Related provisions for CASS 5.6.8
1 - 16 of 16 items.
A firm can
hold client money in either
a general client bank account (CASS 5.5.38 R) or a designated client bank account (CASS 5.5.39 R). A firm holds all client money in general
client bank accounts for its clients as
part of a common pool of money so
those particular clients do
not have a claim against a specific sum in a specific account; they only have
a claim to the client money in
general. A firm holds client money in designated
client bank accounts for those clients who
requested
(1) Subject
to (4), a 2firm must
in relation to each of its appointed representatives, field representatives and other agents comply
with CASS 5.5.19 R to CASS
5.5.21 R (Immediate segregation) or with CASS 5.5.23 R (Periodic
segregation and reconciliation).(2) A firm must in relation to each representative or other agent keep a record
of whether it is complying with CASS 5.5.19 R to CASS 5.5.21 R or
with CASS 5.5.23 R.(3) A firm is, but without affecting the application
of CASS
(1) A firm must, on a regular basis, and at reasonable
intervals, ensure that it holds in its client
bank account an amount which (in addition to any other amount
which it is required by these rules to
hold) is not less than the amount which it reasonably estimates to be the
aggregate of the amounts held at any time by its appointed
representatives, field representatives,
and other agents.(2) A firm must, not later than ten business days following the expiry of each
period in
(1) A firm may operate as many client accounts
as it wishes.(2) A firm is not obliged to offer its clients the facility of a designated
client bank account.(3) Where
a firm holds money in
a designated client bank account,
the effect upon either:(a) the failure of a bank where any other client bank account is held; or(b) the failure of a third party to whom money has been transferred out of any other client bank account in accordance with CASS 5.5.34 R;(each of which is a secondary
A firm may
hold client money with a bank
that is not an approved bank if
all the following conditions are met:(1) the client money relates to one or more insurance
transactions which are subject to the law or market practice of a jurisdiction
outside the United Kingdom;(2) because
of the applicable law or market practice of that overseas jurisdiction, it
is not possible to hold the client money in
a client bank account with an approved bank;(3) the firm holds the money with
such
A firm owes
a duty of care to a client when
it decides where to place client money.
The review required by CASS 5.5.43 R is intended to ensure that the risks inherent
in placing client money with
a bank are minimised or appropriately diversified by requiring a firm to consider carefully the bank or banks
with which it chooses to place client money.
For example, a firm which is
likely only to hold relatively modest amounts of client
money will be likely to be able to satisfy this
The client
money resource, for the purposes of CASS
5.5.63 R (1)(a),2 is:(1) the
aggregate of the balances on the firm's client money
bank accounts, as at the close of business on the previous business day and, if held in accordance with CASS
5.4, designated investments (valued
on a prudent and consistent basis) together with client
money held by a third party in accordance with CASS 5.5.34 R;
and(2) (but
only if the firm is comparing
the client money resource with
its client's
If a primary
pooling event occurs:(1) client money held in each client
money account of the firm is
treated as pooled;(2) the firm must distribute that client
money in accordance with CASS 5.3.2 R or,
as appropriate, CASS 5.4.7 R, so that each client receives
a sum which is rateable to the client money entitlement
calculated in accordance with CASS 5.5.66 R; and(3) the firm must, as trustee, call in and make demand
in respect of any debt due to the firm as
trustee, and must liquidate
Client
money received by the firm (including
in its capacity as trustee under CASS
5.4 (Non-statutory trust)) after
a primary pooling event must
not be pooled with client money held
in any client money account
operated by the firm at the
time of the primary pooling event.
It must be placed in a client bank account that
has been opened after that event and must be handled in accordance with the client money rules, and returned to the relevant client without delay, except to the
Money held
in each general client bank account of
the firm must be treated as
pooled and:(1) any shortfall in client
money held, or which should have been held, in general client bank accounts, that has arisen
as a result of the failure of
the bank, must be borne by all the clients whose client money is held in a general
client bank account of the firm,
rateably in accordance with their entitlements;(2) a
new client money entitlement
must be calculated for each client by
the firm,
For each client with
a designated client bank account held
at the failed bank:(1) any shortfall in client
money held, or which should have been held, in designated client bank accounts that has
arisen as a result of the failure,
must be borne by all the clients whose client money is held in a designated
client bank account of the firm at
the failed bank, rateably in
accordance with their entitlements;(2) a
new client money entitlement
must be calculated for each of the relevant
Money held
in each general client bank account of
the firm must be treated as
pooled and:(1) any shortfall in client
money held, or which should have been held, in general client bank accounts, that has arisen
as a result of the failure,
must be borne by all the clients whose client money is held in a general
client bank account of the firm,
rateably in accordance with their entitlements;(2) a
new client money entitlement
must be calculated for each client by
the firm, to reflect
For each client with a designated client bank account held at the failed bank:(1) any shortfall in client money held, or which should have been held, in designated client bank accounts that has arisen as a result of the failure, must be borne by all the clients whose client money is held in a designated client bank account of the firm at the failed bank, rateably in accordance with their entitlements;(2) a new client money entitlement must be calculated for each of the relevant
Money held in each designated client fund account with the failedbank must be treated as pooled with any other designated client fund accountsof the firm which contain part of the same designated fund and:(1) any shortfall in client money held, or which should have been held, in designated client fund accounts that has arisen as a result of the failure, must be borne by each of the clients whose client money is held in that designated fund, rateably in accordance with their entitlements;(2)
If a primary pooling event occurs:(1) 1all client money held in a client bank account or a client transaction account1 of the firm is treated as pooled (forming a notional pool) except for client money held in a client transaction accountthat is an individual client account or an omnibus client account at an authorised central counterparty;(2) the firm must distribute client money comprising the notional pool in accordance with CASS 7.7.2 R, so that each client receives a sum
(1) A firm need not treat this chapter as applying in respect of a delivery versus payment transaction through a commercial settlement system if it is intended that the
safe custody asset2
is either to be: 2(a) in respect of a client's purchase, due to the client within one business day following the client's fulfilment of a payment obligation; or(b) in respect of a client's sale, due to the firm within one business day following the fulfilment of a payment obligation;unless
If a firm holds money as agent of an insurance
undertaking then the firm'sclients (who are not insurance
undertakings) will be adequately protected to the extent that
the premiums which it receives
are treated as being received by the insurance
undertaking when they are received by the agent and claims money and premium refunds
will only be treated as received by the client when
they are actually paid over. The rules in CASS
5.2 make provision for agency agreements between firms
3CASS
5.1.5 R (1)(b) and CASS
5.1.5 R (2) do not apply, and hence money is client money, in any case where:(1) in relation to an activity specified
in CASS 5.2.3 R (1)
(a) to CASS 5.2.3 R (1) (c), the insurance undertaking has agreed that the firm may treat money which
it receives and holds as agent of the undertaking,
as client money and in accordance
with the provisions of CASS
5.3 to CASS
5.6; and(2) the agreement in (1) is in writing
and adequate to show that the insurance
1A mandate is any means that give a firm the ability to control a client's assets or liabilities, which meet the conditions in (1) to (5): (1) they are obtained by the firm from the client, and with the client's consent;(2) they are in written form at the time they are obtained from the client;(3) they are retained by the firm;(4) they put the firm in a position where it is able to give any or all of the types of instructions described in (a) to (d):(a) instructions to another
The instructions referred to at CASS 8.2.1 R (4) are all instructions given by a firm to another person who also has a relationship with the firm'sclient. For example, the other person may be the client'sbank, intermediary, custodian or credit card provider. This means, for example, that any means by which a firm can control a client's money or assets for which it is itself responsible to the client (rather than any other person) would not amount to a mandate. This includes where
(1) A
firm which holds client money can discharge its obligation
to ensure adequate protection for its clients in
respect of such money by complying
with CASS
5.3 which provides for such money to
be held by the firm on the terms
of a trust imposed by the rules.(2) The
trust imposed by CASS
5.3 is limited to a trust in respect of client money which a firm receives
and holds. The consequential and supplementary requirements in CASS
5.5 are
designed to secure the proper segregation
A firm may
not handle client money in accordance
with the rules in this section
unless each of the following conditions is satisfied:(1) the firm must have and maintain systems and controls
which are adequate to ensure that the firm is
able to monitor and manage its client money transactions
and any credit risk arising from the operation of the trust arrangement and,
if in accordance with CASS 5.4.2 R a firm complies
with both the rules in CASS
5.3 and CASS
5.4, such systems and