Related provisions for CASS 5.5.27

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CASS 5.5.4RRP
If a firm is liable to pay money to a client, it must as soon as possible, and no later than one business day after the money is due and payable:(1) pay it into a client bank account, in accordance with CASS 5.5.5 R; or(2) pay it to, or to the order of, the client.
CASS 5.5.5RRP
A firm must segregate client money by either:(1) paying it as soon as is practicable into a client bank account; or(2) paying it out in accordance with CASS 5.5.80 R.
CASS 5.5.6GRP
The FSA expects that in most circumstances it will be practicable for a firm to pay client money into a client bank account by not later than the next business day after receipt.
CASS 5.5.7GRP
Where an insurance transaction involves more than one firm acting in a chain such that for example money is transferred from a "producing" broker who has received client money from a retail customer to an intermediate broker and thereafter to an insurance undertaking, each broker firm will owe obligations to its immediate client to segregate client money which it receives (in this example the producing broker in relation to the retail customer and the intermediate broker in relation
CASS 5.5.8RRP
A firm may segregate client money in a different currency from that of receipt. If it does so, the firm must ensure that the amount held is adjusted at intervals of not more than twenty five business days to an amount at least equal to the original currency amount (or the currency in which the firm has its liability to its clients, if different), translated at the previous day's closing spot exchange rate.
CASS 5.5.9RRP
A firm must not hold money other than client money in a client bank account unless it is:(1) a minimum sum required to open the account, or to keep it open; or(2) money temporarily in the account in accordance with CASS 5.5.16 R (Withdrawal of commission and mixed remittance); or(3) interest credited to the account which exceeds the amount due to clients as interest and has not yet been withdrawn by the firm.
CASS 5.5.10RRP
If it is prudent to do so to ensure that client money is protected (and provided that doing so would otherwise be in accordance with CASS 5.5.63 R (1)(b)(ii)),2 a firm may pay into, or maintain in, a client bank account money of its own, and that money will then become client money for the purposes of CASS 5 and the client money (insurance) distribution rules.
CASS 5.5.11RRP
A firm, when acting in accordance with CASS 5.3 (statutory trust), must ensure that the total amount of client money held for each client in any of the firm'sclient moneybankaccounts is positive and that no payment is made from any such account for the benefit of a client unless the client has provided the firm with cleared funds to enable the payment to be made.
CASS 5.5.11AGRP
2When a firm acts in accordance with CASS 5.3 (Statutory trust) it should not make a payment from the client bank account unless it is satisfied on reasonable grounds that the client has provided it with cleared funds. Accordingly, a firm should normally allow a reasonable period of time for cheques to clear. If a withdrawal is made and the client's cheque is subsequently dishonoured it will be the firm's responsibility to make good the shortfall in the account as quickly as possible
CASS 5.5.12RRP
If client money is received by the firm in the form of an automated transfer, the firm must take reasonable steps to ensure that:(1) the money is received directly into a client bank account; and(2) if money is received directly into the firm's own account, the money is transferred into a client bank account no later than the next business day after receipt.
CASS 5.5.13GRP
A firm can hold client money in either a general client bank account (CASS 5.5.38 R) or a designated client bank account (CASS 5.5.39 R). A firm holds all client money in general client bank accounts for its clients as part of a common pool of money so those particular clients do not have a claim against a specific sum in a specific account; they only have a claim to the client money in general. A firm holds client money in designated client bank accounts for those clients who requested
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 5.5.16RRP
(1) A firm may draw down commission from the client bank account if:(a) it has received the premium from the client (or from a third party premium finance provider on the client's behalf);2 and(b) this is consistent with the firm'sterms of business which it maintains with the relevant client and 2the insurance undertaking to whom the premium will become2 payable;and the firm may draw down commission before payment of the premium to the insurance undertaking, provided that the conditions
CASS 5.5.17GRP
(1) As soon as commission becomes due to the firm (in accordance with CASS 5.5.16 R (1)) it must be treated as a remittance which must be withdrawn in accordance with CASS 5.5.16 R (2). 2The procedure required by CASS 5.5.16 R will also 2apply where moneyis 2due and payable 2to the firm in respect of fees due from clients (whether to the firm or other professionals).(2) Firms are reminded that money received in accordance with CASS 5.2 must not, except where a firm and an insurance
CASS 5.5.18RRP
(1) Subject to (4), a 2firm must in relation to each of its appointed representatives, field representatives and other agents comply with CASS 5.5.19 R to CASS 5.5.21 R (Immediate segregation) or with CASS 5.5.23 R (Periodic segregation and reconciliation).(2) A firm must in relation to each representative or other agent keep a record of whether it is complying with CASS 5.5.19 R to CASS 5.5.21 R or with CASS 5.5.23 R.(3) A firm is, but without affecting the application of CASS
CASS 5.5.23RRP
(1) A firm must, on a regular basis, and at reasonable intervals, ensure that it holds in its client bank account an amount which (in addition to any other amount which it is required by these rules to hold) is not less than the amount which it reasonably estimates to be the aggregate of the amounts held at any time by its appointed representatives, field representatives, and other agents.(2) A firm must, not later than ten business days following the expiry of each period in
CASS 5.5.24GRP
(1) CASS 5.5.23 R allows a firm with appointed representatives, field representatives and other agents to avoid the need for the representative to forward client money on a daily basis but instead requires a firm to segregate into its client money bank account amounts which it reasonably estimates to be sufficient to cover the amount of client money which the firm expects its representatives or agents to receive and hold over a given period. At the expiry of each such period, the
CASS 5.5.26RRP
A firm must take reasonable steps to ensure that it is notified promptly of any receipt of client money in the form of client entitlements.
CASS 5.5.28RRP
When a firm receives a client entitlement on behalf of a client, it must pay any part of it which is client money:(1) for client entitlements received in the United Kingdom, into a client bank account in accordance with CASS 5.5.5 R; or(2) for client entitlements received outside the United Kingdom, into any bank account operated by the firm, provided that such client money is:(a) paid to, or in accordance with, the instructions of the client concerned; or(b) paid into a client
CASS 5.5.29RRP
A firm must take reasonable steps to ensure that a client entitlement which is client money is allocated within a reasonable period of time after notification of receipt.
CASS 5.5.30RRP
(1) In relation to retail customers, a firm must, subject to (2), take reasonable steps to ensure that its terms of business or other client agreements 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.(2) In respect of interest earned on client bank accounts, (1) does not apply if a firm has reasonable
CASS 5.5.33GRP
CASS 5.5.34 R sets out the requirements a firm must comply with when it transfers client money to another person without discharging its fiduciary duty owed to that client. Such circumstances arise when, for example, a firm passes client money to another broker for the purposes of the client's transaction being effected. A firm can only discharge itself from its fiduciary duty by acting in accordance with, and in the circumstances permitted by, CASS 5.5.80 R.
CASS 5.5.40GRP
(1) A firm may operate as many client accounts as it wishes.(2) A firm is not obliged to offer its clients the facility of a designated client bank account.(3) Where a firm holds money in a designated client bank account, the effect upon either:(a) the failure of a bank where any other client bank account is held; or(b) the failure of a third party to whom money has been transferred out of any other client bank account in accordance with CASS 5.5.34 R;(each of which is a secondary
CASS 5.5.41RRP
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
CASS 5.5.42GRP
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
CASS 5.5.46GRP
A firm will be expected to perform due diligence when opening a client bank account with a bank that is authorised by an EEA regulator. Any continuing assessment of that bank may be restricted to verification that it remains authorised by an EEA regulator.
CASS 5.5.47RRP
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,
CASS 5.5.48RRP
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.
CASS 5.5.51RRP
In the case of a client bank account outside 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 notify the client of this fact as set out in CASS 5.5.53 R.
CASS 5.5.53RRP
A firm must not hold, for a retail customer, client money in a client bank account outside the United Kingdom, unless the firm has previously disclosed to the retail customer (whether in its terms of business, client agreement or otherwise in writing):(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,
CASS 5.5.56RRP
If a client has notified a firm in writing before entering into a transaction that client money is not to be held in a particular jurisdiction, the firm must either:(1) hold the client money in a client bank account in a jurisdiction to which the client has not objected; or(2) return the client money to, or to the order of, the client.
CASS 5.5.58RRP
A firm must not undertake any transaction for a retail customer that involves client money being passed to another broker or settlement agent located in a jurisdiction outside the United Kingdom, unless the firm has previously disclosed to the retail customer (whether in its terms of business, client agreement or otherwise in writing):(1) that his client money may be passed to a person outside the United Kingdom but the client may notify the firm that he does not wish his money
CASS 5.5.60RRP
If a client has notified a firm before entering into a transaction that he does not wish his money to be passed to another broker or settlement agent located in a particular jurisdiction, the firm must either:(1) hold the client money in a client bank account in the United Kingdom or a jurisdiction to which the money has not objected and pay its own money to the firm's own account with the broker, agent or counterparty; or(2) return the money to, or to the order of, the clien
CASS 5.5.62GRP
(1) In order that a firm may check that it has sufficient money segregated in its client bank account (and held by third parties) to meet its obligations to clients it is required periodically to calculate the amount which should be segregated (the client money requirement) and to compare this with the amount shown as its client money resource. This calculation is, in the first instance, based upon the firm's accounting records and is followed by a reconciliation with its banking
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 5.5.66RRP
A firm'sclient money (client balance) requirement is the sum of, for all clients, the individual client balances calculated in accordance with CASS 5.5.67 R but excluding any individual balances which are negative (that is, uncleared client funds).
CASS 5.5.67RRP
The individual client balance for each client must be calculated as follows:(1) the amount paid by a client to the firm (to include all premiums); plus(2) the amount due to the client (to include all claims and premium refunds); plus(3) the amount of any interest or investment returns due to the client;(4) less the amount paid to insurance undertakings for the benefit of the client (to include all premiums and commission due to itself) (i.e. commissions that are due but have not
CASS 5.5.68RRP
A firm's client money (accruals) requirement is the sum of the following:(1) all insurance creditors shown in the firm's business ledgers as amounts due to insurance undertakings, clients and other persons; plus(2) unearned commission 2being the amount of commission 2shown as accrued (but not shown as due 2and payable) as at the date of the calculation (a prudent estimate must be used if the firm is unable to produce an exact figure at the date of the calculation).
CASS 5.5.69RRP
A firm which calculates its client money requirement on the preceding basis must in addition and within a reasonable period be able to match its client money resource to its requirement by reference to individual clients (with such matching being achieved for the majority of its clients and transactions).
CASS 5.5.79GRP
The purpose of CASS 5.5.80 R to CASS 5.5.83 R is to set out those situations in which a firm will have fulfilled its contractual and fiduciary obligations in relation to any client money held for or on behalf of its client, in relation to the firm's ability to require repayment of that money.
CASS 5.5.80RRP
Money ceases to be client money if it is paid:(1) to the client, or a duly authorised representative of the client; or(2) to a third party on the instruction of or with the specific consent of the client, but not if it is transferred to a third party in the course of effecting a transaction, in accordance with CASS 5.5.34 R; or(3) into a bank account of the client (not being an account which is also in the name of the firm); or(4) to the firm itself, when it is due and payable
CASS 5.5.81GRP
(1) A firm which pays professional fees (for example to a loss adjuster or valuer) on behalf of a client may do so in accordance with CASS 5.5.80 R (2) where this is done on the instruction of or with the consent of the client.(2) When a firm wishes to transfer client money balances to a third party in the course of transferring its business to another firm, it should do so in compliance with CASS 5.5.80 R and a transferee firm will come under an obligation to treat any client
CASS 5.5.83RRP
For the purposes of CASS 5.1.5 R, if a firm makes a payment to, or on the instructions of, a client, from an account other than a client bank account, until that payment has cleared, no equivalent sum will become due and payable to the firm or may be withdrawn from a client bank account by way of reimbursement.
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 5.6.8GRP
A client's main claim is for the return of client money held in a client bank account. A client may claim for any shortfall against money held in a firm's own account. For that claim, the client will be an unsecured creditor of the firm.
CASS 5.6.9RRP
Client money received by the firm (including in its capacity as trustee under CASS 5.4 (Non-statutory trust)) after a primary pooling event must not be pooled with client money held in any client money account operated by the firm at the time of the primary pooling event. It must be placed in a client bank account that has been opened after that event and must be handled in accordance with the client money rules, and returned to the relevant client without delay, except to the
CASS 5.6.15RRP
CASS 5.6.20 R to CASS 5.6.31 R do not apply if, on the failure of the third party, the firm repays to its clients or pays into a client bank account, at an unaffected bank, an amount equal to the amount of client money which would have been held if a shortfall had not occurred at that third party.
CASS 5.6.16GRP
When client money is transferred to a third party, a firm continues to owe a fiduciary duty to the client. However, consistent with a fiduciary's responsibility (whether as agent or trustee) for third parties under general law, a firm will not be held responsible for a shortfall in client money caused by a third party failure if it has complied with those duties.
CASS 5.6.19GRP
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.
CASS 5.6.22RRP
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,
CASS 5.6.24RRP
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
CASS 5.6.25RRP
A client whose money was held, or which should have been held, in a designated client bank account with a bank that has failed is not entitled to claim in respect of that money against any other client bank account or client transaction account of the firm.
CASS 5.6.26RRP
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
CASS 5.6.30RRP
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, 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, to reflect
CASS 5.6.31RRP
Client money received by the firm after the failure of another broker or settlement agent, to whom the firm has transferred client money that would otherwise have been paid into a client bank account at that broker or settlement agent:(1) must not be transferred to the failed thirty party unless specifically instructed by the client in order to settle an obligation of that client to the failed broker or settlement agent; and(2) must be, subject to (1), placed in a separate client bank
CASS 5.1.1RRP
(1) CASS 5.1 to CASS 5.6 apply, subject to (2), (3) and CASS 5.1.3 R to CASS 5.1.6 R, to a firm that receives or holds money in the course of or in connection with its insurance mediation activity.(2) CASS 5.1 to CASS 5.6 do not, subject to (3), apply:(a) to a firm to the extent that it acts in accordance with the CASS 4; or(b) to a firm in carrying on an insurance mediation activity which is in respect of a reinsurance contract; or(c) to an insurance undertaking in respect of
CASS 5.1.2GRP
A firm that is an approved bank, and relies on the exemption under CASS 5.1.1 R (2)(e), should be able to account to all of its clients for amounts held on their behalf at all times. A bank account opened with the firm that is in the name of the client would generally be sufficient. When money from clients deposited with the firm is held in a pooled account, this account should be clearly identified as an account for clients. The firm should also be able to demonstrate that an
CASS 5.1.4ARRP
(1) 3A firm will, subject to (3), be deemed to comply with CASS 5.3 to CASS 5.6 if it receives or holds client money and it either:2(a) in relation to a service charge, complies with the requirement to segregate such money in accordance with section 42 of the Landlord and Tenant Act 1987 ("the 1987 Act"); or2(b) in relation to money which is clients' money for the purpose of the Royal Institution of Chartered Surveyors' Rules of Conduct ("RICS rules") in force as at 14 January
CASS 5.1.5RRP
Subject to CASS 5.1.5A Rmoney is not client money when:3(1) it becomes properly due and payable to the firm:(a) for its own account; or(b) in its capacity as agent of an insurance undertaking where the firm acts in accordance with CASS 5.2; or(2) it is otherwise received by the firm pursuant to an arrangement made between an insurance undertaking and another person (other than a firm) by which that other person has authority to underwrite risks, settle claims or handle refunds
CASS 5.1.5ARRP
3CASS 5.1.5 R (1)(b) and CASS 5.1.5 R (2) do not apply, and hence money is client money, in any case where:(1) in relation to an activity specified in CASS 5.2.3 R (1) (a) to CASS 5.2.3 R (1) (c), the insurance undertaking has agreed that the firm may treat money which it receives and holds as agent of the undertaking, as client money and in accordance with the provisions of CASS 5.3 to CASS 5.6; and(2) the agreement in (1) is in writing and adequate to show that the insurance
CASS 5.1.6RRP
Except where a firm and an insurance undertaking have (in accordance with CASS 5.1.5A R) agreed otherwise, for the purposes of 3CASS 5.1 to CASS 5.6 an insurance undertaking (when acting as such) with whom a firm conducts insurance mediation activity is not to be treated as a client of the firm.
CASS 5.1.7GRP
(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 handling of client money. The rules in CASS 5.1 to CASS 5.6 also give effect to the requirement in article 4.4 of the IMD that all necessary measures should be taken to protect clients against the inability of an insurance intermediary to transfer premiums to an insurance
CASS 5.2.1GRP
If a firm holds money as agent of an insurance undertaking then the firm'sclients (who are not insurance undertakings) will be adequately protected to the extent that the premiums which it receives are treated as being received by the insurance undertaking when they are received by the agent and claims money and premium refunds will only be treated as received by the client when they are actually paid over. The rules in CASS 5.2 make provision for agency agreements between firms
CASS 5.2.3RRP
(1) A firm must not agree to:(a) deal in investments as agent for an insurance undertaking in connection with insurance mediation; or(b) act as agent for an insurance undertaking for the purpose of settling claims or handling premium refunds; or(c) otherwise receive money as agent of an insurance undertaking;unless:(d) it has entered into a written agreement with the insurance undertaking to that effect; and(e) it is satisfied on reasonable grounds that the terms of the policies
CASS 5.2.4GRP
Firms are reminded that CASS 5.1.5A R1 provides that, if the insurance undertaking has agreed in writing, 1money held in accordance with an agreement made under CASS 5.2.3 R may be treated as 1client money and may (but not otherwise) 1be kept in a client bank account.
CASS 5.2.5GRP
A firm which provides for the protection of a client(which is not an insurance undertaking) 1under CASS 5.2 is relieved of the obligation to provide protection for that client under CASS 5.3 or CASS 5.4 to the extent of the items of client 1money protected by the agency agreement.
CASS 5.2.7GRP
A firm may operate on the basis of an agency agreement as provided for by CASS 5.2.3 R for some of its clients and with protection provided by a client money trust in accordance with CASS 5.3 or CASS 5.4 for other clients. A firm may also operate on either basis for the same client but in relation to different transactions. A firm which does so should be satisfied that its administrative systems and controls are adequate and, in accordance with CASS 5.2.4 G, should ensure that
CASS 5.8.1RRP
(1) CASS 5.8 applies to a firm (including in its capacity as trustee under CASS 5.4) which in the course of insurance mediation activity takes into its possession for safekeeping any client title documents (other than documents of no value) or other tangible assets belonging to clients.(2) CASS 5.8 does not apply to a firm when: (a) carrying on an insurance mediation activity which is in respect of a reinsurance contract; or(b) acting in accordance with CASS 2 (Custody rules)
CASS 5.8.2GRP
The rules in this section amplify the obligation in Principle 10 which requires a firm to arrange adequate protection for client's assets. Firms carrying on insurance mediation activities may hold, on a temporary or longer basis, client title documents such as policy documents (other than policy documents of no value) and also items of physical property if, for example, a firm arranges for a valuation. The rules are intended to ensure that firms make adequate arrangements for
CASS 5.8.3RRP
(1) A firm which has in its possession or control documents evidencing a client's title to a contract of insurance or other similar documents (other than documents of no value) or which takes into its possession or control tangible assets belonging to a client, must take reasonable steps to ensure that any such documents or items of property:(a) are kept safe until they are delivered to the client;(b) are not delivered or given to any other person except in accordance with instructions
CASS 5.3.1GRP
Section 139(1) of the Act (Miscellaneous ancillary matters) provides that rules may make provision which results in client money being held by a firm on trust (England and Wales and Northern Ireland) or as agent (Scotland only). CASS 5.3.2 R creates a fiduciary relationship between the firm and its client under which client money is in the legal ownership of the firm but remains in the beneficial ownership of the client. In the event of failure of the firm, costs relating to the
CASS 5.3.2RRP
A firm (other than a firm acting in accordance with CASS 5.4) receives and holds client money as trustee (or in Scotland as agent) on the following terms:(1) for the purposes of and on the terms of CASS 5.3, CASS 5.5 and the client money (insurance) distribution rules;(2) subject to (4),1 for the clients (other than clients which are insurance undertakings when acting as such)1 for whom that money is held, according to their respective interests in it;(3) after all valid claims
CASS 5.3.3GRP
(1) A firm which holds client money can discharge its obligation to ensure adequate protection for its clients in respect of such money by complying with CASS 5.3 which provides for such money to be held by the firm on the terms of a trust imposed by the rules.(2) The trust imposed by CASS 5.3 is limited to a trust in respect of client money which a firm receives and holds. The consequential and supplementary requirements in CASS 5.5 are designed to secure the proper segregation
CASS 5.4.1GRP
(1) CASS 5.4 permits a firm, which has adequate resources, systems and controls, to declare a trust on terms which expressly authorise it, in its capacity as trustee, to make advances of credit to the firm'sclients. The client money trust required by CASS 5.4 extends to such debt obligations which will arise if the firm, as trustee, makes credit advances, to enable a client's premium obligations to be met before the premium is remitted to the firm and similarly if it allows claims
CASS 5.4.4RRP
A firm may not handle client money in accordance with the rules in this section unless each of the following conditions is satisfied:(1) the firm must have and maintain systems and controls which are adequate to ensure that the firm is able to monitor and manage its client money transactions and any credit risk arising from the operation of the trust arrangement and, if in accordance with CASS 5.4.2 R a firm complies with both the rules in CASS 5.3 and CASS 5.4, such systems and
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
CASS 5.4.8RRP
The deed (or equivalent formal document) referred to in CASS 5.4.6 R may provide that:(1) the firm, acting as trustee (or, in Scotland, as agent), has power to make advances or give credit to clients or insurance undertakings from client money, provided that it also provides that any debt or other obligation of a client or resulting obligation of an insurance undertaking, in relation to an advance or credit, is held on the same terms as CASS 5.4.7 R;(2) the benefit of a letter
CASS 1.4.2GRP
CASS 2 (Custody rules) to CASS 4 (Client money and mandates: designated investment business) apply in respect of any stock lending activity undertaken with or for a customer by a firm.
CASS 1.4.7RRP
The remainder of CASS applies to a depositary, when acting as such, with the following general modifications:(1) except in CASS 4.5, 'client' means 'trustee', 'trust' or 'collective investment scheme' as appropriate; and(2) in CASS 4.5, 'client' means 'trustee' 'collective investment scheme' or 'collective investment scheme instrument' as appropriate.
CASS 3.1.1RRP
This section applies to a firm when it receives or holds assets in connection with an arrangement to secure the obligation of a client in the course of, or in connection with, its designated investment business.
CASS 3.1.4GRP
For the purpose of this section only, a bare security interest in the client's asset gives a firm the right to realise the assets only on a client's default and without the right to use other than in default.
CASS 3.1.7GRP
This section recognises the need to apply a differing level of regulatory protection to the assets which form the basis of the two different types of arrangement described in CASS 3.1.5 G. Under the bare security interest arrangement, the asset continues to belong to the client until the firm's right to realise that asset crystallises (that is, on the client's default). But under a "right to use arrangement", the client has transferred to the firm the legal title and associated
CASS 1.2.7GRP
(1) The approach in CASS is to ensure that the rules in a chapter are applied to firms in respect of particular regulated activities or unregulated activities.(2) The scope of the regulated activities to which CASS applies is determined by the description of the activity as it is set out in the Regulated Activities Order. Accordingly, a firm will not generally be subject to CASS in relation to any aspect of its business activities which fall within an exclusion found in the Regulated
CASS 1.2.8GRP
(1) CASS applies directly in respect of activities conducted with or for market counterparties as well as with or for customers. The term client refers both to market counterparties and to customers.(2) In CASS 2 (Custody rules), CASS 3 (Collateral rules) and CASS 4 (Client money and mandates: designated investment business), the term customer refers toprivate customers and intermediate customers, but not market counterparties. Where relevant, each of the provisions of CASS makes
PRIN 1.2.1GRP
Principles 6 (Customers' interests), 7 (Communications with clients), 8 (Conflicts of interest), 9 (Customers: relationships of trust) and 10 (Clients' assets) impose requirements on firms expressly in relation to their clients or customers. These requirements depend, in part, on the characteristics of the client or customer concerned. This is because what is "due regard" (in Principles 6 and 7), "fairly" (in Principles 6 and 8), "clear, fair and not misleading" (in Principle
PRIN 1.2.6GRP
If the person with or for whom the firm is carrying on an activity is acting through an agent, the ability of the firm to treat the agent as its client under COB 4.1.5 R (Agent as client) will not be available. For example, if a general insurer is effecting a general insurance contract through a general insurance broker who is acting as agent for a disclosed policyholder, the policyholder will be a client of the firm and the firm must comply with the Principles accordingly.
DISP 2.3.1AGRP
1If the complaint relates to the sale of an endowment policy for the purpose of achieving capital repayment of a mortgage, the receipt by the complainant of a letter which states that there is a risk (rather than a high risk) that the policy would not, at maturity, produce a sum large enough to repay the target amount is not, itself, sufficient to cause the three year time period in DISP 2.3.1 R (1)(c) to start to run.