You are viewing CASS 16.5 Backing asset statutory trust as it appeared on 25/10/2027. The current version of CASS 16.5 Backing asset statutory trust was last updated on 25/10/2027.

CASS 16.5 Backing asset statutory trust

25/10/2027G
  1. (1) Section 137B(1) of the Act, as applied by article 98 of the Regulated Activities Order, provides that rules may make provisions which result in a firm holding a sum or asset on trust.
  2. (2) This section creates a fiduciary relationship between a firm and the holders of a qualifying stablecoin.
25/10/2027R

Separately, in relation to each qualifying stablecoin product, a firm holds as trustee money and assets which comprise the backing asset pool on the terms set out in CASS 16.5.4R. 

25/10/2027G

For the purposes of CASS 16.5.2R, money or assets include (but are not limited to): 

  1. (1) money held in a backing funds account;
  2. (2) assets held in a backing assets account; and
  3. (3) rights in or under and any proceeds of any asset which a firm may purchase or instruct another to purchase, or investment which a firm may make or instruct another to make, with any money or assets owned by the firm or which it holds as trustee under CASS 16.5.2R, including but not limited to core backing assets, expanded backing assets and any right in or under or any asset or money held as a result of entering into a repurchase transaction in relation to any of those assets.
25/10/2027R

Separately, for each trust created under CASS 16.5.2R which corresponds to a qualifying stablecoin product, a firm holds the money and assets specified in CASS 16.5.2R on the following terms:

  1. (1) for the purposes of meeting its obligations under, and on the terms of, the rules in CASS 16;
  2. (2) for the holders of that qualifying stablecoin product, with the value of each holder’s proprietary claim being the reference value of the sum total of qualifying stablecoins in respect of which they are the holder;
  3. (3) [to follow]
25/10/2027R

A statutory trust under CASS 16.5.2R does not permit a firm, in its capacity as trustee, to use trust money or assets described in that rule to borrow or lend, except in so far as such borrowing or lending forms part of a repurchase transaction or forms the act of placing money into a backing funds account.   

25/10/2027G

The effect of this section, CASS 16.2.13R, CASS 16.4.15R and CASS 16.4.16R is that a firm can remove any excess from a backing asset pool following a reconciliation. This applies however the excess arises, including through the receipt of interest or income, an increase in the value of assets in the backing asset pool or the receipt of redemption requests. When an excess is removed from the backing asset pool in compliance with this chapter, it is no longer held on trust under this section.

Point In Time
25/10/2027