Related provisions for SUP 3.10.4A

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SUP 3.10.4RRP
An auditor of a firm must submit a client assets 5report addressed to the FCA which: 5(1) 5(a) states the matters set out in SUP 3.10.5 R; and55(b) specifies the matters to which SUP 3.10.9 R and SUP 3.10.9A R refer; or (2) if the firm claims not to hold client money or custody assets, states whether anything has come to the auditor's attention that causes him to believe that the firm held client money or custody assets during the period covered by the report.
SUP 3.10.5RRP

Client assets report

111

Whether in the auditor's opinion

(1)

the firm has maintained systems adequate to enable it to comply with the custody rules (except CASS 6.7)13, the collateral rules,5 the client money rules3 (except CASS 5.2)13, the debt management client money rules9, the claims management client money rules14 and the mandate rules5 throughout the period ;5

353

(2)

the firm was in compliance with the custody rules (except CASS 6.7)13, the collateral rules,5 the client money rules3 (except CASS 5.2), the debt management client money rules, the claims management client money rules14 and the mandate rules5,13 at the date as at which the report has been made;

3539

(3)

in the case of an investment management firm, personal investment firm, a UCITS firm,2securities and futures firm, firm acting as trustee or depositary of an AIF, or IFPRU investment firm8or BIPRU firm8,2 when a subsidiary of the firm is during the period 5a nominee company in whose name custody assets of the firm are registered during the period, 5 that nominee company has maintained throughout the period5 systems for the custody, identification and control of custody assets which:

22785

(a)

were5 adequate; and

5

(b)

included5 reconciliations at appropriate intervals between the records maintained (whether by the firm or the nominee company) and statements or confirmations from custodians or from the person who maintained5 the record of legal entitlement; and

55

(4)

if there has been a secondary pooling event during the period, the firm has 1complied with the rules in943CASS 5.6 and CASS 7A43 (Client money distribution)1,14CASS 11.13 (debt management client money distribution rules)9 and CASS 13.11 (claims management client money distribution rules)14 in relation to that pooling event.

3
SUP 3.10.5ARRP
5In relation to a client assets report provided in accordance with SUP 3.10.4 R, an auditor must ensure that it:(1) is submitted in the form prescribed by SUP 3 Annex 1 R; and(2) is signed on behalf of the audit firm by the individual with primary responsibility for a firm's client assets report and in that individual’s own name.
SUP 3.10.5BGRP
SUP 3.10.4 R provides that an auditor must ensure that a client assets report is prepared in accordance with the terms of, as the case may be, a reasonable assurance engagement or a limited assurance engagement. However, the FCA also expects an auditor to have regard, where relevant, to material published by the Financial Reporting Council 11that deals specifically with the client assets report which the auditor is required to submit to the FCA. In the FCA's view, a client assets
SUP 3.10.5CRRP
(1) An auditor must ensure that the information provided to it by a firm in accordance with SUP 3.11.1 G is included in the client assets report. (2) If by the date at which the report is due for submission in accordance with SUP 3.10.7 R or SUP 3.10.8A R an auditor has not received the information prescribed in SUP 3.11.1 G it must submit the report without that information, together with an explanation for its absence.
SUP 3.10.6RRP
The period covered by a report under SUP 3.10.4 R must end not more than 53 weeks after the period covered by the previous report on such matters, or, if none, after the firm is authorised or becomes subject to SUP 3.11 and its auditor becomes subject to SUP 3.10.55
SUP 3.10.7RRP
An auditor must deliver a client assets 5report under SUP 3.10.4 R to the FCA within four months 5from the 3end of each period covered, unless it is the auditor of a firm falling within category (10) of SUP 3.1.2 R.1[Note: article 8 of the MiFID Delegated Directive]1235
SUP 3.10.8RRP
335(1) 5If an auditor expects that it will fail to comply with SUP 3.10.7 R, it must no later than the end of the four month period in question:(a) notify the FCA that it expects that it will be unable to deliver a client assets report by the end of that period; and(b) ensure that the notification in (a) is accompanied by a full account of the reasons for its expected failure to comply with SUP 3.10.7 R.(2) If an auditor fails to comply with SUP 3.10.7 R, it must promptly:(a)
SUP 3.10.8ARRP
1The auditor of a firm falling within category (10) of SUP 3.1.2 R must deliver a report under SUP 3.10.4 R:(1) to the firm so as to be received within four months of the end of each period covered; and(2) to the FCA upon request within six years of the end of the period covered.
SUP 3.10.8BGRP
1The rights and duties of auditors are set out in SUP 3.8 (Rights and duties of all auditors) and SUP 3.10 (Duties of auditors: notification and report on client assets). SUP 3.8.10 G also refers to the auditor's statutory duty to report certain matters to the FCA imposed by regulations made by the Treasury under sections 342(5) and 343(5) of the Act (information given by auditor or actuary to a regulator). An auditor should bear these rights and duties in mind when carrying out
SUP 3.10.8DRRP
5An auditor must:(1) deliver to a firm a draft of its client assets report such that the firm has an adequate period of time to consider the auditor’s findings and to provide the auditor with comments of the kind to which SUP 3.11.1 G refers; and(2) unless it is the auditor of a firm falling within category (10) of SUP 3.1.2 R, deliver to the firm a copy of the final report at the same time as it delivers that report to the FCA in accordance with SUP 3.10.7 R.
SUP 3.10.9RRP
If the client assets 5report under SUP 3.10.4 R states that one or more of the applicable requirements described in 5SUP 3.10.5 R(1) to (4) has or5 have not been met, the auditor must specify in the report each of 5those requirements and the respects in which it has or 5they have not been met.
SUP 3.10.9ARRP
(1) 5Whether or not an auditor concludes that one or more of the requirements specified in SUP 3.10.5 R (1) to (4) has or have been met, the auditor must ensure that the client assets report identifies each individual rule in respect of which a breach has been identified.(2) 5If an auditor does not identify a breach of any individual rule, it must include a statement to that effect in the client assets report.
SUP 3.10.9CGRP
(1) 5The FCA expects that the list of breaches will include every breach of a rule in CASS insofar as that rule is within the scope of the client assets report and is identified in the course of the auditor’s review of the period covered by the report, whether identified by the auditor or disclosed to it by the firm, or by any third party.(2) 5For the purpose of determining whether to qualify its opinion or express an adverse opinion, the FCA would expect an auditor to exercise
SUP 3.10.10RRP
If an auditor is unable to form an opinion as to whether one or more of the applicable requirements described in SUP 3.10.5 R have been met, the auditor must specify in the report under SUP 3.10.4 R those requirements and the reasons why the auditor has been unable to form an opinion.
SUP 3.10.12RRP
An auditor of a firm must submit a report under SUP 3.10.4 R in accordance with the rules in SUP 16.3.6 R to SUP 16.3.13 R as if those rules applied directly to the auditor.
SUP 3.11.1GRP
1A firm should ensure that:(1) it considers the draft client assets report provided to the firm by its auditor in accordance with SUP 3.10.8DR (1) in order to provide an explanation of: (a) the circumstances that gave rise to each of the breaches identified in the draft report; and(b) any remedial actions that it has undertaken or plans to undertake to correct those breaches; and(2) the explanation provided in accordance with (1):(a) is submitted to its auditor in a timely fashion
SUP 3.11.4GRP
1SUP 3.4.2 R provides that a firm must take reasonable steps to ensure that its auditor has the required skill, resources and experience to perform its functions. The FCA expects a firm to keep under review the adequacy of the skill, resources and experience of its auditor and should critically assess the content of the client assets report as part of that ongoing review.
SUP 3.2.6GRP
4The rights and duties of auditors are set out in SUP 3.8 (Rights and duties of all auditors) and SUP 3.10 (Duties of auditors: notification and report on client assets). SUP 3.8.10 G includes the auditor's statutory duty to report certain matters to the FCA8 imposed by regulations made by the Treasury under sections 342(5) and 343(5) of the Act (information given by auditor or actuary to a regulator8). An auditor should bear these rights and duties in mind when carrying out client