7.11.14 - CASS Provision
Discussion
A rule introduced in December 2014 because the FCA was concerned: • lack of clarity and somewhat creative looseness as to what a "commercial settlement system" is in practice, as it was not defined. Reaction: define it:
- "a system commercially available to firms that are members or participants, a purpose of which is to facilitate the
settlement of transactions using money and/or assets held on one or more settlement accounts". • lack of clarity as to when the DvP window actually starts, so it was "stretched" beyond what was intended - in some cases for months.
the amended rules provide that:
- in respect of a client's purchase the DvP window starts from the date of the client's fulfillment of its payment obligation to the firm (provided the firm intends for the asset in question to be due to the client within one business day following fulfillment) and closes when the transaction settles (or, failing that on the third business day following fulfillment);
- in respect of a client's sale, the DvP window starts from the date of fulfillment of dlievery and closes when the transaction settles (or, failing that on the third business day following fulfillment);
Banking Exemption
If your institution counts as an approved bank consider whether this amounts to a whole hill of beans anyway because you have an exemption fvrom the requirement to hold client money in relation to designated investment business in the first place: CASS 7.10.16 R and 7.10.18 G. Template:Cassanatomy