Example 2 on a cash basis (for formula see paragraph 2.5.8):
Day
|
Client money resource
|
Client money requirement found by CASS 5.5.67R
: ((1) + (2) + (3)) - ((4) + (5))
|
Client bank a/c balance
|
Office a/c balance
|
1*
|
£100
|
((£100) + (0) + (0)) - ((0) + (0)) = £100
|
£100 inc £10 commission
|
£0
|
25**
|
£10
|
((£100) +(0) + (0)) - ((£100) + (0)) = £0
|
£10 to transfer to office account by cob
|
£0
|
* As the commission is not due to the firm it is client money and is therefore included in the client money requirement (i.e. £10 commission is not deducted as in example 1 above).
** The commission becomes due on day 25. At this point it is no longer client money and cannot be included in the client money requirement. It is therefore deducted from the client money requirement, as is the premium which has been paid to the insurance company. As such, the client money requirement is £0 while the client money resource shows a £10 surplus, representing the commission due to the firm, which must be removed by close of business in line with CASS 5.5.63R(2)(b).