Failure of a bank, intermediate broker, settlement agent or OTC counterparty: secondary pooling events - CASS Provision

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Failure of a bank, intermediate broker, settlement agent or OTC counterparty: secondary pooling events:7A.3.1 | 7A.3.2 | 7A.3.3


7A.3.1: A secondary pooling event occurs on the failure of a third party to which client money held by the firm has been transferred under CASS 7.4.1 R (1) to CASS 7.4.1 R (3) (Depositing client money) or CASS 7.5.2 R (Transfer of client money to a third party).

7A.3.2: CASS 7A.3.6 R to CASS 7A.3.18 R do not apply if, on the failure of the third party, the firm repays to its clients or pays into a client bank account, at an unaffected bank, an amount equal to the amount of client money which would have been held if a shortfall had not occurred at that third party.

7A.3.3: When client money is transferred to a third party, a firm continues to owe fiduciary duties to the client. Whether a firm is liable for a shortfall in client money caused by a third party failure will depend on whether it has complied with its duty of care as agent or trustee.

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