Reset to Today

To access the FCA Handbook Archive choose a date between 1 January 2001 and 31 December 2004.

Content Options:

Add to favourites

View Options:

More Resources:

External link Handbook Publications

Alternative versions

  1. Point in time
    2006-06-06

CASS 2.4 Custodian agreement1

Application1

CASS 2.4.1R

CASS 2.4 applies in accordance with CASS 2.11

CASS 2.4.2R

Before a firm holds a safe custody investment for or on behalf of a client with a custodian, it must agree in writing appropriate terms and conditions with the custodian, including, where applicable:

  1. (1)

    that the title of the account indicates that any safe custody investment credited to it does not belong to the firm or to an affiliated company that is not being treated as an arm's length client in accordance with CASS 2.1.9 R(1)(b) (Application));

  2. (2)

    that the custodian will hold or record a safe custody investment belonging to the firm'sclient (or where the firm is a trustee firm, the trustees), separately from any designated investment belonging to the firm or to the custodian;

  3. (3)

    that the custodian will deliver to the firm a statement as at a date or dates specified by the firm which details the description and amounts of all the safe custody investments credited to the account;

  4. (4)

    that the custodian will not claim any lien, right of retention or sale over any safe custody investment standing to the credit of any account set up in accordance with (1) except:

    1. (a)

      where the firm has notified the custodian in writing that the client has provided written consent; or

    2. (b)

      in respect of any charges relating to the administration or safekeeping of the safe custody investment;

  5. (5)

    the arrangements for registration or recording of the safe custody investment if this will not be registered in the client's name;

  6. (6)

    that the custodian is not to permit withdrawal of any safe custody investment from the account except for delivery to the firm or on the firm's instructions;

  7. (7)

    the procedures and authorities for the passing of instructions to or by the firm;

  8. (8)

    the claiming and receiving of dividends, interest payments and other entitlements accruing to the client; and

  9. (9)

    the extent of the custodian's liability in the event of the loss of a safe custody investment caused by the fraud, wilful default or negligence of the custodian, or an agent appointed by him.

CASS 2.4.3G

Firms should seek to ensure that custodians deliver the statement referred to in CASS 2.4.2 R(3) to the firm within 20 business days of the date of the statement.

CASS 2.4.4G

Firms need not include in the custodian agreement, any of the provisions set out in CASS 2.4.2 R if, for example, the firm or custodian is unable to comply with the provision on account of legal requirements or custodial practice imposed on or by a securities depository or clearance system.