Related provisions for CASS 5.5.27
41 - 60 of 157 items.
(1) A function is an FCA-specified significant-harm function for a UK relevant authorised person only to the extent:2(a) it is performed by a person from an establishment of the firm (or its appointed representative) in the United Kingdom; or2(b) the person performing that function is dealing with a client of the firm in the United Kingdom from an establishment of the firm (or its appointed representative) overseas.2(2) A function is an FCA-specified significant-harm function
The FCA interprets the phrase ‘dealing with’ in SYSC 5.2.19R as including having contact with clients and extending beyond ‘dealing’ as used in the phrase ‘dealing in investments’. ‘Dealing in’ is used in Schedule 2 to the Act to describe in general terms the regulated activities which are specified in Part II of the Regulated Activities Order.
3The FCA interprets the phrase ‘a client of the firm in the United Kingdom’ in SYSC 5.2.19R as referring to:(1) for a client which is a body corporate, its office or branch in the United Kingdom; or(2) for a client who is an individual, a client who is in the United Kingdom at the time of the dealing.
(1) A firm must make a record of the form of each notice provided and each agreement entered into under this chapter. This record must be made at the time that standard form is first used and retained for the relevant period after the firm ceases to carry on business with clients who were provided with that form.(2) A firm must make a record in relation to each client of:(a) the categorisation established for the client under this chapter, including sufficient information to support
A CASS debt management firm receives and holds client money as trustee on the following terms: (1) for the purposes and on the terms of the debt management client money rules and the debt management client money distribution rules; (2) subject to (3), for the clients for whom that money is held, according to their respective interests in it;(3) on failure of the CASS debt management firm, for the payment of the costs properly attributable to the distribution of the client money
Section 137B(1) of the Act provides that rules may make provisions which result in client money being held by a firm on trust. CASS 11.6.1 R creates such a rule in relation to client money held by a CASS debt management firm. The consequence of this rule is there is a fiduciary relationship between a CASS debt management firm and its client, under which client money is in the legal ownership of the firm but remains in the beneficial ownership of the client. In the event of failure
1When considering whether to grant or refuse an application under section 329(3) of the Act to vary or revoke a disapplication order, the FCA will take into account all the relevant circumstances. These may include, but are not limited to: (1) any steps taken by the person to rectify the circumstances which gave rise to the original order; (2) whether the person has ceased to present the risk to clients and consumers or to the FCA'sstatutory objectives which gave rise to the original
1The FCA will not generally grant an application to vary a disapplication order unless it is satisfied that the proposed variation will not result in the person presenting the same degree of risk to clients or consumers that originally gave rise to the order to disapply the exemption. Similarly, the FCA will not revoke a disapplication order unless and until it is satisfied that the person concerned is fit and proper to carry out exempt regulated activities generally or those
Subject to CASS 1.4.6 R, 5CASS applies to a depositary, when acting as such, with the following general modifications9: 'client' means 'trustee', 'trust', 'AIF', 'AIFM acting on behalf of the AIF', ‘UCITS scheme’, ‘authorised fund manager acting on behalf of the UCITS scheme’, 9or 'collective investment scheme', as appropriate.555
(1) 7The application of CASS for a trustee firm acting as a depositary is set out in CASS 1.4.6 R and CASS 1.4.7 R.(2) The application of CASS for a trustee firm that is not acting as a depositary is limited as follows:(a) the mandate rules apply;(b) for MiFID business, the custody chapter and the client money chapter apply; and(c) for business that is not MiFID business, the custody chapter and the client money chapter apply only to trustee firms acting as trustees of personal
(1) [deleted]77(2) 7[deleted]7(3) [deleted]77(3A) [deleted]77(4) [deleted]77(5) [deleted]525(6) [deleted]77(7) The debt management client money chapter applies to CASS debt management firms receiving or holding client money for, or on behalf of, a client in the course of or in connection with debt management activity.6
(1) CASS applies directly in respect of activities conducted with or for all categories of clients.22(2) [deleted]52225(3) The insurance client money chapter2 does not generally distinguish between different categories of client. However, the term consumer4is used for those to 4whom additional obligations are owed, rather than the term retail client.2 This is to be consistent with the client categories used in 1the Insurance: New Conduct of Business sourcebook4.2424(4) Each provision
(1) 7The fact that a firm'sclient is an affiliated company for MiFID business does not affect the operation of CASS to the firm in relation to that client.(2) For business that is not MiFID business, the operation of the custody chapter or the client money chapter may differ if a firm'sclient is an affiliated company and depending on certain other conditions (see, for example, CASS 6.1.10B R and CASS 7.10.26 R7).7
In negotiating its contract with a service provider, a firm should have regard to:(1) reporting or notification requirements it may wish to impose on the service provider;(2) whether sufficient access will be available to its internal auditors, external auditors or actuaries (see section 341 of the Act) and to the FCA2 (see SUP 2.3.5 R (Access to premises) and SUP 2.3.7 R (Suppliers under material outsourcing arrangements);(3) information ownership rights, confidentiality
In implementing a relationship management framework, and drafting the service level agreement with the service provider, a firm should have regard to:(1) the identification of qualitative and quantitative performance targets to assess the adequacy of service provision, to both the firm and its clients, where appropriate;(2) the evaluation of performance through service delivery reports and periodic self certification or independent review by internal or external auditors; and(3)
(1) 1A firm must not enter into an agreement with a client under which a charge is, or may become, payable for an optional additional product unless the client has actively elected to obtain that specific product. (2) A firm must not impose a charge on a client for an optional additional product under an agreement entered into on or after 1 April 2016 unless the client has actively elected to obtain that specific product before becoming bound to pay the charge.(3) A firm must
7COBS 2.3.1 R applies to a UK UCITS management company and EEA UCITS management company when providing collective portfolio management services, as if:(1) references to a client, were references to any UCITS it manages; and(2) in (2)(b) and (c) and (3) of that rule, references to MiFID or equivalent third country business were also references to the collective portfolio management activities of investment management and administration for the scheme.[Note: article 29(1) of the
For the purposes of this section, the receipt by an investment firm of a commission in connection with a personal recommendation or a general recommendation, in circumstances where the advice or recommendation is not biased as a result of the receipt of commission, should be considered as designed to enhance the quality of the recommendation to the client. [Note: recital 39 of MiFID implementing Directive]
(1) 1If a firm enters into an arrangement with another firm under which it makes or receives a payment of commission in relation to the sale of a packaged product that is increased in excess of the amount disclosed to the client, the firm is likely to have breached the rules on disclosure of charges, remuneration and commission (see COBS 6.4) and, where applicable, the rule on inducements in COBS 2.3.1R (2)(b), unless the increase is attributable to an increase in the premiums
An internal client money reconciliation should:(1) be one of the steps a firm takes to arrange adequate protection for clients' assets when the firm is responsible for them (see Principle 10 (Clients' assets), as it relates to client money);(2) be one of the steps a firm takes to satisfy its obligations under CASS 7.12.2 R and CASS 7.15.3 R and, where relevant, SYSC 4.1.1R (1) and SYSC 6.1.1 R, to ensure the accuracy of the firm's records and accounts;(3) for the normal approach
(1) Before using a non-standard method of internal client money reconciliation, a firm must:(a) establish and document in writing its reasons for concluding that the method of internal client money reconciliation it proposes to use will:(i) (for the normal approach to segregating client money) check whether the amount of client money recorded in the firm's records as being segregated in client bank accounts meets the firm's obligation to its clients under the client money rules
Principles 6 (Customers' interests), 7 (Communications with clients), 8 (Conflicts of interest), 9 (Customers: relationships of trust) and 10 (Clients' assets) impose requirements on firms expressly in relation to their clients or customers. These requirements depend, in part, on the characteristics of the client or customer concerned. This is because what is "due regard" (in Principles 6 and 7), "fairly" (in Principles 6 and 8), "clear, fair and not misleading" (in Principle
If the person with or for whom the firm is carrying on an activity is acting through an agent, the ability of the firm to treat the agent as its client under COBS 2.4.3 R3 (Agent as client) will not be available. For example, if a general insurer is effecting a general insurance contract through a general insurance broker who is acting as agent for a disclosed policyholder, the policyholder will be a client of the firm and the firm must comply with the Principles accordingly.
(1) 1A firm must make available to each of its clients to whom it provides prime brokerage services a statement in a durable medium:(a) showing the value at the close of each business day of the items in (3); and(b) detailing any other matters which that firm considers are necessary to ensure that a client has up-to-date and accurate information about the amount of client money and the value of safe custody assets held by that firm for it.(2) The statement must be made available
2Where a firm has entered into an agreement with a client under article 91 (Reporting obligations for prime brokers) of the AIFMD level 2 regulation, and to the extent that the firm makes available to the client the same statements as specified by that article that it is required to provide to the relevant depositary, the FCA will treat the obligations under CASS 9.2.1 R as satisfied by the firm.
Section 137B(1) of the Act (Miscellaneous ancillary matters) provides that rules may make provision which result in client money being held by a firm on trust (England and Wales and Northern Ireland) or as agent (Scotland only). This section creates a fiduciary relationship between the firm and its client under which client money is in the legal ownership of the firm but remains in the beneficial ownership of the client. In the event of failure of the firm, costs relating to the
The statutory trust under CASS 7.17.2 R does not permit a firm, in its capacity as trustee, to use client money to advance credit to the firm's clients, itself, or any other person. For example, if a firm wishes to undertake a transaction for a client in advance of receiving client money from that client to fund that transaction, it should not advance credit to that client or itself using other clients'client money (ie, it should not 'pre-fund' the transaction using other clients'
8A firm must ensure that a tied agent that is an appointed representative is of sufficiently good repute and that it possesses appropriate general, commercial and professional knowledge so as to be able to communicate accurately all relevant information regarding the proposed service to the client or potential client. This does not limit a firm's obligations under SUP 12.4.2 R.[Note: paragraphs 3 and 4 of article 23(3) of MiFID]
1
Multiple principal agreement
Matter |
Explanation |
|
1. |
Scope of appointment |
The scope of appointment given by each principal to the appointed representative. |
2. |
Complaints handling |
The identity of the principal which will be the point of contact for a complaint from a client (referred to as the "lead-principal" in SUP 12.4.5D G to SUP 12.4.5E G). |
An agreement that each principal will co-operate with each other principal in resolving a complaint from a client in relation to the appointed representative's conduct. |
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The arrangements for complaints handling, including arrangements for resolving disputes between the principals in relation to their liability to a client in respect of a complaint and arrangements for dealing with referrals to the Financial Ombudsman Service. |
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3. |
The arrangements for approving financial promotion. |
|
4. |
Control and monitoring |
The arrangements for the control and monitoring of the activities of the appointed representative (see in particular SUP 12.6.6 R (Regulated activities and investment services outside the scope of appointment) and SUP 12.6.7 G (Senior management responsibility for appointed representatives)). |
5. |
Approved person status |
The arrangements for making applications for approved person status (see SUP 10A and SUP 10C12 (Approved persons) and the corresponding PRA requirements).12 2323 |
6. |
Training and competence |
The arrangements for training and competence (see TC). |
7. |
Co-operation |
The arrangements for co-operation over any other issues which may arise from the multiple appointments, including issues which may damage the interests of clients dealing with the appointed representative and administrative issues. |
An agreement by each principal to take reasonable steps to ensure that it does not cause the appointed representative or any of its other principals to be in breach of their obligations to each other or under the regulatory system. |
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8. |
Sharing information |
The arrangements for sharing information on matters relevant to the matters covered under the multiple principal agreement and each principal's obligations under SUP 12.6 (Continuing obligations of firms with appointed representatives). |
An agreement that each principal will notify each other principal of any information which is materially relevant to the multiple principal agreement. |
1One effect of the multiple principal agreement is to introduce a 'lead-principal' concept in relation to complaints handling for the benefit of the client. For example, where the client has been given advice by an appointed representative who has two principals, and the advice could have led to a transaction being arranged with either principal, the client will know that he may pursue his complaint with (but not necessarily against) one of the principals. Whether he later decides
If a firm ceases to be a participant firm or carry out activities within one or more classes54 part way through a financial year4 of the compensation scheme:4(1) it will remain liable for any unpaid levies which the FSCS has already made on the firm; and41(2) the FSCS may make one or more levies4 upon it (which may be before or after the firm5 has ceased to be a participant firm or carry out activities within one or more classes5,4 but must be before it ceases to be an authorised
For firms with exemptive relief under the Part 30 exemption order, the CFTC has issued certain no-action letters which, on the FCA's understanding, would allow such firms to use an LME bond arrangement as an alternative to complying with condition 2(g) of the Part 30 exemption order. Under an LME bond arrangement, a firm may arrange for a binding letter of credit to be issued to cover the 'secured amount' (as defined by section 30.7 of the General Regulations under the US Commodity
(1) A physical asset reconciliation is a separate process to the internal custody record check. Firms that hold physical safe custody assets for clients are required to perform both processes. (2) The purpose of a physical asset reconciliation is to check that a firm's internal records and accounts of the physical safe custody assets kept by the firm for clients are accurate and complete, and to ensure any discrepancies are investigated and resolved.
If a firmacting as trustee or depositary of an AIF that is an authorised AIF deposits safe custody assets belonging to a client with a third party, under article 89(1)(c) (Safekeeping duties with regard to assets held in custody) of the AIFMD level 2 regulation, the firm should seek to ensure that the third party provides the firm with adequate information (for example in the form of a statement) as at a date or dates specified by the firm which details the description and amounts
(1) This rule applies where a firm identifies a discrepancy as a result of, or that reveals, a shortfall, which the firm has not yet resolved.(2) Subject to paragraphs (3) and (4)7, until the discrepancy is resolved a firm must do one of the following:(a) appropriate a sufficient number of its own applicable assets to cover the value of the shortfall and hold them for the relevant clients under the custody rules in such a way that the applicable assets, or the proceeds of their
A firm must not communicate a solicited or unsolicited financial promotion that is not in writing, to a client3 outside the firm's premises, unless the personcommunicating it:(1) only does so at an appropriate time of the day;(2) identifies himself and the firm he represents at the outset and makes clear the purpose of the communication;(3) clarifies if the client would like to continue with or terminate the communication, and terminates the communication at any time that the