CASS 1.2 General application: who? what?

The rules in CASS 1.2 set out the maximum scope of this sourcebook. The application of CASS is modified for certain activities by CASS 1.4. Also particular chapters or sections of CASS may have provisions which limit their application.

1. (1)

   The approach in CASS is to ensure that the rules in a chapter are applied to firms in respect of particular regulated activities or unregulated activities.

2. (2)

   The scope of the regulated activities to which CASS applies is determined by the description of the activity as it is set out in the Regulated Activities Order. Accordingly, a firm will not generally be subject to CASS in relation to any aspect of its business activities which fall within an exclusion found in the Regulated Activities Order. The definition of designated investment business includes, however, activities within the exclusion from dealing in investments as principal in article 15 of the Regulated Activities Order (Absence of holding out etc).

3. (3)

   The non-directive custody chapter and the non-directive client money chapter apply in relation to regulated activities, conducted by firms, which fall within the definition of designated investment business other than MiFID business.2

4. (3A)

   The collateral rules apply in relation to regulated activities, conducted by firms, which fall within the definition of designated investment business (including MiFID business).2

5. (4)

   The insurance client money chapter2 applies in relation to regulated activities, conducted by firms, which fall within the definition of insurance mediation activities.1

   2
6. (5)

   The MiFID custody chapter and the MiFID client money chapter apply in relation to regulated activities, conducted by firms, which fall within the definition of:2

   1. (a)

      MiFID business; and2

   2. (b)

      designated investment business other than MiFID business, where the firm has, in accordance with those rules, opted to comply with the provisions of those rules with respect of this business.2

7. (6)

   The mandate rules apply in relation to regulated activities, conducted by firms, which fall within the definition of designated investment business (including MiFID business) and insurance mediation activity, except where it relates to a reinsurance contract.2

1. (1)

   CASS applies directly in respect of activities conducted with or for all categories of clients.2

   2
2. (2)

   In CASS, except in the insurance client money chapter, MiFID custody chapter and MiFID client money chapter,2 the term customer refers to retail clients and professional clients, but not eligible counterparties.2 Where relevant, each of the provisions of CASS makes clear whether it applies to activities carried on with or for retail clients or professional clients,2 or both.

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3. (3)

   The insurance client money chapter2 does not generally distinguish between different categories of client. However, the term retail customer is used for those whom additional obligations are owed, rather than the term retail client.2 This is to be consistent with the client categories used in relation to the obligations in ICOB in relation to insurance mediation activities.1

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4. (4)

   Each provision in the MiFID custody chapter and the MiFID client money chapter makes it clear whether it applies to activities carried on orfor retail clients, professional clients or both. There is no further modification of the rules in these chapters in relation to activities carried on for eligible counterparties. Such clients are treated in the same way as other professional clients for the purposes of these rules.2

2The purpose of the rules regarding the segregation of investments and money held under different regimes is to reduce the risk of confusion between assets held under different regimes either on an on-going basis or on the failure of a firm or a third party holding those assets.

2A firm may opt to hold under a single chapter designated investments that would otherwise be held under different chapters (see CASS 6.1.7 G). A firm may also opt to hold under a single chapter money that would otherwise be held under different chapters (see CASS 4.1.1A R,CASS 5.1.1 R (3) and CASS 7.1.3R (1)).