Related provisions for CASS 5.6.23
1 - 20 of 20 items.
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
Subject to CASS 5.5.41 R,
a firm that holds or intends
to hold client money with a
bank which is in the same group as
the firm must:(1) undertake
a continuous review in relation to that bank which is at least as rigorous
as the review of any bank which is not in the same group,
in order to ensure that the decision to use a group bank
is appropriate for the client;(2) disclose
in writing to its client at
the outset of the client relationship
(whether by way of a client agreement,4terms
of
A firm must
not hold, for a consumer5, client money in
a client bank account outside
the United Kingdom, unless
the firm has previously disclosed
to the consumer5 (whether in its terms of business, client
agreement11 or otherwise in writing):5511(1) that
his money may be deposited in
a client bank account outside
the United Kingdom but that
the client may notify the firm that he does not wish his money to be held in a particular jurisdiction;(2) that
in such circumstances, the
On the failure of
a third party with which client money is
held, a firm must notify the FCA:(1) as
soon as it becomes aware, of the failure of
any bank, other broker or settlement agent or
other entity with which it has placed, or to which it has passed, client money; and(2) as
soon as reasonably practical, whether it intends to make good any shortfall that has arisen or may arise and
of the amounts involved.
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 secondary
pooling event occurs as a result of the failure of
a bank where one or more general client bank
accounts are held, then:(1) in
relation to every general client bank account of
the firm, the provisions of CASS 5.6.22 R and CASS 5.6.26 R to CASS 5.6.28 G will apply;(2) in
relation to every designated client bank account held
by the firm with the failed bank, the provisions of CASS 5.6.24 R and CASS 5.6.26 R to CASS 5.6.28 G will apply; and(3) any money held at a
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
If a secondary pooling event occurs as a result of the failure of a bank where one or more general client bank accounts are held for the general pool or particular sub-pool2, then:(1) in relation to every general client bank account of the firm maintained in respect of that pool2, the provisions of CASS 7A.3.8 R, CASS 7A.3.13 R and CASS 7A.3.14 R will apply;(2) in relation to every designated client bank account held by the firm with the failed bank for the relevant pool2, the
Money held in each general client bank account and client transaction account of the firm for the general pool or a sub-pool2must be treated as pooled and:(1) any shortfall in client money held, or which should have been held, in general client bank accounts and client transaction accounts for the relevant pool2, that has arisen as a result of the failure of the bank, must be borne by all the clients of that pool2 whose client money is held in such 2general client bank account
For each client with a designated client bank account maintained by the firm for the general pool or a particular sub-pool and2 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 of the relevant pool2 whose client money is held in a designated client bank account of the firm at the failed bank, rateably in accordance with
Money held by the firm2 in each designated client fund account for the general pool or a particular sub-pool with the failedbank must be treated as pooled with any other designated client fund accounts for the general pool or a particular sub-pool as the case may be2 which contain part of the same designated fund and:2(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
On the failure of a third party with which money is held, a firm must notify the FCA:(1) as soon as it becomes aware of the failure of any bank, intermediate broker, settlement agent, OTC counterparty or other entity with which it has placed, or to which it has passed, client money; and(2) as soon as reasonably practical, whether it intends to make good any shortfall that has arisen or may arise and of the amounts involved.
The debt management client money distribution rules seek, in the event of the failure of a CASS debt management firm or of an approved bank at which the CASS debt management firm holds client money, to protect client money and to facilitate the timely payment of sums to creditors or the timely return of client money to clients.
(1) Subject to (2), if a secondary pooling event occurs as a result of the failure of an approved bank where one or more client bank accounts are held then in relation to every client bank account of the firm, the provisions of CASS 11.13.12 R (1), CASS 11.13.12 R (2) and CASS 11.13.12 R (3) will apply.(2) CASS 11.13.12 R does not apply if, on the failure of the approved bank, the CASS debt management firm pays to its clients, or pays into a client bank account at an unaffected
Money held in each 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 client bank accounts, that has arisen as a result of the failure of the approved bank, must be borne by all clients whose client money is held in a client bank account of the firm, rateably in accordance with their entitlements to the pool;(2) a new client money entitlement must be calculated for each client by the firm, to
Before a CASS large debt management firm opens a client bank account and as often as is appropriate on a continuing basis (such frequency being no less than once in each financial year) it must take reasonable steps to establish that it is appropriate for the firm to hold client money at the approved bank concerned.
In complying with CASS 11.7.3 R a CASS large debt management firm should consider as appropriate, together with any other relevant matters:(1) the amount of client money held by the firm;(2) the amount of client money the firm anticipates holding at the approved bank; and(3) the credit worthiness of the approved bank.
A CASS small debt management firm can demonstrate compliance with CASS 11.7.1 G by checking that the person it proposes to hold client money with is an approved bank and that nothing has come to the firm's attention to cause it to believe that such person is not an appropriate place at which to hold client money.
A CASS large debt management firm must make a record of the grounds upon which it satisfies itself as to the appropriateness of its selection of an approved bank. The firm must make the record on the date it makes the selection and must keep it from the date of such selection until five years after the firm ceases to use the approved bank to hold client money.
In accordance with CASS 11.11.1 R, a CASS debt management firm must maintain internal records and accounts of the client money it holds (for example, a cash book). These internal records are separate to any external records it has obtained from approved banks with whom it has deposited client money (for example, bank statements).
The records maintained under this section, including the sub-pool disclosure documents, are a record of the firm that must be kept in a durable medium for at least five years following the date on which client money was last held by the firm for a sub-pool to which those records or the sub-pool disclosure document applied.
Discussions with the appropriate regulator8 are particularly relevant where the firm has to discharge obligations to its customers or policyholders before it can cease carrying on a regulated activity. This may be the case, for example, where the firm is an insurer, a bank a dormant account fund operator,4 or, as is often the case, holding client money or customer assets.8
If an insurer,4 a bank, or a dormant account fund operator4 wishes to cease carrying on all regulated activities for which it has Part 4A permission,8 it will usually be necessary to wind down the business over a long term period which is normally more than six months. This may also be the case for a firm holding client money or customer assets. In these circumstances, it will usually be appropriate for the firm to apply for variation of its Part 4A permission and/or imposition
(1) Specific guidance on the additional procedures for a firm winding down (running off) its business in the circumstances discussed in SUP 6.2.8 G is in SUP 6 Annex 4.(2) The guidance in SUP 6 Annex 4 applies to any firm that is applying for variation of Part 4A permission or for the imposition, variation or cancellation of a requirement before it applies for cancellation of Part 4A permission8 to enable it to wind down (run off) its business over a long term period of six months
(1) For each client bank account, a CASS debt management firm must, in accordance with CASS 11.8.4 R, complete and sign a client bank account acknowledgement letter clearly identifying the client bank account, and send it to the approved bank with whom the client bank account is, or will be, opened, requesting the bank to acknowledge and agree to the terms of the letter by countersigning it and returning it to the firm.(2) Subject to CASS 11.8.6 R, a CASS debt management firm
Subject to CASS 11.1.6 R, only the rules and guidance in the debt management client money chapter listed in the table below apply to CASS small debt management firms.
Reference |
Rule |
Application |
|
Firm classification |
|
Responsibility for CASS operational oversight |
|
Definition of client money and discharge of fiduciary duty |
|
Organisational requirements |
|
Statutory trust |
|
Selecting an approved bank at which to hold client money |
|
Client bank account acknowledgement letters |
|
Segregation and the operation of client money accounts |
|
Payments to creditors |
|
CASS 11.11.1 R to CASS 11.11.12 R , CASS 11.11.30 R and CASS 11.11.32 G |
Records, accounts and reconciliations |
CASS 11 resolution pack |
|
Client money distribution in the event of a failure of a firm or approved bank |
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