6.1.1 - CASS Provision: Difference between revisions
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 1: | Line 1: | ||
{{cassquote|6|1|1}} | {{fullanatopen|{{cassquote|6|1|1}}}} | ||
====Discussion==== | ====Discussion==== | ||
=====Executing Broker acting as Agent===== | =====Executing Broker acting as Agent===== | ||
| Line 11: | Line 11: | ||
On the basis that the securities are (i) to be bought and sold on markets, settled, as is customary, on a dvp basis and (ii) delivered to the fund intra-day then the client asset rules will not apply. | On the basis that the securities are (i) to be bought and sold on markets, settled, as is customary, on a dvp basis and (ii) delivered to the fund intra-day then the client asset rules will not apply. | ||
Revision as of 17:00, 28 November 2016
|
{{anattitle-
|
Discussion
Executing Broker acting as Agent
CASS 6.1.1R requires that CASS 6 (the Custody Rules) applies to a firm inter alia “when it holds financial instruments that belong to a client in the course of its MiFID business”.
An effective declaration of trust over such financial instruments means that those securities will belong to the client but will be held by the firm.
Prima facie, therefore, the firm would be subject to the Custody Rules in relation to its holdings of financial instruments subject to such a trust.
However, CASS 6.1.12R carves out of the scope of the Custody Rules those holdings in respect of delivery versus payment transactions through a commercial settlement system if it is intended that the asset will be “due to the client within one business day following the client's fulfilment of the payment obligation”.
On the basis that the securities are (i) to be bought and sold on markets, settled, as is customary, on a dvp basis and (ii) delivered to the fund intra-day then the client asset rules will not apply.