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6.1.1 - CASS Provision: Difference between revisions
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{{ | {{fullanatopen|cass|{{cassquote|6|1|1}}}} | ||
====Discussion==== | ====Discussion==== | ||
=====Executing Broker acting as Agent===== | =====Executing Broker acting as Agent===== | ||
CASS {{cassprov|6.1.1}}R requires that CASS {{cassprov|6}} (the Custody Rules) applies to a {{cassprov|firm}} inter alia | CASS {{cassprov|6.1.1}}R requires that CASS {{cassprov|6}} (the Custody Rules) applies to a {{cassprov|firm}} inter alia “when it holds {{cassprov|financial instruments}} that belong to a {{cassprov|client}} in the course of its MiFID business”. | ||
An effective declaration of trust over such {{cassprov|financial instruments}} means that those securities will belong to the {{cassprov|client}} but will be held by the {{cassprov|firm}}. | An effective declaration of trust over such {{cassprov|financial instruments}} means that those securities will belong to the {{cassprov|client}} but will be held by the {{cassprov|firm}}. | ||
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Prima facie, therefore, the {{cassprov|firm}} would be subject to the Custody Rules in relation to its holdings of financial instruments subject to such a trust. | Prima facie, therefore, the {{cassprov|firm}} would be subject to the Custody Rules in relation to its holdings of financial instruments subject to such a trust. | ||
However, CASS {{cassprov|6.1.12}}R 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 | However, CASS {{cassprov|6.1.12}}R 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. | 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. | ||