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Recording title to safe custody assets - CASS Provision: Difference between revisions
Recording title to safe custody assets - CASS Provision (view source)
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[[PS14/9]] on the general vibe of this new rule: | [[PS14/9]] on the general vibe of this new rule: | ||
:“where a {{fcaprov|firm}} is acting for a proprietary purpose, it should be registering its proprietary assets in a separate name to the name in which it registers any custody assets it holds for a {{fcaprov|client}}.” | :“where a {{fcaprov|firm}} is acting for a proprietary purpose, it should be registering its proprietary assets in a separate name to the name in which it registers any custody assets it holds for a {{fcaprov|client}}.” | ||
:“We are introducing this general restriction for two reasons. The first reason is to reduce the risk of custody assets being misappropriated, or client’s rights in those assets being lost or diminished. [...] allowing a firm to register or record legal title to its own {{cassprov|applicable assets}} and {{cassprov|custody assets}} under the same nominee name poses risks to those client assets – for example, an increased risk that the client’s assets may not be separately identifiable from the firm’s own assets, thereby delaying the return of custody assets and reducing client protection. The second reason is to increase the likelihood that the firm or an IP would be able to transfer client assets promptly before or after the failure of a firm to another entity.” | |||
“We are introducing this general restriction for two reasons. The first reason is to reduce the risk of custody assets being misappropriated, or client’s rights in those assets being lost or diminished. [...] allowing a firm to register or record legal title to its own {{cassprov|applicable assets}} and {{cassprov|custody assets}} under the same nominee name poses risks to those client assets – for example, an increased risk that the client’s assets may not be separately identifiable from the firm’s own assets, thereby delaying the return of custody assets and reducing client protection. The second reason is to increase the likelihood that the firm or an IP would be able to transfer client assets promptly before or after the failure of a firm to another entity.” | |||
===Incidental to {{fcaprov|designated investment business}}=== | ===Incidental to {{fcaprov|designated investment business}}=== | ||
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:“First, where doing so arises incidentally to the investment business the firm carries on for the account of a client or to other steps taken by the firm to comply with the custody rules. We are also providing guidance to indicate that each of the situations discussed below are likely examples of where these conditions would be met.” | :“First, where doing so arises incidentally to the investment business the firm carries on for the account of a client or to other steps taken by the firm to comply with the custody rules. We are also providing guidance to indicate that each of the situations discussed below are likely examples of where these conditions would be met.” | ||
:“There are a number of situations in which a firm may need to hold its own assets in the same name as the custody assets belonging to clients to facilitate, or | :“There are a number of situations in which a firm may need to hold its own assets in the same name as the custody assets belonging to clients to facilitate, or as a result of, a transaction for a client, such as: | ||
as a result of, a transaction for a client, such as: | |||
:*correcting dealing or transaction errors that relate to client positions [...] to reverse the transaction [[and/or]] correct the error); | :*correcting dealing or transaction errors that relate to client positions [...] to reverse the transaction [[and/or]] correct the error); | ||
:*processing or allocating assets for bulk deals (e.g. as a rounding mechanism when offering aggregated dealing services); | :*processing or allocating assets for bulk deals (e.g. as a rounding mechanism when offering aggregated dealing services); | ||