Related provisions for CASS 7.16.30

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To access the FCA Handbook Archive choose a date between 1 January 2001 and 31 December 2004 (From field only).

CASS 5.5.15GRP
A firm which takes advantage of CASS 5.5.14 R will need to consider whether its permission should include the permitted activity of managing investments. If the firm is granted a power to manage with discretion the funds over which it is appointed as trustee under the trust deed required by CASS 5.4 then it will be likely to need a permission to manage investments. It is unlikely to need such a permission, however, if it is merely granted a power to invest but the deed stipulates
CASS 5.5.30RRP
(1) In relation to consumers5, a firm must, subject to (2), take reasonable steps to ensure that its terms of business or other client agreements4 adequately explain, and where necessary obtain a client's informed consent to, the treatment of interest and, if applicable, investment returns, derived from its holding of client money and any segregated designated investments.54(2) In respect of interest earned on client bank accounts, (1) does not apply if a firm has reasonable ground
CASS 5.5.65RRP
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
CASS 7.10.7FGRP
(1) 4Where a firm has made an election under CASS 7.10.7AR: (a) it should treat money held for a client as client money both in the course of or in connection with: (i) operating an electronic system in relation to lending; and(ii) operating an electronic system in relation to non-P2P agreements;(b) (a) is regardless of whether, at the time the firm is holding the money, the client could or could not be a lender under a P2P agreement; and(c) under SYSC 4.1.8ER(2) it will be not
CASS 7.16.22ERP
  1. (1)

    A firm may calculate either:

    1. (a)

      one individual client balance for each client,1 based on the total of the firm's holdings for that1client; or

    2. (b)

      a number of individual client balances for each client, equal to the number of products or business lines the firm operates for that client and each balance based on the total of the firm's holdings for that client in respect of the particular product or business line.1

  2. (2)

    Each individual client balance for a client should be calculated in accordance with this table:

    Individual client balance calculation

    Free money (sums held for a client free of sale or purchase (eg, see (3)(a)) and

    A

    sale proceeds due to the client:

    (a)

    for principal deals when the client has delivered the designated investments; and

    B

    (b)

    for agency deals, when:

    (i)

    the sale proceeds have been received by the firm and the client has delivered the designated investments; or

    C1

    (ii)

    the firm holds the designated investments for the client; and

    C2

    the cost of purchases:

    (c)

    for principal deals, paid for by the client when the firm has not delivered the designated investments to the client; and

    D

    (d)

    for agency deals, paid for by the client when:

    (i)

    the firm has not remitted the money to, or to the order of, the counterparty; or

    E1

    (ii)

    the designated investments have been received by the firm but have not been delivered to the client;

    E2

    Less

    money owed by the client for unpaid purchases by, or for, the client if delivery of those designated investments has been made to the client; and

    F

    proceeds remitted to the client for sales transactions by, or for, the client if the client has not delivered the designated investments.

    G

    Individual client balance 'X' = (A+B+C1+C2+D+E1+E2)-F-G

    X
  3. (3)

    When calculating an individual client balance for each client, a firm should also:

    1. (a)

      ensure it includes:

      1. (i)

        client money consisting of dividends received and interest earned and allocated (see CASS 7.11.32 R);

      2. (ii)

        client money consisting of dividends (actual or payments in lieu), stock lending fees and other payments received and allocated (see CASS 6.1.2 G);

      3. (iii)

        money the firm appropriates and segregates as client money to cover an unresolved shortfall in safe custody assets it identifies in its internal records which is attributable to an individual client (see CASS 6.6.54R (2)); and

      4. (iv)

        money the firm segregates as client money instead of an individual client's safe custody asset until such time as the relevant delivery versus payment transaction settles under CASS 6.1.12R (2); and

    2. (b)

      deduct any amounts due and payable by the client to the firm (see CASS 7.11.25 R).

  4. (4)

    Compliance with (1), (2) and (3)1 may be relied on as tending to establish compliance with CASS 7.16.21 R.

CASS 9.5.1GRP
(1) Firms to which COBS 16.4 applies are reminded that, under COBS 16.4, they are required to send to each of their clients at least once a year a statement in a durable medium of those designated investments and/or client money they hold for that client. A firm which manages investments may provide this statement in its periodic statement, as required under COBS 16.3.2(2) COBS 16.4 (Statements of client designated investments or client money) applies, in accordance with COBS
CASS 9.5.2GRP
Firms are reminded that the requirements in COBS 16.4, article 63 of the MiFID Org Regulation and COBS 16A.42 only set out the minimum frequency at which firms must report to their clients on their holdings of designated investments and/or client money. Firms may choose to report to their clients more frequently.
CASS 7.13.11GRP
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
CASS 5.6.7RRP
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
CASS 6.1.1AGRP
2The regulated activity of safeguarding and administering investments covers both the safeguarding and administration of assets (without arranging) andarranging safeguarding and administration of assets,5 when those assets are either safe custody investments or custody assets. A safe custody investment is, in summary, a designated investment which a firm receives or holds on behalf of a client. Custody assets include designated investments, and any other assets that the firm holds
CASS 9.4.1GRP
(1) Firms to which COBS 6.1 applies are reminded that, under COBS 6.1.7R, a firm that holds clientdesignated investments or client money must provide its clients with specific information about how the firm holds those clientdesignated investments and client money and how certain arrangements might give rise to specific consequences or risks for those clientdesignated investments and client money.2(2) COBS 6.1 (Information about the firm and compensation information (non-MiFID
CASS 9.4.2RRP
1A firm to which COBS 6.1 applies2 that holds custody assets or client money must, in relation to its business for which COBS 6.1 applies2:(1) provide the information in COBS 6.1.7 R for any custody assets the firm may hold for a client, including any custody assets which are not designated investments; and(2) provide the information in COBS 6.1.7 R and in (1) to each of its clients.
CASS 9.4.2BRRP
2A firm to which COBS 6.1ZA applies that holds custody assets or client money must, in relation to its business for which COBS 6.1ZA applies:(1) provide the information referred to in paragraphs 2 to 7 of article 49 of the MiFID Org Regulation for any custody asset that the firm may hold for a client, including:(a) any custody asset which is a designated investment but not a financial instrument; and(b) any custody asset which is neither a designated investment nor a financial
CASS 3.2.4GRP
When appropriate, firms that enter into the arrangements with retail clients 3 covered in this chapter 2 will be expected to identify in the statement of custody assets sent to the client in accordance with COBS 16.4 (Statements of client designated investments or client money), article 63 of the MiFID Org Regulation (see COBS 16A.5)5 or CASS 9.5 (Reporting to clients on request)4 details of the assets which form the basis of the arrangements. Where the firm utilises global netting
COBS 16.4.1RRP
(1) A firm that holds clientdesignated investments or client money for a client must send that client at least once a year a statement in a durable medium of those designated investments or that client money unless:4(a) 4such a statement has been provided in a periodic statement; or(b) 4the firm: (i) 4provides the client with access to an online system, which qualifies as a durable medium, where up-to-date statements of a client’sdesignated investments or client money can be easily
CASS 8.1.2BGRP
(1) 3CASS 8.1.2A R is not an absolute exemption, but it excludes the application of the mandate rules in relation to money or assets that a firm has received, is holding, or is responsible for (as appropriate and in the circumstances described in CASS 8.1.2A R).(2) This means that, for example in respect of CASS 8.1.2A R (1), a firm holding client money in accordance with CASS 5 or CASS 7 does not also need to comply with the mandate rules in relation to the client money which
CASS 5.4.7RRP
The deed referred to in CASS 5.4.6 R must provide that the money (and, if appropriate, designated investments) are held:(1) for the purposes of and on the terms of:(a) CASS 5.4;(b) the applicable provisions of CASS 5.5; and(c) the client money (insurance) distribution rules(2) subject to (41), for the clients (other than clients which are insurance undertakings when acting as such) 1for whom that money is held, according to their respective interests in it;(3) after all valid
FEES 4.2.7KRRP

42Where the measure is not cumulative (e.g. the number of traders for fee-block A10), the firm must use the figure relating to the valuation date specified in FEES 4 Annex 1AR Part 563 (e.g. 31 December for A10)48. Table A sets out the reporting requirements for the key fee-blocks when full48 actual data is not available:

Table A: calculating tariff data for second and subsequent years of authorisation when full trading figures are not available

48

Fee-block

Tariff base

Calculation where trading data are not available

A1. Deposit acceptors

Average MELS for October - December

Use data available at 31 December or, if trading has not commenced by 31 December, use nil48.

A2. Home finance providers and administrators

Number of relevant contracts entered into or being administered in the twelve months up to 31 December

Apply the formula (A÷B) x 12 to arrive at an annualised figure.

A3. Insurers - general

Gross written premium for fees purposes (GWP) 43for the financial year ended in the calendar year ending 31 December and best estimate liabilities for fees purposes (BEL) 43 valued at the end of the financial year

GWP 43 – apply the formula (A÷B) x 12 to arrive at an annualised figure.

BEL – use 43 data at valuation date or, if trading has not commenced by then, use nil48.

A4. Insurers - life

Gross written premium for fees purposes (GWP) 43 for the financial year ended in the calendar year ending 31 December and best estimate liabilities for fees purposes (BEL) 43 valued at the end of the financial year

A5. Managing agents at Lloyd’s

Active capacity in respect of the underwriting year at the beginning of the period to which the fee relates

Not applicable.

A6. The Society of Lloyd’s

Bespoke fee

Not applicable.

A7. Portfolio managers

Funds under management valued at 31 December

Use data as at 31 December or, if trading has not commenced by 31 December, use nil48.

A9. Managers and depositaries of investment funds, and operators of collective investment schemes or pension schemes

Annual gross income for the financial year ended in the calendar year ending 31 December

Apply the formula (A÷B) x 12 to arrive at an annualised figure.

A10. Firms dealing as principal

Number of traders as at 31 December

Use data as at 31 December or, if trading has not commenced by 31 December, use nil48.

A13. Advisors, arrangers, dealers or brokers

Annual income for the financial year ended in the calendar year ending 31 December

Apply the formula (A÷B) x 12 to arrive at the annualised figure

A14. Corporate finance advisers

A18. Home finance providers, advisers and arrangers

A19. General insurance distribution44

A21. Firms holding client money or assets, or both

The highest amount of client money and the highest amount of custody assets held over the 12 months ending 31 December

The highest amount of client money and/or custody assets over the period between the date of authorisation and 31 December or, if trading has not started, use nil48.

56A.23

Annual income for the financial year ended in the calendar year ending 31 December

Apply the formula (A÷B) x 12 to arrive at the annualised figure.

B. Market operators,41 MTF operators and OTF operators41

Annual income for the financial year ended in the calendar year ending 31 December54

Apply the formula (A÷B) x 12 to arrive at the annualised figure.54

B. Service companies

Annual income for the financial year ended in the calendar year ending 31 December

Apply the formula (A÷B) x 12 to arrive at the annualised figure.

B. Regulated benchmark45 administrators

Annual income for the financial year ended in the calendar year ending 31 December39

Apply the formula (A÷B) x 12 to arrive at the annualised figure.39

B. Recognised investment exchanges

Annual income for the financial year ended in the calendar year ending 31 December39

Apply the formula (A÷B) x 12 to arrive at the annualised figure.39

B. Recognised auction platforms55

49

Flat fee55

49

Not applicable55

49

B. Recognised overseas investment exchanges

Flat fee

Not applicable.

CC1. Credit-related regulated activities with limited permission

Annual income for the financial year ended in the calendar year ending 31 December

Apply the formula (A÷B) x 12 to arrive at an annualised figure.

CC2. Credit related regulated activities

40

40

40

G.2 Payment services institutions – deposit acceptors

See A1 deposit acceptors

G.3. Large payment services institutions

Relevant income

Apply the formula (A÷B) x 12 to arrive at an annualised figure.

G.4 Small payment institutions

Flat fee

Not applicable.

G.5 Other payment institutions

Relevant income

Apply the formula (A÷B) x 12 to arrive at an annualised figure.

G.10 Large electronic money institutions

Average outstanding e-money over 12 months ending 31 December

Average over the period from authorisation to 31 December.

G.11 Small electronic money institutions

Flat fee

Not applicable.

G.15 Issuer of regulated covered bonds

Value as at 31 December

Not applicable.

G.20 Consumer buy-to-let (CBTL) lender

Flat fee

Not applicable.

G.21 CBTL adviser and arranger
FEES 4.4.9DRP
3To the extent that a firm4 has provided the information required by FEES 4.4.7 D to the FCA as part of its compliance with another provision of the Handbook, it is deemed to have complied with the provisions of that direction.444
COBS 6.1.7RRP
(1) A firm that holds designated investments or client money for a client6 subject to the custody chapter or the client money chapter must provide that client with the following information:444(a) if applicable,(i) that the designated investments or client money of that client may be held by a third party on behalf of the firm;(ii) the responsibility of the firm under the applicable national law for any acts or omissions of the third party; and(iii) the consequences for the client
TC App 1.1.1RRP

1Activity

Products/Sectors

Is there an appropriate qualification4requirement?

4

Designated investment business carried on for a retail client

Providing basic advice

1.

Stakeholder products excluding a deposit-based stakeholder product

No

Advising or giving personal recommendations (as relevant)13

2.

Giving personal recommendations on securities13 which are not stakeholder pension schemes, personal pension schemes7 or broker funds

Yes

3.

Giving personal recommendations on derivatives13

Yes2

4.

Giving personal recommendations on retail investment products13 which are not broker funds

66

Yes2

5.

Giving personal recommendations on13Friendly Societylife policies where the employee is not reasonably expected to receive a remuneration of greater than £1000 a year in respect of such sales

No2

6.

Giving personal recommendations on13Friendly Society tax-exempt policies (other than Holloway sickness policies where the Holloway policy special application conditions are met)5

Yes2

7.

Giving personal recommendations on long-term care insurance contracts13

Yes2

8.

Giving personal recommendations on investments13 in the course of corporate finance business

Yes2

9.

Advising on syndicate participation at Lloyd's

Yes2

129A.

Advising on P2P agreements

Yes

Undertaking the activity in column 2

10.

Broker fund adviser

Yes

11.

Pension transfer specialist

Yes2

Giving personal recommendations13 and dealing

12.

Giving personal recommendations on and dealing in securities13 which are not stakeholder pension schemes, personal pension schemes7 or broker funds

Yes

13.

Giving personal recommendations on and dealing in derivatives13

Yes2

4Dealing

13A.8

Securities which are not stakeholder pension schemes, personal pension schemes7 or broker funds

No

413B.8

Derivatives

No

15MiFID business bidding

13C15

emissions auction products15

No15
8 14

Managing

14.

Investments

Yes

Overseeing on a day-to-day basis

15.

Operating a collective investment scheme or undertaking the activities of a trustee or depositary of a collective investment scheme

Yes

16.

Safeguarding and administering investments or holding client money

Yes2

17.

Administrative functions in relation to managing investments

Yes2

18.

Administrative functions in relation to effecting or carrying out contracts of insurance which are life policies

Yes2

19.

Administrative functions in relation to the operation of stakeholder pension schemes

Yes2

Mortgage Activity10 and reversion activity carried on for a customer

10

910Advising; arranging (bringing about) an execution-only sale, excluding variations to an existing home finance transaction except where the effect is to change all or part of the home finance transaction from one interest rate to another.

See Note 3, which for the avoidance of doubt forms part of this rule.

20

Regulated mortgage contracts for a non-business purpose

Yes

20A

Regulated mortgage contracts for a business purpose

No

21

Equity release transactions

Yes

9Designing scripted questions for execution-only sales

21A

Regulated mortgage contracts for a non-business purpose

Yes

21B

Regulated mortgage contracts for a business purpose

No

22

Equity release transactions

Yes

Overseeing execution-only sales on a day-to-day basis9

9

23.

Equity release transactions

Yes

11MCD credit agreement activities carried on for consumers

11manufacturing

23A

an MCD credit agreement

No

11entering into a regulated mortgage contract or entering into a regulated credit agreement as lender

23B

an MCD credit agreement

No

11arranging (bringing about) regulated mortgage contracts or acting as an MCD credit broker

23C

an MCD credit agreement

No

11advising on a regulated mortgage contract or advising on a regulated credit agreement for the acquisition of land

23D

an MCD credit agreement

No

11directly managing or supervising employees who carry on any of the MCD credit agreement activities 23A to 23D

23E

an MCD credit agreement

No

[Note: article 9(1) of the MCD]11

Non-investment insurance business carried on for a consumer

Giving personal recommendations13

24.

Giving personal recommendations on non-investment insurance contracts13

No

3Regulated sale and rent back activity carried on for a customer

Advising

25.

Regulated sale and rent back agreements

No

Overseeing an execution-only sale10 on a day-to-day basis

10

26.

Regulated sale and rent back agreements

No

16Regulated funeral plan activity carried on for a customer

16Dealing in investments as agent

27

Funeral plan contracts

No

16Arranging (bringing about) deals in investments

28

Funeral plan contracts

No

16Making arrangements with a view to transactions in investments

29

Funeral plan contracts

No

16Managing investments

30

Funeral plan contracts

No

16Safeguarding and administering investments

31

Funeral plan contracts

No

16Sending dematerialised instructions

32

Funeral plan contracts

No

16Causing dematerialised instructions to be sent

33

Funeral plan contracts

No

16Advising on investments

34

Funeral plan contracts

No

16Entering as provider into a funeral plan contract

35

Funeral plan contracts

No

16Carrying out a funeral plan contract as provider

36

Funeral plan contracts

No

16Agreeing to carry on a regulated activity

37

Funeral plan contracts

No

Notes:

1.

In the Appendix the heading and types of business specified in the headings are to be read in conjunction with the paragraphs appearing beneath them.

2.

Thus, for example, paragraph 24,13 consistent with the heading above it, refers only to personal recommendations given in relation to13non-investment insurance contracts given to a consumer.10

33

122A.

In relation to activity number 9A, see TC 2.1.5HR and TC 2.1.6R(2). There is no qualification for this activity in the list of qualifications set out in TC Appendix 4E. However, the effect of TC 2.1.5HR is that an employeeadvising on P2P agreements must be qualified to the same standard as if that employee were providing investment advice to retail clients on retail investment products.

103.

For the purpose of product numbers 20, 20A and 21 the activity of arranging (bringing about) referred to in the activity column:

(a) includes activity which would be arranging (bringing about) but for the exclusion in article 28A of the Regulated Activities Order; and

(b) does not include activities which taken on their own would not fall within the definition of that activity. For these purposes no account should be taken of the fact that for an activity to be a regulated activity it must be carried on by way of business (see PERG 4.3).

4.

In this Appendix, paragraphs 23A, 23B, 23C, 23D and 23E relate to the implementation of article 9(1) of the MCD. The specified activities do not, in and of themselves, attract a qualification requirement. However, where those activities overlap with those specified under the heading "mortgage activity and reversion activity carried on for a customer", qualification requirements may apply.