7A.3.8AR, if a secondary pooling event occurs as a result of the failure of a bank, intermediate broker, settlement agent, OTC counterparty, exchange or clearing house, money3 held in each general client bank account and client transaction account of the firm for the general pool or a sub-pool2must be treated as pooled and:(1) any secondary pooling shortfall3 in client money held, or which should have been held, in general client bank accounts and client
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.3.9GRP
The term "which should have been held" is a reference to the relevant failedperson’s3 failure1 to hold the client money at the time of its failure3.
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.3.12RRP
A client whose money was held, or which should have been held, in a designated client bank account with a bank that has failed is not entitled to claim in respect of that money against any other client bank account or client transaction account of the firm.
CASS 7A.3.12ARRP
3A client whose money was held, or which should have been held, in a designated client fund account with a bank that has failed is not entitled to claim in respect of that money against any other client bank account of the firm that is not part of the same designated fund or against any client transaction account of the firm.
CASS 7A.3.19RRP
A3firm must notify the FCA as soon as reasonably practical after it becomes aware of the failure of any bank, exchange, clearing house, intermediate broker, settlement agent, OTC counterparty or other entity with which it has placed, or whom it has allowed to hold, client money3:(1) [deleted]3(2) [deleted]3(3) whether it intends to make good any secondary pooling shortfall that has arisen or may arise; and3(4) the amount of that secondary pooling shortfall, or the expected amount
CASS 7.19.1GRP
(1) 1Under CASS 7.17.2R(2)2, a firm acts as trustee for all client money received or held by it for the benefit of the clients for whom that client money is held, according to their respective interests in it.(2) A firm that is also a clearing member of an authorised central counterparty may wish to segregate client money specifically for the benefit of a group of clients who have chosen to clear positions through a net margined omnibus client account maintained by the firm with
CASS 7.19.9RRP
(1) A firm wishing to establish a sub-pool must prepare a sub-pool disclosure document for each sub-pool.(2) The sub-pool disclosure document for each sub-pool must:(a) identify the sub-pool by name, as stated in its records under CASS 7.19.7 R, the net margined omnibus client account and the authorised central counterparty to which the sub-pool disclosure document relates;(b) contain a statement that the client consents to the firm receiving and holding the client'sclient money
CASS 7.19.11RRP
(1) Before receiving or holding client money for a client for a sub-pool, a firm must:(a) provide to the client a copy of the sub-pool disclosure document applicable to that sub-pool; and(b) obtain a signed copy of that sub-pool disclosure document from the client.(2) A firm must provide the beneficiary of a sub-pool with a copy of its signed sub-pool disclosure document applicable to that sub-pool upon the beneficiary's request.
CASS 7.19.13RRP
(1) A firm must not hold client money for a sub-pool in a client bank account or a client transaction account used for holding client money for any other sub-pool or the general pool.(2) A firm that establishes a sub-pool must ensure that the name of each client bank account and each client transaction account (other than the net margined omnibus client account) maintained for that sub-pool includes a unique identifying reference or descriptor that enables the account to be identified
CASS 7.19.16RRP
A client for whom a firm receives or holds client money for a sub-pool has no claim to or interest in client money received or held for the general pool or any other sub-pool unless:(1) that client is a beneficiary of that other sub-pool; or(2) the firm receives or holds client money for that client for other business which does not relate to any sub-pool (and thus the client is a beneficiary of the firm'sgeneral pool).
CASS 7.19.17RRP
A client for whom a firm receives or holds client money in more than one pool as described in CASS 7.19.16 R (1) and/or CASS 7.19.16 R (2) has an interest in a distribution from each such pool, and each interest is separate and distinct.
CASS 7.19.19GRP
A firm should keep in mind its obligations under CASS 7.19.11 R (1)(b) (before receiving or holding client money for a client in a sub-pool, a firm must obtain a signed copy of the sub-pool disclosure document from the client) when making a material change to a sub-pool. A firm is also reminded of the conditions under CASS 7.19.13 R (5)(b) (when a client of the firm who is a beneficiary of a sub-pool ceases to be a beneficiary of that sub-pool) if a material change proposed to
CASS 7.19.22RRP
A firm that wishes to establish a sub-pool of client money must notify the FCA in writing not less than two months before the date on which the firm intends to receive or hold client money for that sub-pool.
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 5.6.1RRP
(1) CASS 5.6 (the client money (insurance) distribution rules) applies to a firm that in holding client money is subject to CASS 5.3 (statutory trust) or CASS 5.4 (Non-statutory trust) when a primary pooling event or a secondary pooling event occurs.(2) In the event of there being any discrepancy between the terms of the trust as required by CASS 5.4.7 R (1)(c) and the provisions of CASS 5.6, the latter shall apply.
CASS 5.6.2GRP
(1) The client money (insurance) distribution rules have force and effect on any firm that holds client money in accordance with CASS 5.3 or CASS 5.4. Therefore, they may apply to a UK branch of a non-EEA firm. In this case, the UK branch of the firm may be treated as if the branch itself is a free-standing entity subject to the client money (insurance) distribution rules.(2) Firms that act in accordance with CASS 5.4 (Non-statutory trust) are reminded that the client money (insurance)
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 5.6.5RRP
A primary pooling event occurs:(1) on the failure of the firm; or(2) on the vesting of assets in a trustee in accordance with an 'assets requirement' imposed under 55P(1)(b) or (c) (as the case may be) of the Act; or(3) on the coming into force of a requirement for all client money held by the firm; or(4) when the firm notifies, or is in breach of its duty to notify, the FCA, in accordance with CASS 5.5.77 R1, that it is unable correctly to identify and allocate in its records
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 5.6.14RRP
A secondary pooling event occurs on the failure of a third party to which client money held by the firm has been transferred under CASS 5.5.34 R.
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 5.6.23GRP
The term 'which should have been held' is a reference to the failed bank's failure (and elsewhere, as appropriate, is a reference to the other failed third party's failure) to hold the client money at the time of the pooling event.
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 5.6.25RRP
A client whose money was held, or which should have been held, in a designated client bank account with a bank that has failed is not entitled to claim in respect of that money against any other client bank account or client transaction account of the firm.
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 7.15.1GRP
(1) This section sets out the requirements a firm must meet when keeping records and accounts of the client money it holds.(2) Where a firm establishes one or more sub-pools, the provisions of CASS 7.15 (Records, accounts and reconciliations) shall be read as applying separately to the firm'sgeneral pool and each sub-pool in line with CASS 7.19.3 R and CASS 7.19.4 R.
CASS 7.15.2RRP
A firm must keep such records and accounts as are necessary to enable it, at any time and without delay, to distinguish client money held for one client from client money held for any other client, and from its own money.[Note: article 2(1)(a) of the MiFID Delegated Directive2]
CASS 7.15.3RRP
A firm must maintain its records and accounts in a way that ensures their accuracy, and in particular their correspondence to the client money held for clients and that they may be used as an audit trail2.[Note: article 2(1)(b) of the MiFID Delegated Directive2]
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 7.15.6GRP
Unless required sooner under another rule in this chapter, in complying with CASS 7.15.5 R (1) a firm should ensure it is able to determine the total amount of client money it should be holding for each client within two business days of having taken a decision to do so or at the request of the FCA.
CASS 7.15.12RRP
An internal client money reconciliation requires a firm to carry out a reconciliation of its internal records and accounts of the amount of client money that the firm holds for each client with its internal records and accounts of the client money the firm should hold in client bank accounts or has placed in client transaction accounts.
CASS 7.15.20RRP
A firm must conduct, on a regular basis, reconciliations between its internal records and accounts and those of any third parties which hold client money.[Note: article 2(1)(c) of the MiFID Delegated Directive2]
CASS 7.15.21GRP
The purpose of an external client money reconciliation is to ensure the accuracy of a firm's internal records and accounts against those of any third parties by whom client money is held.
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 7.15.28RRP
A firm must ensure it includes the following items within its external client money reconciliation:(1) any client's approved collateral a firm holds which secures an individual negative client equity balance (see CASS 7.16.32 R); and(2) any of its own approved collateral a firm holds which is used to meet the total margin transaction requirement in CASS 7.16.33 R.
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 7.11.17RRP
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 7.11.19RRP
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 7.11.26GRP
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 7.11.27GRP
Money held as client money becomes due and payable to the firm or for the firm's own account, for example, because the firm acted as principal in the contract or the firm, acting as agent, has itself paid for securities in advance of receiving the purchase money from its client. The circumstances in which it is due and payable will depend on the contractual arrangement between the firm and the client.
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 7.11.32RRP
A firm must pay a retail client any interest earned on client money held for that client unless it has otherwise notified him in writing.
CASS 7.11.37RRP
Client money received or held by the firm and transferred to a clearing member who facilitates indirect clearing through a regulated clearing arrangement ceases to be client money for that firm and, if applicable, the clearing member, if the clearing member in accordance with the EMIR indirect clearing default management obligations or the MiFIR indirect clearing default management obligations (as applicable)7:(1) remits payment to another firm or to another clearing member; or7(2)
CASS 7.11.46RRP
Where a firm transfers client money belonging to its clients under either or both of CASS 7.11.42 R and CASS 7.11.44 R it must ensure that those clients are notified no later than seven days after the transfer taking place:(1) whether or not the sums will be held by the person to whom they have been transferred in accordance with the client money rules and if not how the sums being transferred will be held by that person;(2) the extent to which the sums transferred will be protected
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 11.7.1GRP
A CASS debt management firm owes a duty of care as a trustee to its clients in relation to client money and has to exercise that duty of care in deciding where to hold client money.
CASS 11.7.2RRP
Before a CASS large debt management firm opens a client bank account and as often as is appropriate on a continuing basis (such frequency being no less than once in each financial year) it must take reasonable steps to establish that it is appropriate for the firm to hold client money at the approved bank concerned.
CASS 11.7.3RRP
A CASS large debt management firm must consider the risks associated with holding all client money with one approved bank and should consider whether it would be appropriate to hold client money in client bank accounts at a number of different approved banks.
CASS 11.7.4GRP
In complying with CASS 11.7.3 R a CASS large debt management firm should consider as appropriate, together with any other relevant matters:(1) the amount of client money held by the firm;(2) the amount of client money the firm anticipates holding at the approved bank; and(3) the credit worthiness of the approved bank.
CASS 11.7.5GRP
A CASS small debt management firm can demonstrate compliance with CASS 11.7.1 G by checking that the person it proposes to hold client money with is an approved bank and that nothing has come to the firm's attention to cause it to believe that such person is not an appropriate place at which to hold client money.
CASS 11.7.6RRP
A CASS large debt management firm must make a record of the grounds upon which it satisfies itself as to the appropriateness of its selection of an approved bank. The firm must make the record on the date it makes the selection and must keep it from the date of such selection until five years after the firm ceases to use the approved bank to hold client money.
CASS 7.14.1GRP
This section sets out the requirements a firm must comply with when it allows another person to hold client money, other than under CASS 7.13.3 R, without discharging its fiduciary duty to that client. Such circumstances arise when, for example, a firm passes client money to a clearing house in the form of margin for the firm's obligations to the clearing house that are referable to transactions undertaken by the firm for the relevant clients. They may also arise when a firm passes
CASS 7.14.2RRP
A firm may allow another person, such as an exchange, a clearing house or an intermediate broker, to hold client money, but only if:(1) the firm allows that person to hold the client money:(a) for the purpose of one or more transactions for a client through or with that person; or(b) to meet a client's obligation to provide collateral for a transaction (for example, an initial margin requirement for a contingent liability investment); and(2) in the case of a retail client, that
CASS 7.14.3GRP
Client money that a firm allows another person to hold under CASS 7.14.2 R:(1) should only be held for transactions which are likely to occur (and for which the other person needs to receive client money) or have recently settled (and such that the other person has received client money); and (2) should be recorded in client transaction accounts by that other person.
CASS 7.14.4GRP
Apart from client money held by a firm in an individual client account or an omnibus client account at an authorised central counterparty, a firm should not hold excess client money in its client transaction accounts.
CASS 7.14.5GRP
(1) Money arising from, or in connection with, the holding of a safe custody assets by a firm which is due to clients should, unless treated otherwise under the client money rules, be treated as client money by the firm. (2) Firms are reminded of the guidance in CASS 6.1.2 G.
CASS 7.14.8GRP
If the third party holding the safe custody assets under CASS 7.14.6 R is a bank with which the firm is permitted to deposit client money under CASS 7.13.3 R, then the client bank account referred to in CASS 7.14.6 R may be an account with that bank.
CASS 6.3.1RRP
(1) 1A firm may deposit safe custody assets2 held by it on behalf of its clients into an account or accounts opened with a third party, but only if it exercises all due skill, care and diligence in the selection, appointment and periodic review of the third party and of the arrangements for the holding and safekeeping of those safe custody assets.222(1A) [deleted]66(2) [deleted]66(3) When a firm makes the selection, appointment and conducts the periodic review referred to 2under
CASS 6.3.2GRP
In discharging its obligations under CASS 6.3.1 R,6 a firm should also consider, as appropriate,6 together with any other relevant matters:6(1) the third party's performance of its services to the firm;6(2) the arrangements that the third party has in place for holding and safeguarding the safe custody asset;22(2A) market practices related to the holding of the safe custody asset that could adversely affect clients’ rights.8(3) current industry standard reports, for example "Assurance
CASS 6.3.2ARRP
(1) 6A firm must make a record of the grounds upon which it satisfies itself as to the appropriateness of its selection and appointment of a third party under CASS 6.3.1 R. The firm must make the record on the date it makes the selection or appointment and must keep it from that date until five years after the firm ceases to use the third party to hold safe custody assets belonging to clients.(2) A firm must make a record of each periodic review of its selection and appointment
CASS 6.3.4RRP
(1) Subject to (2), a6firm must only deposit safe custody assets2 with a third party in a jurisdiction which specifically regulates and supervises the safekeeping of safe custody assets2 for the account of another person8 with a third party who is subject to such regulation.622(2) A firm must not deposit safe custody assets2 held on behalf of a client with a third party in a third country8 which does not regulate the holding and safekeeping of safe custody assets2 for the
CASS 6.3.4BGRP
6A firm should consider carefully the terms of any agreement entered into with a third party under CASS 6.3.4A R. The following terms are examples of the issues that should be addressed in these agreements (where relevant):(1) that the title of the account in the third party's books and records indicates that any safe custody asset credited to it does not belong to the firm;(2) that the third party will hold or record a safe custody asset belonging to the firm'sclient separately
CASS 6.3.6ARRP
(1) 8A firm must not grant any security interest, lien or right of set-off to another person over clients’safe custody assets that enable that other person to dispose of the safe custody assets in order to recover debts unless condition (a) or (b) is satisfied:(a) those debts relate to:(i) one or more of the firm’sclients; or(ii) the provision of services by that other person to one or more of the firm’sclients; or(b) to the extent those debts relate to anything else then:(i)
CASS 6.3.6CGRP
(1) 8Under CASS 6.3.6AR(1)(b)(i) a security interest, lien or right of set-off may be regarded as being required by applicable law in a third country for example where:(a) because of applicable law it is mandatory for such a security interest, lien or right of set-off to be given in order for the safe custody assets to be held in that third country; or(b) (i) in the context of the service being provided for the firm’sclient the applicable law of that third country requires the
CASS 9.5.1GRP
(1) Firms to which COBS 16.4 applies are reminded that, under COBS 16.4, they are required to send to each of their clients at least once a year a statement in a durable medium of those designated investments and/or client money they hold for that client. A firm which manages investments may provide this statement in its periodic statement, as required under COBS 16.3.2(2) COBS 16.4 (Statements of client designated investments or client money) applies, in accordance with COBS
CASS 9.5.2GRP
Firms are reminded that the requirements in COBS 16.4, article 63 of the MiFID Org Regulation and COBS 16A.42 only set out the minimum frequency at which firms must report to their clients on their holdings of designated investments and/or client money. Firms may choose to report to their clients more frequently.
CASS 9.5.3GRP
Subject to CASS 9.5.5AR and2CASS 9.5.6 R, CASS 9.5.4R, CASS 9.5.4BR2 and CASS 9.5.5 R require firms to comply with a client's request for information on the custody assets and/or client money the firm holds for a client under CASS 6 and/or CASS 7, and such request may be made by a client at any time.
CASS 9.5.4RRP
When a firm to which COBS 16.4 applies2 receives a request, made by a client, or on a client's behalf, for a statement of the custody assets and/or client money that the firm holds for that client, the firm must provide the client with the statement requested in a durable medium.
CASS 9.5.4ARRP
(1) Firms to which COBS 16A applies are reminded of the requirements under article 63 of the MiFID Org Regulation (which are directly applicable to some firms and which are also applied to firms in other circumstances under COBS 16A.1.2R) in relation to quarterly statements when the firm is holding a client’sfinancial instruments or funds (see COBS 16A.4.1EU and COBS 16A.5.1EU).2(2) COBS 16A (Reporting information to clients (MiFID provisions) applies to a firm in relation to
CASS 9.5.4BRRP
2When a firm to which COBS 16A applies receives a request, made by a client, or on a client’s behalf, for a statement of the custody assets that the firm holds for that client, it must provide the client with a statement in a durable medium in relation to any custody assets that are not financial instruments.
CASS 9.5.8GRP
Consistent with the fair, clear and not misleading rule, a firm should ensure that, in any statements of custody assets and/or client money it provides to its clients, it is clear from the statement which assets and/or monies the firm reports as holding for the client are, or are not, protected under CASS 6 and/or CASS 7 (e.g. if the statement also includes information regarding assets and/or monies which are held by the firm for that client which are not subject to the custody
CASS 11.11.1RRP
A CASS debt management firm must keep such records and accounts as are necessary to enable it, at any time and without delay, to distinguish client money held for one client from client money held for any other client, and from its own money.
CASS 11.11.2GRP
In accordance with CASS 11.11.1 R, a CASS debt management firm must maintain internal records and accounts of the client money it holds (for example, a cash book). These internal records are separate to any external records it has obtained from approved banks with whom it has deposited client money (for example, bank statements).
CASS 11.11.3RRP
A CASS debt management firm must maintain its records and accounts in a way that ensures their accuracy and, in particular, their correspondence to the client money held for individual clients.
CASS 11.11.8RRP
A CASS small debt management firm must undertake periodic checks of its internal accounts and records to ensure that the amount of money it holds in its client bank accounts is equal to the amount of client money that should be segregated under CASS 11.9.
CASS 11.11.10GRP
The checks that a CASS small debt management firm is required to undertake under CASS 11.11.8 R include checking that its internal records and accounts accurately record the balances of client money held in respect of individual clients, and that the aggregate of those individual client money balances are equal to the total client money segregated in its client bank accounts. In undertaking the comparison between the internal records of balances of client money and the client
CASS 11.11.12RRP
Where the check of its internal records and accounts that a CASS small debt management firm is required to undertake under CASS 11.11.8 R reveals a difference between the amount of money it holds in its client bank accounts and the amount of client money that should be held and segregated under CASS 11.9, a CASS small debt management firm must:(1) ensure that any shortfall in the amount held in its client bank accounts as compared to the amount that should be held there is made
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 11.11.24GRP
The purpose of the reconciliation process required by CASS 11.11.25 R is to ensure the accuracy of a firm's internal accounts and records against those of any third parties by whom client money is held.
CASS 11.11.26RRP
A CASS large debt management firm external client money reconciliation requires a CASS large debt management firm to conduct a reconciliation between its internal accounts and records and those of any approved banks by whom client money is held.
CASS 11.2.1RRP
(1) A CASS debt management firm must, once every year and by the time it is required to make a notification in accordance with CASS 11.2.4 R, determine whether it is a CASS large debt management firm or a CASS small debt management firm according to the amount of client money which it held during the previous year or, if it did not hold client money during the previous year, according to the amount of client money it projects to hold in the following year, in each case using the
CASS 11.2.2RRP
For the purpose of calculating the value of the total amounts of client money that it holds on any given day during a calendar year (in complying with CASS 11.2.1 R) a CASS debt management firm must base its calculation on accurate internal records of client money holdings. A CASS large debt management firm must do this using the internal reconciliations performed during the previous year that are prescribed in CASS 11.11.13 R. A CASS small debt management firm must use the records
CASS 11.2.3RRP
CASS debt management firm typesCASS debt management firm typeHighest total amount of client money held during the CASS debt management firm's last calendar year or as the case may be that it projects that it will hold during the current calendar yearCASS large debt management firmAn amount equal to or greater than £1 millionCASS small debt management firmLess than £1 million
CASS 11.2.4RRP
Once every calendar year, a CASS debt management firm must notify the FCA, in writing, of the information in (1), (2) or (3), as applicable, and the information in (4), in each case no later than the day specified in (1) to (4):(1) if it held client money in the previous calendar year, the highest total amount of client money held during the previous calendar year, notification of which must be made no later than the fifteenth business day of January; or (2) if it did not hold
CASS 11.2.6GRP
CASS 11.2.7 R provides a CASS debt management firm with the ability to opt in to a higher category of 'CASS debt management firm type'. This may be useful for a CASS debt management firm whose holding of client money is near the upper categorisation limit for a CASS small debt management firm.
CASS 11.2.8RRP
A firm's 'CASS debt management firm type' and any change to it takes effect:(1) if the firm notifies the FCA in accordance with CASS 11.2.4 R (1) or CASS 11.2.4 R (2), on 1 February following the notification; or(2) if the firm notifies the FCA in accordance with CASS 11.2.4 R (3), on the day it begins to hold client money; or(3) if the firm makes an election under CASS 11.2.7 R and provided the conditions in CASS 11.2.7 R (2) are satisfied, on the day the notification made under
CASS 6.1.1AGRP
2The regulated activity of safeguarding and administering investments covers both the safeguarding and administration of assets (without arranging) andarranging safeguarding and administration of assets,5 when those assets are either safe custody investments or custody assets. A safe custody investment is, in summary, a designated investment which a firm receives or holds on behalf of a client. Custody assets include designated investments, and any other assets that the firm holds
CASS 6.1.2GRP
Firms are reminded that dividends (actual or payments in lieu), stock lending fees and other payments received for the benefit of a client, and which are due to the clients,2 should be held in accordance with the client money chapter where appropriate.2
CASS 6.1.8CGRP
9When a firm notifies a client under CASS 6.1.8AR (3)(a) of when the termination of a TTCA14 is to take effect, it should take into account:(1) any relevant terms relating to such a termination that have been agreed with the client; and(2) the period of time it reasonably requires to return the safe custody asset to the client or to update the registration under (Holding of client assets) CASS 6.2and update its records under CASS 6.6 (Records, accounts and reconciliations).
CASS 6.1.8EGRP
(1) 9Following the termination of a TTCA14 , where a firm does not immediately return the safe custody assets to the client the firm should consider whether the custody rules apply in respect of the safe custody assets pursuant to CASS 6.1.1R14.(2) Where the custody rules apply to a firm for safe custody assets in these circumstances then the firm is required to comply with those rules and should, for example, update the registration under CASS 6.2(Holding of client assets), update
CASS 6.1.12RRP
(1) Subject to (2) and CASS 6.1.12B R and with the written agreement of the relevant client, a9firm need not treat this chapter as applying in respect of a delivery versus payment transaction through a commercial settlement system if:9929(a) in respect of a client's purchase, the firm intends for the asset in question to be due to the client within one business day following the client's fulfilment of its payment obligation to the firm;9 or9(b) in respect of a client's sale, the
CASS 6.1.12CGRP
9Where a firm does not meet the requirements in CASS 6.1.12 R or CASS 6.1.12B R for use of the exemption in CASS 6.1.12 R, the firm is subject to the custody rules in respect of any safe custody asset it holds in connection with the delivery versus payment transaction in question.
CASS 6.1.16FRRP
2When a trustee firm or depositary acts as a custodian for a trust or collective investment scheme, (except for a firmacting as trustee or depositary of an AIF and a firmacting as trustee or depositary of a UCITS12), and: 7(1) the trust or scheme is established by written instrument; and (2) the trustee firm or depositary has taken reasonable steps to determine that the relevant law and provisions of the trust instrument or scheme constitution will provide protections at least
CASS 6.1.16IARRP
(1) 7Subject to (2), when a firm is acting as trustee or depositary of an AIF the firm need comply only with the custody rules in the table below:ReferenceRuleCASS 6.1.1 R, CASS 6.1.9 G, CASS 6.1.9A G and CASS 6.1.16IB GApplicationCASS 6.1.22 G to CASS 6.1.24 GGeneral purposeCASS 6.2.3 R and CASS 6.2.3B G9 to CASS 6.2.6 G9Registration and recording of legal title9CASS 6.2.7 RHoldingCASS 6.6.2 R, CASS 6.6.4 R, CASS 6.6.6 R, CASS 6.6.7 R, CASS 6.6.57R (2) and CASS 6.6.58 G99Records,
CASS 6.1.16IDRRP
12When a firm is acting as trustee or depositary of a UCITS, the firm need comply only with the custody rules in the table below:ReferenceRuleCASS 6.1.1R, CASS 6.1.1BR(3), CASS 6.1.9G, CASS 6.1.16IEGApplicationCASS 6.1.22G to CASS 6.1.24GGeneral purposeCASS 6.2.3R, CASS 6.2.3AR, CASS 6.2.3BG, CASS 6.2.7RHolding of client assets13CASS 6.6.2R, CASS 6.6.4R, CASS 6.6.7R, CASS 6.6.41AG, CASS 6.6.57R(2A), CASS 6.6.58GRecords, accounts and reconciliations
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.1.1ARRP
2The client money distribution and transfer rules4 do not apply to any client money held by a trustee firm under CASS 7.10.34R3 to CASS 7.10.40G3.
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
CASS 7A.1.2GRP
The client money distribution and transfer rules set out the required treatment of client money on the occurrence of a pooling event so that where:4(1) for example, a firmfails (but also in other situations where a primary pooling event occurs), the rules in CASS 7A.2 (Primary pooling events) facilitate the return or transfer of client money; and4(2) a person at which the firm holds client moneyfails, the rules in CASS 7A.3 (Secondary pooling events) allocate any loss of client
CASS 9.4.1GRP
(1) Firms to which COBS 6.1 applies are reminded that, under COBS 6.1.7R, a firm that holds clientdesignated investments or client money must provide its clients with specific information about how the firm holds those clientdesignated investments and client money and how certain arrangements might give rise to specific consequences or risks for those clientdesignated investments and client money.2(2) COBS 6.1 (Information about the firm and compensation information (non-MiFID
CASS 9.4.2RRP
1A firm to which COBS 6.1 applies2 that holds custody assets or client money must, in relation to its business for which COBS 6.1 applies2:(1) provide the information in COBS 6.1.7 R for any custody assets the firm may hold for a client, including any custody assets which are not designated investments; and(2) provide the information in COBS 6.1.7 R and in (1) to each of its clients.
CASS 9.4.2ARRP
(1) 2Firms to which COBS 6.1ZA applies are reminded of the requirements under article 49 of the MiFID Org Regulation (which are directly applicable to some firms and which are also applied to firms in other circumstances under COBS 6.1ZA.3R3) to provide certain information to a client when the firm is holding the client’sfinancial instruments or funds (see COBS 6.1ZA.9EU3) and the requirement under COBS 6.1ZA.10AR when a firm doing insurance distribution activities is holding
CASS 9.4.2BRRP
2A firm to which COBS 6.1ZA applies that holds custody assets or client money must, in relation to its business for which COBS 6.1ZA applies:(1) provide the information referred to in paragraphs 2 to 7 of article 49 of the MiFID Org Regulation for any custody asset that the firm may hold for a client, including:(a) any custody asset which is a designated investment but not a financial instrument; and(b) any custody asset which is neither a designated investment nor a financial
CASS 9.4.3GRP
1A firm should provide the information required in CASS 9.4.2 R or CASS 9.4.2BR (as applicable)2 to any client for whom it holds custody assets or client money, including a retail client, a professional client and an eligible counterparty.