Compound Growth Ltd 2016 -
CLIENT MONEY & ASSETS
RESOLUTION PACK: CASS RP
One of the key focus areas of the clients assets regime in the UK is the requirement to create and maintain a Client Money and Assets Resolution Pack, known as a CASS RP.
All firms that are subject to the CASS Custody Rules and/or the CASS Client Money Rules (Chapters 6 & 7 of the Client Assets Sourcebook), are required to gather specific information regarding the firms handling of safe custody assets and client money, which in the event of a firm’s failure, would be useful to an insolvency practitioner (IP).
The aim of this rule is to assist with the swift return of client money and safe custody assets compared to the previous rules that had been in place.
Those firms that are not strangers to holding client money will be very familiar with the CASS RP requirements, these having been in force since October 2012, however for those unfamiliar, the provisions for CASS RP can be found in Chapter 10 of the Client Assets Sourcebook.
The requirements for the Client Money & Assets Resolution Pack include, amongst others:
Given that much of this information will not remain static for long, it is to be expected that the contents of the CASS resolution pack will change from time to time. One such example is that daily reconciliations must be included within the pack, that obviously change daily. Since firms must ensure that it reviews the contents of the CASS RP on an ongoing basis, changes may occur frequently to maintain its accuracy.
MiFID II requires that investment firms holding financial instruments or funds belonging to clients make “adequate arrangements” to safeguard the rights of those clients and ESMA proposed for firms to hold basic information, consistent to IOSCOs Principal 1, relating to client money and client assets so that it “may be used as an audit trail” and readily accessed at short notice by authorities and insolvency practitioners.
These requirements, consistent with IOSCO’s Principle 1 of their Recommendations Regarding the Protection of Client Assets would obligate firms to hold:
Our Client Money support specialists have a wealth of regulatory knowledge and experience and can help your firm undertake a Client Money Health Check relevant to your business.
This may be of particular interest to those that are concerned that your Client Money & Client Assets Resolution Pack may be incomplete, missing core contents requirements and records or if you feel that the frequency of your CASS RP updates may be inadequate. If you would like to discuss any aspect of the CASS regime and how this affects your firm, please get in touch for a helpful and no obligation discussion.
Compound Growth can assist firms of all sizes to ensure they have the necessary procedures in place to remain compliant with the regulator’s rules pertaining to client money and client assets as set out in the CASS Sourcebook.
In particular we can support your firm in establishing suitable accounting systems as well as developing client money policies in line with industry best practice and the FCA’s guidance.