CASS 8.3 Records and internal controls
A firm that has mandates must establish and maintain adequate records and internal controls in respect of its use of the mandates.
The records and internal controls required by CASS 8.3.1 R must include:
- (1)
an up-to-date list of each mandate that the firm has obtained, including a record of any conditions placed by the client or the firm's management on the use of the mandate;
- (2)
a record of each transaction entered into under each mandate that the firm has;
- (3)
internal controls to ensure that each transaction entered into under each mandate that the firm has is in accordance with any conditions placed by the client or the firm's management on the use of the mandate;
- (4)
the details of the procedures and internal controls around the giving of instructions under the mandates that the firm has (such instructions being those referred to in CASS 8.2.1 R (4)); and
- (5)
where the firm holds a passbook or similar documents belonging to the client, internal controls for the safeguarding (including against loss, unauthorised destruction, theft, fraud or misuse) of any passbook or similar document belonging to the client held by the firm.
When keeping its list of mandates under up to date:
- (1)
a firm should create a new entry in the list each time the firm obtains a new mandate;
- (2)
if, for an existing entry on its list, a firm obtains the same information meeting the conditions in again (eg in a written confirmation following a paperless direct debit), the additional mandate is not a new mandate and the firm should not create another entry on the list; but
- (3)
the firm should, for every entry on its list, identify each of the locations in which it has retained the information that meets the conditions in (eg a client's debit card details retained in a telephone recording and also the firm's written log of the call, or two separate documents containing the same information).
A firm should distinguish between conditions placed by a client on the firm's use of a mandate, and criteria to which transactions effected by a firm with or for a client may be subject.
- (1)
The requirements in CASS 8.3.2 R (1) and CASS 8.3.2 R (3) apply only in respect of conditions placed around the firm's use of a mandate itself or around the instructions described in CASS 8.2.1 R (4). Examples of these include conditions under which a mandate may only be used by the firm in connection with transactions up to a certain value, or under which instructions under a mandate may only be given by certain personnel within the firm.
- (2)
The requirements in CASS 8.3.2 R (1) and CASS 8.3.2 R (3) do not apply in respect of criteria which relate to the nature and circumstances of transactions effected by a firm with or for a client. Examples of those criteria include investment restrictions or exposure limits for a managed portfolio, and required or preferred execution prices or execution venues.