CASS 14.2 Temporary permission CASS firm classification

1. (1)

   1Subject to paragraphs (2) to (5), this section applies only to a TP firm to which either or both of CASS 6 and CASS 7 apply as a result of GEN 2.2.26R.

2. (2)

   In relation to a TP firm to which both CASS 5 and CASS 7 (Client money rules) apply as a result of GEN 2.2.26R, this section does not apply in relation to client money that the TP firm holds in accordance with CASS 5 as a result of GEN 2.2.26R.

3. (3)

   The rules in this section apply to a TP firm even if at the date of the determination or, as the case may be, the notification required under them, either or both of CASS 6 and CASS 7 do not apply to it, provided that:

   1. (a)

      either or both of those chapters applied to it as a result of GEN 2.2.26R during part or all of the previous calendar year; or

   2. (b)

      it projects that either or both will apply to it as a result of GEN 2.2.26R in the current calendar year.

4. (4)

   The rules in this section do not apply to a TP firm to which, as a result of GEN 2.2.26R, only CASS 6 applies, applied or is projected to apply, merely because it is, was, or is projected to be a firm which arranges safeguarding and administration of assets.

5. (5)

   The rules in this section do not apply to a TP firm that has notified the FCA of an election made under CASS 14.3.6R.

1. (1)

   1A TP firm must once every year, and by the time it is required to make a notification in accordance with CASS 14.2.9R, determine whether it is a CASS large TP firm, CASS medium TP firm or a CASS small TP firm according to the amount of client money or safe custody assets which it holds, using the limits set out in the table in CASS 14.2.8R.

2. (2)

   For the purpose of determining its ‘CASS firm type’ in accordance with CASS 14.2.8R, a TP firm must:

   1. (a)

      if it currently holds client money or safe custody assets, calculate the higher of the highest total amount of client money and the highest total value of safe custody assets held during the previous calendar year ending on 31 December, and use that figure to determine its ‘CASS firm type’;

   2. (b)

      if it did not hold client money or safe custody assets in the previous calendar year but projects that it will do so in the current calendar year, calculate the higher of the highest total amount of client money and the highest total value of safe custody assets that it projects that it will hold during that year, and use that figure to determine its ‘CASS firm type’; but

   3. (c)

      in either case, exclude from its calculation any client money held in accordance with CASS 5.

1For the purpose of calculating the value of the total amounts of client money and safe custody assets that it holds on any given day during a calendar year a TP firm must:

1. (1)

   in complying with CASS 14.2.4R(2)(a), base its calculation on the reconciliation performed in accordance with CASS 7.15.20R during the previous year;

2. (2)

   in relation to client money or safe custody assets denominated in a currency other than sterling, translate the value of that money or those safe custody assets into sterling at the previous day’s closing spot exchange rate; and

3. (3)

   in relation to safe custody assets only, calculate their total value using the previous day’s closing mark to market valuation, or if in relation to a particular safe custody asset none is available, the most recent available valuation.

1. (1)

   1Notwithstanding CASS 14.2.4R, provided that the conditions in (2) are satisfied a TP firm may elect to be treated:

   1. (a)

      as a CASS medium TP firm, in the case of a TP firm that is classed by the application of the limits in CASS 14.2.8R as a CASS small TP firm; and

   2. (b)

      as a CASS large TP firm, in the case of a TP firm that is classed by the application of the limits in CASS 14.2.8R as a CASS medium TP firm.

2. (2)

   The conditions to which (1) refers are that in either case:

   1. (a)

      the election is notified to the FCA by email;

   2. (b)

      the notification in accordance with (a) is made at least one week before the election is intended to take effect; and

   3. (c)

      the FCA has not objected.

1Once every calendar year a TP firm must notify to the FCA by email the information specified in (1), (2) or (3) as applicable, and the information specified in (4), in each case no later than the day specified in (1) to (4):

1. (1)

   if it held client money or safe custody assets in the previous calendar year, the highest total amount of client money and the highest total value of safe custody assets held during the previous calendar year, notification of which must be made no later than the fifteenth business day of January;

2. (2)

   if it did not hold client money or safe custody assets in the previous calendar year but at any point up to the fifteenth business day of January the TP firm projects that it will do so in the current calendar year, the highest total amount of client money and the highest total value of safe custody assets that the TP firm projects that it will hold during the current calendar year, notification of which must be made no later than the fifteenth business day of January; or

3. (3)

   in any other case, the highest total amount of client money and the highest total value of safe custody assets that the TP firm projects that it will hold during the remainder of the current calendar year, notification of which must be made no later than the business day before the firm begins to hold client money or safe custody assets; and

4. (4)

   in every case, of its ‘CASS firm type’ classification, notification of which must be made at the same time the TP firm makes the notification under (1), (2) or (3).

1For the purpose of the annual notification to which CASS 14.2.9R refers, a TP firm must apply the calculation rule in CASS 14.2.6R.

1For the purpose of CASS 14.2.9R(1), the FCA will treat that obligation as satisfied if a TP firm submitted a TPCAR for each period within the previous calendar year in compliance with the rules in CASS 14.3.

1A TP firm's ‘CASS firm type’ and any change to it takes effect if the TP firm:

1. (1)

   notifies the FCA in accordance with CASS 14.2.9R(1) or CASS 14.2.9R(2), on 1 February following the notification; or

2. (2)

   notifies the FCA in accordance with CASS 14.2.9R(3), on the day it begins to hold client money or safe custody assets; or

3. (3)

   makes an election under CASS 14.2.7R(1), and provided the conditions in CASS 14.2.7R(2) are satisfied, on the day the notification made under CASS 14.2.7R(2)(a) states that the election is intended to take effect.