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CASS 11.4 Definition of client money and the discharge of fiduciary duty

CASS 11.4.1GRP

CASS 11 provides important safeguards for the protection of client money held by CASS debt management firms that sit alongside the fiduciary duty owed by firms in relation to client money. CASS 11.4.2 R to CASS 11.4.4 G provide guidance and rules for when money ceases to be client money for the purposes of both those rules and of the fiduciary duty which CASS debt management firms owe to clients in relation to client money.

CASS 11.4.2RRP

Money ceases to be client money if:

  1. (1)

    it is paid to the client, or a duly authorised representative of the client; or

  2. (2)

    it is:

    1. (a)

      paid to a third party on the instruction of the client, or with the specific consent of the client; or

    2. (b)

      paid to a third party further to an obligation on the firm under any applicable law; or

  3. (3)

    it is paid into an account of the client (not being an account which is also in the name of the firm) on the instruction, or with the specific consent, of the client;

  4. (4)

    it is due and payable to the firm for its own account;

  5. (5)

    it is paid to the firm as an excess in the client bank account (see CASS 11.11.12 R (2) and CASS 11.11.23 R (3)).

CASS 11.4.3RRP

When a CASS debt management firm draws a cheque or other payable order to discharge its fiduciary duty to the client, it must continue to treat the sum concerned as client money until the cheque or order is presented and paid.

CASS 11.4.4GRP

Money is not client money when it is properly due and payable to the firm for its own account. The circumstances in which money may become due and payable to the firm could include when fees have become due and payable from the client to the firm under the agreement between the client and the firm.