Related provisions for APER 4.2.11

CASS 11.7.1G01/04/2014

A CASS debt management firm owes a duty of care as a trustee to its clients in relation to client money and has to exercise that duty of care in deciding where to hold client money.

PRIN 2.1.1R31/07/2023

The Principles

1 Integrity	A firm must conduct its business with integrity.
2 Skill, care and diligence	A firm must conduct its business with due skill, care and diligence.
3 Management and control	A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.
4 Financial prudence	A firm must maintain adequate financial resources.
5 Market conduct	A firm must observe proper standards of market conduct.
6 Customers' interests	A firm must pay due regard to the interests of its customers and treat them fairly.
7 Communications with clients	A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading.
8 Conflicts of interest	A firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client.
9 Customers: relationships of trust	A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgment.
10 Clients' assets	A firm must arrange adequate protection for clients' assets when it is responsible for them.
11 Relations with regulators	A firm must deal with its regulators in an open and cooperative way, and must disclose to the FCA 1 appropriately anything relating to the firm of which that regulator would reasonably expect notice.
212 Consumer Duty	A firm must act to deliver good outcomes for retail customers.

SUP 3.1.1AG06/04/2007

9For the avoidance of doubt, this chapter does not apply to the following firms if they do not hold client money or client assets and do not appoint an auditor under or as a result of a statutory provision other than in the Act: (1) authorised professional firms;(2) energy market participants, including oil market participants to whom IPRU(INV) 3 does not apply;(3) exempt insurance intermediaries;(4) insurance intermediaries not subject to SUP 3.1.2 R(10);(5) investment management

SUP 3.1.2R01/08/2022

Applicable sections (see SUP 3.1.1 R)

This table and the provisions in SUP 3 should be read in conjunction with GEN 2.2.23 R to GEN 2.2.25 G. In particular, the PRA does not apply any of the provisions in SUP 3 in respect of FCA-authorised persons. SUP 3.10 and SUP 3.11 are applied by the FCA only.41

(1) Category of firm		(2) Sections applicable to the firm	(3) Sections applicable to its auditor
(1)	Authorised professional firm which is required by IPRU(INV) 2.1.2R to comply with chapters 3, 519 or 13 of IPRU(INV) and which has an auditor appointed under or as a result of a statutory provision other than in the Act 9 (Notes 1 and 6)23 23 19 23 23	SUP 3.1 - SUP 3.7, SUP 3.1123	SUP 3.1, SUP 3.2, SUP 3.8,19SUP 3.10 19
(2)	Authorised professional firm not within (1) to which the custody chapter or client money chapter applies22 17 22 23	SUP 3.1 - SUP 3.7, SUP 3.11	SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.10
(3)	Authorised professional firm not within (1) or (2) which has an auditor appointed under or as a result of a statutory provision other than in the Act	SUP 3.1, SUP 3.2, SUP 3.7	SUP 3.1, SUP 3.2, SUP 3.8
(4)	Bank, building society or dormant asset fund operator 40 which in each case carries on designated investment business 21(Notes 2A and 6)23 21 23	SUP 3.1-SUP 3.7, SUP 3.1123	SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.10
(5)	Bank, building society or a dormant asset fund operator 40 which in each case does not carry on designated investment business 21 (Note 2A) 21	SUP 3.1 - SUP 3.7	SUP 3.1, SUP 3.2, SUP 3.8
(5A)	Credit union	SUP 3.1 - SUP 3.7	SUP 3.1, SUP 3.2, SUP 3.824
27(5B)30	CASS debt management firm unless subject to a requirement imposed under section 55L of the Act stating that it must not hold client money or such a requirement to the same effect30	SUP 3.1 SUP 3.10 SUP 3.11	SUP 3.1 SUP 3.10
33(5C)	CASS 7 loan-based crowdfunding firm	SUP 3.1-3.7, SUP 3.11	SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.10
36(5D)	A CASS 13 claims management firm	SUP 3.1- 3.7, 3.11	SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.10
(6)	Insurer, the Society of Lloyd's, underwriting agent or members' adviser, UK ISPV 11 (Note 5)7	SUP 3.1 - SUP 3.7	SUP 3.1, SUP 3.2, SUP 3.8
(7)	Investment management firm,39 personal investment firm (other than a small personal investment firm)39, 15 securities and futures firm or collective portfolio management firm that is an external AIFM 28 which, in each case, has an auditor appointed under or as a result of a statutory provision other than in the Act 9(Notes 3 and 623)17 16 23 9 28 28 20 15 17 23	SUP 3.1 - SUP 3.7, SUP 3.1123	SUP 3.1, SUP 3.2, SUP 3.8,19SUP 3.10 19
9(7A)	Investment management firm 39, personal investment firm (other than a small personal investment firm 39),28 securities and futures firm 39 or collective portfolio management firm that is an external AIFM 28 not within (7) to which the custody chapter or client money chapter applies22 20 15 23 28 15 20 17 22	SUP 3.1 - SUP 3.7, SUP 3.1123	SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.1025
32 25
9(7B)	Collective portfolio management firm that is a 28 UCITS firm 13or an internally managed AIF 28 (Note 6)23 13	SUP 3.1 - SUP 3.7, SUP 3.1123	SUP 3.1, SUP 3.2, SUP 3.8,19SUP 3.10 19
13(7C)	MiFID investment firm 38, which has an auditor appointed under or as a result of a statutory provision other than in the Act (Notes 3B and 6)23 20 20 23	SUP 3.1 - 3.7, SUP 3.1123	SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.1014
17(7D)	Sole trader or partnership that is a MiFID investment firm 38 39(Notes 3C and 6)23 20 20 20 23	SUP 3.1 - SUP 3.7, SUP 3.1123	SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.10
(8)	Small personal investment firm or service company which, in either case, has an auditor appointed under or as a result of a statutory provision other than in the Act	SUP 3.1, SUP 3.2, SUP 3.7	SUP 3.1, SUP 3.2, SUP 3.8
(9)8	Home finance provider 10 which has an auditor appointed under or as a result of a statutory provision other than in the Act 9 10	SUP 3.1 - SUP 3.78	SUP 3.1, SUP 3.2, SUP 3.88
(10)8	Insurance intermediary (other than an exempt insurance intermediary) to which the insurance client money chapter 17 (except for CASS 5.2 (Holding money as agent)) applies (see Note 4)8 17	SUP 3.1 - SUP 3.78, SUP 3.1123	SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.108
(11)8	Exempt insurance intermediary and insurance intermediary not subject to SUP 3.1.2 R(10) which has an auditor appointed under or as a result of a statutory provision other than in the Act	SUP 3.1, SUP 3.2, SUP 3.78	SUP 3.1, SUP 3.2, SUP 3.88
(12)8	Home finance intermediary 10 or home finance administrator 10 which has an auditor appointed under or as a result of a statutory provision other than in the Act. 10 10	SUP 3.1, SUP 3.2, SUP 3.78	SUP 3.1, SUP 3.2, SUP 3.88
Note 1 = This chapter applies to an authorised professional firm in row (1) (and its auditor) as if the firm were of the relevant type in the right-hand column of IPRU(INV) 2.1.4R.
Note 2 [deleted]23 17 17 23
Note 2A = For this purpose, designated investment business does not include either or both: (a) dealing which falls within the exclusion in article 15 of the Regulated Activities Order (Absence of holding out etc) (or agreeing to do so); and (b) dealing in investments as principal (or agreeing to do so): (i) by a firm whose permission to deal in investments as principal is subject to a limitation to the effect that the firm, in carrying on this regulated activity, is limited to entering into transactions in a manner which, if the firm was an unauthorised person, would come within article 16 of the Regulated Activities Order (Dealing in contractually based investments); and (ii) in a manner which comes within that limitation; having regard to article 4(4) of the Regulated Activities Order (Specified activities: general23). 18
Note 3 = This note applies in relation to an oil market participant to which IPRU(INV) 3 does not apply and in relation to an energy market participant to which IPRU(INV) 3 does not apply. In SUP 3: (a) only SUP 3.1, SUP 3.2 and SUP 3.7 are applicable to such a firm; and (b) only SUP 3.1, SUP 3.2 and SUP 3.8 are applicable to its auditor; and, in each case, only if it has an auditor appointed under or as a result of a statutory provision other than in the Act.
17Note 3A [deleted]23 23
20Note 3B = MiFID investment firms 38 include firms that are eligible to be MiFID optional exemption firms but have chosen not to exercise the article 3 exemption. However, such firms may still benefit from the audit exemption for small companies in the Companies Act legislation39. 31
17Note 3C20 = A sole trader or a partnership that is a MiFID investment firm 38 to which the custody chapter 22 or client money chapter applies22 20 must have its annual accounts audited. 20 20 20 22 22
Note 4 = The client money audit requirement in SUP 3.1.2 R(10) therefore applies to all insurance intermediaries except:8 • those which do not hold client money or other client assets in relation to insurance distribution activities 34; or 8 • those which only hold up to, but not exceeding, £30,000 of client money under a statutory trust arising under CASS 5.3.8 Insurance intermediaries which, in relation to insurance distribution activities 34, hold no more than that amount of client money only on a statutory trust are exempt insurance intermediaries.8
Note (5) = In row (6):7
(a)7	SUP 3.1 - SUP 3.7 applies to a managing agent in respect of its own business and in respect of the insurance business of each syndicate which it manages; and7
(b)7	SUP 3.1, SUP 3.2 and SUP 3.8 apply to the auditors of a managing agent and the auditors of the insurance business of each syndicate which the managing agent manages.1 2 3 4 5 6 7
23Note 6 = Where SUP 3.11 applies to a firm, and SUP 3.10 applies to the auditor of that firm, those sections apply whether or not that firm's permission prevents it from holding client money or custody assets and whether or not it holds client money or custody assets.A collective portfolio management firm that is an internally managed AIF is required to appoint an auditor under FUND 3.3.6R (2) (Annual report of an AIF) because the AIFM is also an AIF.28

CASS 7.10.21G01/06/2015

Where a firm receives money that would otherwise be held as client money but for CASS 7.10.16 R:(1) it should be able to account to all of its clients for sums held for them at all times; and(2) that money should, pursuant to Principle 10, be allocated to the relevant client promptly. This should be done no later than ten business days after the firm has received the money.

CASS 7.10.41G01/06/2015

(1) Principle 10 (Clients' assets) requires a firm to arrange adequate protection for clients' assets when the firm is responsible for them. An essential part of that protection is the proper accounting and treatment of client money. The client money rules provide requirements for firms that receive or hold client money, in whatever form.(2) The client money rules also, where relevant, implement the provisions of MiFID which regulate the obligations of a firm when it holds client

CASS 10.3.1R22/01/2018

A firm must include, as applicable, within its CASS resolution pack the records required under:(1) CASS 6.3.2A R1 (safe custody assets: appropriateness of the firm’s selection of a third party);1(1A) CASS 6.3.6AR (third party rights over client assets);3(2) CASS 6.4.3 R (firm’s use of safe custody assets);(3) CASS 6.6.2 R and CASS 6.6.3 R (safe custody assets held for each client);11(4) CASS 6.6.6 R1 (client agreements: firm’s right to use);1(4A) CASS 6.6.8 R (internal custody

CONC 1.1.4G01/04/2014

The Principles for Businesses (PRIN) apply as a whole to firms with respect to credit-related regulated activities and ancillary activities in relation to credit-related regulated activities (see PRIN 3). In carrying on their activities, firms should pay particular attention to their obligations under: (1) Principle 1 (a firm must conduct its business with integrity);(2) Principle 2 (a firm must conduct its business with due skill, care and diligence);(3) Principle 3 (a firm must

SUP 5.6.4G01/04/2013

2A firm may provide information that would otherwise be subject to a contractual or other requirement to keep it in confidence if it is provided for the purposes of anything required to be done in respect of the skilled person's collection or updating of information under section 166A (Appointment of skilled person to collect and update information) of the Act.

COBS 16.4.2R03/01/2018

A firm must include the following information4 in a statement of client assets referred to under this section4: (1) details of all the designated investments or client money held by the firm for the client at the end of the period covered by the statement;(2) the extent to which any clientdesignated investments or client money have been the subject of securities financing transactions; and(3) the extent of any benefit that has accrued to the client by virtue of participation in

CASS 1A.2.13G01/04/2013

4Any written notification made to the FCA under this chapter should be marked for the attention of: "Client Assets Firm Classification".

CASS 8.1.2BG01/01/2013

(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

EG 13.13.301/03/2016

1The FCA is given power to receive the same information as creditors are entitled to receive in the winding up, administration, receivership or voluntary arrangement of an authorised person, of appointed representatives and of persons who have carried out a regulated activity while unauthorised. The FCA is also entitled to attend and make representation at any creditors' meeting or (where relevant) creditors' committee meeting taking place in those regimes. When it decides whether

PRIN 3.3.1R31/07/2023

Territorial application of the Principles

Principle	Territorial application
Principles1, 2 and 3	in a prudential context, apply with respect to activities wherever they are carried on; otherwise, apply with respect to activities carried on from an establishment maintained by the firm (or its appointed representative) in the United Kingdom, or in respect of regulated claims management activities, apply with respect to activity carried on in Great Britain, even if the establishment from which it is carried on is not located in the UK (see PERG 2.4A),6 unless another applicable rule or onshored regulation 7 which is relevant to the activity has a wider territorial scope, in which case the Principle applies with that wider scope in relation to the activity described in that rule or onshored regulation 7. 5 5
Principle 4	applies with respect to activities wherever they are carried on.
Principle5	if the activities have, or might reasonably be regarded as likely to have, a negative effect on confidence in the UK financial system 4, applies with respect to activities wherever they are carried on; otherwise, applies with respect to activities carried on from an establishment maintained by the firm (or its appointed representative) in the United Kingdom, or in respect of regulated claims management activities, applies with respect to activity carried on in Great Britain, even if the establishment from which it is carried on is not located in the UK (see PERG 2.4A)6. 4
Principles 6, 7, 8, 9 and 10	Principle 8, in a prudential context, applies with respect to activities wherever they are carried on; otherwise these Principles 11 apply with respect to activities carried on from an establishment maintained by the firm (or its appointed representative) in the United Kingdom, or in respect of regulated claims management activities, apply with respect to activity carried on in Great Britain, even if the establishment from which it is carried on is not located in the UK (see PERG 2.4A),6 unless another applicable rule or onshored regulation 7 which is relevant to the activity has a wider territorial scope, in which case the Principle applies with that wider scope in relation to the activity described in that rule or onshored regulation 7. 5 5
Principle11	applies with respect to activities wherever they are carried on.2
11 Principle 12 and PRIN 2A	apply with respect to activities carried on with retail customers located in the United Kingdom unless another applicable rule or onshored regulation which is relevant to the activity has a different territorial scope, in which case Principle 12 and PRIN 2A apply with that scope in relation to the activity described in that rule or onshored legislation.

PRIN 1.2.1G31/07/2023

Principles 6 (Customers' interests), 7 (Communications with clients), 8 (Conflicts of interest), 9 (Customers: relationships of trust), 10 (Clients’ assets) and 12 (Consumer Duty)13 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"

EG 8.2.601/03/2016

1Examples of circumstances in which the FCA will consider varying a firm'sPart 4A permission because it has serious concerns about a firm, or about the way its business is being or has been conducted include where: (1) in relation to the grounds for exercising the power under section 55J(1)(a) or section 55L(2)(a) of the Act, the firm appears to be failing, or appears likely to fail, to satisfy the threshold conditions relating to one or more, or all, of its regulated activities,

SYSC 14.1.28G31/12/2006

The precise role and organisation of internal controls can vary from firm to firm. However, a firm'sinternal controls should normally be concerned with assisting its governing body and relevant senior managers to participate in ensuring that it meets the following objectives:(1) safeguarding both the assets of the firm and its customers, as well as identifying and managing liabilities;(2) maintaining the efficiency and effectiveness of its operations;(3) ensuring the reliability

MIPRU 3.2.10R01/01/2007

In this chapter, "client assets" includes a document only if it has value, or is capable of having value, in itself (such as a bearer instrument).

CASS 11.11.30R01/04/2014

A CASS debt management firm must inform the FCA in writing without delay if:(1) its internal records and accounts of client money are materially out of date or materially inaccurate so that the firm is no longer able to comply with the requirements in CASS 11.11.1 R to CASS 11.11.4 R; or(2) it becomes aware that, at any time in the preceding 12 months, the amount of client money segregated in its client bank accounts materially differed from the total aggregate amount of client

SUP 3.10.4R01/04/2013

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.

Related provisions for APER 4.2.11

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