FCA Consults on Changes To Client Assets Sourcebook
Friday, August 4, 2017

On August 1, the UK Financial Conduct Authority (FCA) published a consultation paper (CP), outlining proposals to amend its Client Assets Sourcebook (CASS). CASS applies to certain regulated firms that hold client money in relation to investment business.

 The FCA stated in the CP that some investment firms are experiencing difficulty depositing client money at banks in accordance with CASS requirements. The proposals in the CP are intended to address the potential harm to consumers resulting from this, including client money being returned to clients against their wishes or being deposited with banks that do not meet due diligence requirements.

The FCA is seeking feedback on the following proposed changes to CASS:

  • permitting a firm to deposit an appropriate proportion of client money in an unbreakable deposit of a maximum of 90 days, as opposed to the current maximum of 30 days;
  • requiring a firm to comply with certain conditions, including producing related written policies, when it deposits client money in an unbreakable deposit of 31–90 days; and
  • requiring CASS medium and large firms to report client money in an unbreakable deposit of 31–90 days in their client money and asset return (CMAR) (monthly reporting of held client assets).

The CP consultation closes November 1.

The CP is available here.

 

NLR Logo

We collaborate with the world's leading lawyers to deliver news tailored for you. Sign Up to receive our free e-Newsbulletins

 

Sign Up for e-NewsBulletins