Related provisions for CASS 5.5.52
1 - 20 of 95 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
When considering where to place client money and to determine the frequency
of the appropriateness test under CASS 5.5.43 R, a firm should
consider taking into account, together with any other relevant matters:(1) the
capital of the bank;(2) the
amount of client money placed,
as a proportion of the bank's capital and deposits;(3) the
credit rating of the bank (if available); and(4) to
the extent that the information is available, the level of risk in the investment
and loan activities
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
If a client has
notified a firm in writing that
he does not wish his money to
be held with a bank in the same group as
the firm, the firm must
either:(1) place
that client money in a client bank account with another bank in
accordance with CASS
5.5.38 R; or(2) return
that client money to, or pay
it to the order of, the client.
When a firm opens
a client bank account, the firm must give or have given written notice
to the bank requesting the bank to acknowledge to it in writing:(1) that
all money standing to the credit
of the account is held by the firm as
trustee (or if relevant in Scotland, as agent) and that the bank is not entitled
to combine the account with any other account or to exercise any right of
set-off or counterclaim against money in
that account in respect of any sum owed to it on any
In the case of a client
bank account in the United
Kingdom, if the bank does not provide the acknowledgement referred
to in CASS 5.5.49 R within 20 business days after
the firm dispatched the notice,
the firm must withdraw all money standing to the credit of the account
and deposit it in a client bank account with
another bank as soon as possible.
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.
(1) A firm must, as often as is necessary to ensure
the accuracy of its records and at least at intervals of not more than 25 business days:2(a) check whether its client money resource, as determined by CASS 5.5.65 R on the previous business day,
was at least equal to the client money requirement,
as determined by CASS 5.5.66 R or CASS 5.5.68 R, as at the close of
business on that day; and2(b) ensure that:2(i) any shortfall is
paid into a client bank account by
the close of business
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
To comply with its duties, the firm should show proper care:(1) in
the selection of a third party; and(2) when
monitoring the performance of the third party.In the case of client
money transferred to a bank, by demonstrating compliance with CASS 5.5.43 R, a firm should be
able to demonstrate that it has taken reasonable steps to comply with its
duties.
When a bank fails and
the firm decides not to make
good the shortfall in the amount
of client money held at that
bank, a secondary pooling event will
occur in accordance with CASS 5.6.20 R. The firm would
be expected to reflect the shortfall that
arises at the firm's bank in
the periodic client money calculation
by reducing the client money resource
and client money requirement
accordingly.
The client
money (insurance) distribution rules seek to ensure that clients who have previously specified that
they are not willing to accept the risk of the bank that has fails, and who therefore requested that their client money be placed in a designated client bank account as a different
bank, should not suffer the loss of the bank that has failed.
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
If a secondary
pooling event occurs as a result of the failure of
a bank where one or more designated client
bank accounts are held then 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.
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
Client
money received by the firm after
the failure of a bank, that
would otherwise have been paid into a client
bank account at that bank:(1) must
not be transferred to the failed bank
unless specifically instructed by the client in
order to settle an obligation of that client to
the failed bank; and(2) must
be, subject to (1), placed in a separate client
bank account that has been opened after the secondary
pooling event and either:(a) on
the written instruction of the client,
transferred
If a firm receives
a mixed remittance after the secondary pooling event which consists of client money that would have been paid into
a general client bank account,
a designated client bank account or
a designated client fund account maintained
at the bank that has failed,
it must:(1) pay
the full sum into a client bank account other
than one operated at the bank that has failed;
and(2) pay
the money that is not client money out of that client
bank account within one business
day
CASS 7A.3.6 R to CASS 7A.3.12AR3 do not apply if, on the failure of the relevant person:3(1) there is no secondary pooling shortfall; or3(2) where there is a secondary pooling shortfall, the firm pays an amount equal to the amount of client money which would have been held at that person if a secondary pooling shortfall had not occurred either:3(a) to its clients in the appropriate amounts such that they are compensated by the amount of the secondary pooling shortfall that they
The client money distribution and transfer rules3 seek to ensure that clients who have previously specified that they are not willing to accept the risk of the bank that has failed, and who therefore requested that their client money be placed in a designated client bank account at a different bank, should not suffer the loss of the bank that has failed.
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, and/or where one or more designated client bank accounts or designated client fund accounts are held,3 for the general pool or a3 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
Money Subject to CASS 7A.3.8AR, if a secondary pooling event occurs as a result of the failure of a bank, intermediate broker, settlement agent, OTC counterparty, exchange or clearing house, money3 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 secondary pooling shortfall3 in client money held, or which should have been held, in general client bank accounts and client
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 secondary pooling shortfall3 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
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 secondary pooling shortfall3 in client money held, or which should have been held, in designated client fund accounts that has arisen as a result of the
3A client whose money was held, or which should have been held, in a designated client fund account with a bank that has failed is not entitled to claim in respect of that money against any other client bank account of the firm that is not part of the same designated fund or against any client transaction account of the firm.
Client money received by the firm after the failure of a bank, exchange, clearing house, intermediate broker, settlement agent or OTC counterparty,3 that would otherwise have been paid into a client bank account or client transaction account at that bank, exchange, clearing house, intermediate broker, settlement agent or OTC counterparty, as the case may be3, for either the general pool or a particular sub-pool2:(1) must not be transferred to the failedperson3 unless specifically
If a firm receives a mixed remittance after the secondary pooling event which consists of client money that would have been paid into a general client bank account, a designated client bank account or a designated client fund account maintained at the bank that has failed, it must:(1) pay the full sum into a client bank account other than one operated at the bank that has failed; and(2) pay the money that is not client money out of that client bank account within one business
A3firm must notify the FCA as soon as reasonably practical after it becomes aware of the failure of any bank, exchange, clearing house, intermediate broker, settlement agent, OTC counterparty or other entity with which it has placed, or whom it has allowed to hold, client money3:(1) [deleted]3(2) [deleted]3(3) whether it intends to make good any secondary pooling shortfall that has arisen or may arise; and3(4) the amount of that secondary pooling shortfall, or the expected amount
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.
The main purposes of a client bank account acknowledgement letter are:(1) to put the approved bank on notice of a firm'sclients' interests in client money that has been deposited with such person;(2) to ensure that the client bank account has been opened in accordance with CASS 11.9.3 R, and is distinguished from any account containing money that belongs to the firm; and(3) to ensure that the approved bank understands and agrees that it will not have any recourse or right against
(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
(1) If, on countersigning and returning the client bank account acknowledgement letter to a firm, the relevant approved bank has also:(a) made amendments to any of the acknowledgement letter fixed text; or(b) made amendments to any of the acknowledgement letter variable text in a way that would alter or otherwise change the meaning of the acknowledgement letter fixed text;the client bank account acknowledgement letter will have been inappropriately redrafted for the purposes of
A CASS debt management firm must also retain any other documentation or evidence it believes is necessary to demonstrate that it has complied with each of the applicable requirements in this section (such as any evidence it has obtained to ensure that the individual that has countersigned a client bank account acknowledgement letter1 that has been returned to the firm was authorised to countersign the letter on behalf of the relevant approved bank).
Whenever a CASS debt management firm finds a countersigned client bank account acknowledgement letter to contain an inaccuracy, the firm must promptly draw up a new replacement client bank account acknowledgement letter under CASS 11.8.2 R and ensure that the new client bank account acknowledgement letter is duly countersigned and returned by the relevant approved bank.
If a CASS debt management firm'sclient bank account is transferred to another approved bank, the firm must promptly draw up a new client bank account acknowledgement letter under CASS 11.8.2 R and ensure that the new client bank account acknowledgement letter is duly countersigned and returned by the relevant approved bank within 20 business days of the firm sending it to that person.
19For a common platform firm:
- (1)
the MiFID Org Regulation applies, as summarised in SYSC 1 Annex 1 3.2G, SYSC 1 Annex 1 3.2-AR and SYSC 1 Annex 1 3.2-BR; and
- (2)
the rules and guidance apply as set out in the table below:
Subject
Applicable rule or guidance
Risk assessment
Risk management
Risk control: remuneration
Risk control: additional provisions
Additional rules for CCR firms
(1) 13The management body of a CRR firm has overall responsibility for risk management. It must devote sufficient time to the consideration of risk issues.(2) The management body of a CRR firm must be actively involved in and ensure that adequate resources are allocated to the management of all material risks addressed in the rules implementing the CRD and in the UK CRR22 as well as in the valuation of assets, the use of external ratings and internal models related to those risks.
(1) 13A CRR firm that is significant must establish a risk committee composed of members of the management body who do not perform any executive function in the firm. Members of the risk committee must have appropriate knowledge, skills and expertise to fully understand and monitor the risk strategy and the risk appetite of the firm.(2) The risk committee must advise the management body on the institution’s overall current and future risk appetite and assist the management body
(1) 13A CRR firm must ensure that the management body in its supervisory function and, where a risk committee has been established, the risk committee have adequate access to information on the risk profile of the firm and, if necessary and appropriate, to the risk management function and to external expert advice.(2) The management body in its supervisory function and, where one has been established, the risk committee must determine the nature, the amount, the format, and the
(1) 13A CRR firm's risk management function (article 23 of the MiFID Org Regulation19) must be independent from the operational functions and have sufficient authority, stature, resources and access to the management body.(2) The risk management function must ensure that all material risks are identified, measured and properly reported. It must be actively involved in elaborating the firm's risk strategy and in all material risk management decisions and it must be able to deliver
13The head of the risk management function must be an independent senior manager with distinct responsibility for the risk management function. Where the nature, scale and complexity of the activities of the CRR firm do not justify a specially appointed person, another senior person within the firm may fulfil that function, provided there is no conflict of interest. The head of the risk management function must not be removed without prior approval of the management body and must
A firm, on receiving any client money, must promptly place this money into one or more accounts opened with any of the following: (1) a central bank;(2) a CRD credit institution;(3) a bank authorised in a third country6; (4) a qualifying money market fund.[Note: article 4(1) of the MiFID Delegated Directive6]
(1) A firm that does not deposit client money with a central bank must exercise all due skill, care and diligence in the selection, appointment and periodic review of the CRD credit institution, bank or qualifying money market fund where the money is deposited and the arrangements for the holding of this money. 6(2) The firm must consider the need for diversification as part of its due diligence under (1).6[Note: article 4(2) first sub-paragraph of the MiFID Delegated Directi
When a firm makes the selection, appointment and conducts the periodic review of a CRD credit institution, a bank or a qualifying money market fund, it must take into account:(1) the expertise and market reputation of the third party with a view to ensuring the protection of clients’ rights6; and(2) any legal or regulatory6 requirements or market practices related to the holding of client money that could adversely affect clients' rights. [Note: article 4(2) second sub-paragraph
In complying with CASS 7.13.8 R and CASS 7.13.10 R, a firm should consider, as appropriate, together with any other relevant matters:(1) the capital of the CRD credit institution or bank;(2) the amount of client money placed, as a proportion of the CRD credit institution or bank's capital and deposits, and, in the case of a qualifying money market fund, compared to any limit the fund may place on the volume of redemptions in any period;(3) the extent to which client money that
A firm must take the necessary steps to ensure that client money deposited, in accordance with CASS 7.13.3 R, in a central bank, a credit institution, a bank authorised in a third country6 or a qualifying money market fund is held in an account or accounts identified separately from any accounts used to hold money belonging to the firm.[Note: article 2(1)(e) of the MiFID Delegated Directive6]
(1) An account which the firm uses to deposit client money under CASS 7.13.3 R (1) to CASS 7.13.3 R (3) must be a client bank account.(2) In respect of each8client bank account used by a firm to satisfy its obligation under CASS 7.13.3R(1) to (3)8:(a) the relevant bank's contractual counterparty must be the firm itself8; and(b) ) subject to paragraph (3A),8 the firm must be8 able to make withdrawals of client money promptly and, in any event, within one business day of a request
For the purpose of CASS 7.13.20 R an entity is a relevant group entity if it is:(1) (a) a CRD credit institution; or 6(b) a bank authorised in a third country; or6(c) a qualifying money market fund; or6(d) the entity operating or managing the qualifying money market fund; and6(2) a member of the same group as that firm. [Note: article 4(3) first sub-paragraph of the MiFID Delegated Directive]6
(1) A firm must make a record of the grounds upon which it satisfies itself as to the appropriateness of its selection and appointment of a bank or a qualifying money market fund under CASS 7.13.8 R. The firm must make the record on the date it makes the selection or appointment and must keep it from that date until five years after the firm ceases to use that particular person for the purposes of depositing client money under CASS 7.13.3 R.(2) A firm must make a record of each
If a firm is unable to identify money that it has received as either client money or its own money under CASS 7.13.37 R, it should consider whether it would be appropriate to return the money to the person who sent it or to the source from where it was received (3for example, the banking institution).
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
Unless a firm is listed in the table below, this section does not apply to it where both of the following conditions are satisfied:
- (1)
the firm has reported total revenue of less than £5 million as at its last accounting reference date; and
- (2)
the firm only has permission to carry on one or more of the following activities:
- (a)
- (b)
- (c)
- (d)
- (e)
making arrangements with a view to transactions in investments;
- (f)
assisting in the administration and performance of a contract of insurance in relation to non-investment insurance contracts;
- (g)
- (h)
- (i)
- (j)
- (k)
- (l)
establishing, operating or winding up a collective investment scheme;
- (m)
establishing, operating or winding up a personal pension scheme;
- (n)
establishing, operating or winding up a stakeholder pension scheme;
- (o)
- (p)
- (q)
- (r)
- (s)
- (t)
Table: Firms to which the exclusion in SUP 16.23.2R does not apply
a UK bank; |
||
a non-UK bank;2 |
||
a mortgage administrator; or |
||
a firm offering life and annuity insurance products. |
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).
In carrying out the checks required by CASS 11.11.8 R a CASS small debt management firm must use the values contained in its internal records and ledgers (for example, its cash book or other internal accounting records), rather than the values contained in the records it has obtained from approved banks with whom it has deposited client money (for example, bank statements).
In carrying out a CASS large debt management firm internal client money reconciliation, a CASS large debt management firm must use the values contained in its internal records and ledgers (for example, its cash book or other internal accounting records), rather than the values contained in the records it has obtained from approved banks with whom it has deposited client money (for example, bank statements).
A CASS large debt management firm should perform a CASS large debt management firm external client money reconciliation:(1) as regularly as is necessary; and(2) no less frequently than the CASS large debt management firm internal client money reconciliations; and(3) as soon as reasonably practicable after the date to which the reconciliation relates;to ensure the accuracy of its internal accounts and records against those of approved banks with whom client money is deposited.
In relation to the application of the client money rules (and any other rule in so far as it relates to matters covered by the client money rules) to the firms referred to in (1) and (2), the following is not client money:(1) any deposits within the meaning of the CRD held by a CRD credit institution; and[Note: article 16(9)7 of MiFID and article 4(1)7 of the MiFID Delegated Directive7](2) any money held by an approved bank that is not a CRD credit institution in an account with
The effect of CASS 7.10.16 R is that, unless notified otherwise in accordance with CASS 7.10.20 R or CASS 7.10.22 R, clients of CRD credit institutions or approved banks that are not CRD credit institutions should expect that where they pass money to such firms in connection with designated investment business these sums will not be held as client money.
A firm holding money in either of the ways described in CASS 7.10.16 R in respect of a client and providing the services to it referred to in CASS 7.10.19 R must:(1) explain to its clients the circumstances, if any, under which it will cease to hold any money in respect of those services as banker and will hold the money as trustee in accordance with the client money rules; and(2) set out the circumstances in (1), if any, in its terms of business so that they form part of its
If a CRD credit institution or an approved bank that is not a CRD credit institution wishes to hold client money for a client (rather than hold the money in either of the ways described in CASS 7.10.16 R) it must, before providing designated investment business services to the client, disclose the following information to the client:(1) that the money held for that client in the course of or in connection with the business described under (2) is being held by the firm as client
If a CASS debt management firm is unable to identify money that it has received as either client money or its own money under CASS 11.9.8 R (1), it should consider whether it would be appropriate to return the money to the person who sent it (or, if that is not possible, to the source from where it was received, for example, the bank). A firm should have regard to its fiduciary duties when considering such matters.
A firm in the RAG in column (1) and which is a type of firm in column (2) must submit its annual report and accounts to the FCA annually on a single entity basis.
(1) |
(2) |
|
RAG |
Firm type |
|
1 |
||
A non-UK bank5. |
||
2.2 |
The Society |
|
3 |
||
All other firms subject to the following chapters in IPRU(INV): |
||
(1) |
Chapter 3 |
|
(2) |
Chapter 5 |
|
(3) |
[deleted]7 |
|
4 |
||
All other firms subject to the following chapters in IPRU(INV): |
||
(1) |
Chapter 3 |
|
(2) |
Chapter 5 |
|
(3) |
[deleted]7 |
|
(4)6 |
Chapter 12 |
|
5 |
All firms |
|
6 |
All firms other than firms subject to IPRU (INV) Chapter 13 6 3 |
|
7 |
||
8 |
All firms other than firms subject to IPRU (INV) Chapter 13 6 3 |
|
A firm in the RAG group in column (1), which is a type of firm in column (2) and whose ultimate parent is a mixed activity holding company must:
- (1)
submit the annual report and accounts of the mixed activity holding company to the FCA annually; and
- (2)
notify the FCA that it is covered by this reporting requirement by email using the email address specified in SUP 16.3.10 G (3), by its accounting reference date.
(1)
(2)
RAG
Firm type
1
3
4
7
Firms must submit their annual report and accounts in accordance with SUP 16.7A.3 R within the following deadlines:(1) for a non-UK bank5, within 7 months of the accounting reference date;(2) for the Society or a service company, within 6 months of the accounting reference date; and(3) for all other firms, within 80 business days2 of the accounting reference date.2
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) This rule does not apply in respect of a transferable security or an approved money-market instrument to which COLL 5.2.12R (Spread: government and public securities) applies21.(2) For the purposes of this rule companies included in the same group for the purposes of consolidated accounts as defined in accordance with section 399 of Companies Act 2006, Directive 2013/34/EU25 or, in the same group in accordance with international accounting standards, are regarded as a single
(1) A transaction in a derivative must:(a) be in an approved derivative; or(b) be one which complies with COLL 5.2.23 R (OTC transactions in derivatives).(2) The underlying of a transaction in a derivative must consist of any one or more of the following to which the scheme is dedicated:(a) transferable securities permitted under COLL 5.2.8 R (3)(a) to (c) and COLL 5.2.8 R (3)(e)7;(b) approved money-market instruments7 permitted underCOLL 5.2.8 R (3)(a) to COLL 5.2.8 R (3)(d)7;77(c)
A transaction in an OTC derivative under COLL 5.2.20 R (1) (b) or, for the purposes of (1) only, executed by or on behalf of a regulated money market fund,23 must be:(1) with an approved counterparty; a counterparty to a transaction in derivatives is approved only if the counterparty is:(a) an eligible institution or an approved bank; 26(b) a person whose permission (including any requirements or limitations), as published in the Financial Services Register, permits it to enter
(1) 15A syndicated loan for the purposes of this guidance means a form of loan where a group or syndicate of parties lend money to a third party and, in return, receive interest payments during the life of the debt and a return of principal either at the end of the loan period or amortised over the life of the loan. Such loans are usually arranged through agent banks which may, among other things, maintain a record of the lenders’ interest in the loan and arrange or act as a
1The Small and Medium Sized Business (Credit Information) Regulations were made under the Small Business, Enterprise and Employment Act. The Small and Medium Sized Business (Credit Information) Regulations impose a duty on designated banks to provide information about their small and medium sized business customers (with the consent of those businesses) to designated credit reference agencies. The Treasury is the body that has the power to designate a bank or credit reference
1Regulation 26 of the Small and Medium Sized Business (Credit Information) Regulations applies many of the provisions of the Act regarding the FCA’s investigation and information-gathering powers to designated banks and designated credit reference agencies. The effect is to apply the same procedures under the Act for appointing investigators and requiring information when investigating any breaches of the Small and Medium Sized Business (Credit Information) Regulations.
(1) This rule applies to a bank that meets the following conditions:(a) on 31 December 2006 it had the benefit of IPRU(BANK) rule 3.3.12 (Reduced minimum capital requirement for a bank that is a credit institution which immediately before 1 January 1993 was authorised under the Banking Act 1987);(b) the relevant amount (as referred to in IPRU(BANK) rule 3.3.12) applicable to it was below €5 million as at 31 December 2006; and(c) on 1 January 2007 it did not comply with the base
Where two or more banks merge, all of which individually have the benefit of GENPRU 2.1.60 R, the PRA may agree in certain circumstances that the base capital resources requirement for the bank resulting from the merger may be the sum of the aggregate capital resources of the merged banks, calculated at the time of the merger, provided this figure is less than €5 million.
For the purpose of GENPRU 2.1.60 R:(1) an existing controller of a bank means:(a) a person who has been a parent undertaking of that bank since 31 December 2006 or earlier; or(b) a person who became a parent undertaking of that bank after 31 December 2006 but who, when he became a parent undertaking of that bank, was a subsidiary undertaking of an existing controller of that bank;(2) the relevant amount of capital as referred to in GENPRU 2.1.60R (2)(a) is adjusted by identifying
1The Small and Medium Sized Business (Finance Platforms) Regulations were made under the Small Business, Enterprise and Employment Act. The Small and Medium Sized Business (Finance Platforms) Regulations require designated banks to provide specified information about rejected loan applications made by small and medium sized business customers (with their consent) to designated finance platforms which must then provide such information to finance providers on request. The Treasury
Regulation 23 of the Small and Medium Sized Business (Finance Platforms) Regulations applies many of the provisions of the Act in relation to the FCA’s investigation and information-gathering powers in respect of designated banks and designated finance platforms. The effect of this is to apply the same procedures under the Act for appointing investigators and requiring information when investigating any breaches of the Small and Medium Sized Business (Finance Platforms) Regulations.
Applicable provisions of this section (see SUP 16.6.1 G)
Category of firm |
Applicable provisions |
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Depositary of an authorised fund10 5 |
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The main purposes of an acknowledgement letter are:(1) to put the bank, exchange, clearing house, intermediate broker, OTC counterparty or other person (as the case may be) on notice of a firm'sclients' interests in client money that has been deposited with, or has been allowed to be held by, such person;(2) to ensure that the client bank account or client transaction account has been opened in the correct form (eg, whether the client bank account is being correctly opened as
(1) For each client bank account, a firm must, in accordance with CASS 7.18.6 R, complete and sign a client bank account acknowledgement letter clearly identifying the client bank account, and send it to the 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 7.18.14 R and CASS 7.18.15 R, a firm must not hold or receive any client