CASS Anatomy

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CASS Anatomy

IMPORTANT: CASS changed quite a bit after MiFID II. This resource therefore may well be out of date, even if it was accurate once, which it might not have been.

This is an article about the FCA’s custody and client money rules — client assets — and is fondly known by its chapter in the FCA Sourcebook Table of Contents | 1 | 1A | 3 | 5 | 6 (custody rules) | 7 (client money rules) | 7A | 8 | 9 (PBDA) | 10

For a general exposition on the glorious topic of client money, go to the client money page. It’s a trip.

Anatomy

This is an anatomy of the CASS Rules in the FCA Sourcebook.

1 - Application and General Provisions

1.1 Application and Purpose (General)
1.2 General application: who? what?
1.3 General application: where?
1.4 Application: particular activities
1.5 Application: electronic media and E-Commerce

1A - CASS firm classification and operational oversight

1A.1 Application
1A.2 CASS Firm Classification
1A.3 Responsibility for CASS operational oversight

3 - Collateral

3.1 Application and Purpose
3.2 Requirements

5 - Client money: insurance mediation activity

5.1 Application
5.2 Holding money as agent of insurance undertaking
5.3 Statutory trust
5.4 Non-statutory client money trust
5.5 Segregation and the operation of client money accounts
5.6 Client money distribution
5.7 Mandates
5.8 Safe keeping of client's documents and other assets
5 - Annex 1 Segregation of designated investments: permitted investments, general principles and conditions

6 - Custody rules

6.1 Application
6.2 Holding of client assets

6.2.1 Requirement to protect clients' safe custody assets
6.2.2 Requirement to have adequate organisational arrangements
6.2.3 Registration and recording of legal title
6.2.4 (Nominee companies)
6.2.5 Recording title to safe custody assets
6.2.6 (Adequate investigations)
6.2.7 (documents of title to bearer assets)

6.3 Depositing assets and arranging for assets to be deposited with third parties

6.3.1 - Criteria for depositing assets with a third party
6.3.2 - Considerations when discharging obligations under this part
6.3.3 - Issues firms should address in their agreements with third party custodians
6.3.4 - Suitable jurisdictions for the deposit of safe custody assets
6.3.4A - Third-party custody agreements
6.3.4B - Third-party custody agreements
6.3.5 - Agreements with third party custodians not to contain security interests ...
6.3.6 - ... er, except in the following cases
6.3.7 - When a firm is considered to be acting on the instructions of a professional client
6.3.8 - Safe custody asset includes client money
6.3.9 - And don't think this provision allows a right of set-off

6.4 Use of safe custody assets
Template:CASS Section 6.5 TOC 6.6 Template:Records, accounts and reconciliations (From 1/6/2015)

6.6.54 Treatment of shortfalls

7 - Client money rules

7.1 Application and Purpose

Banking exemption: 7.1.8A | 7.1.8B

7.2 Definition of client money

Delivery versus payment transaction exemption 7.2.8A | 7.2.8AA | 7.2.8AB | 7.2.8AC | 7.2.8AD | 7.2.8AE | 7.2.8B

7.3 Organisational requirements: client money
7.4 Segregation of client money

Depositing Client Money: 7.4.1 | 7.4.2
Qualifying money market funds: 7.4.3 | 7.4.4 | 7.4.5 | 7.4.6
A firm’s selection of a credit insitution, bank or money market fund: 7.4.7 | 7.4.8 | 7.4.9 | 7.4.9A | 7.4.9B | 7.4.9C | 7.4.10
Client bank accounts: 7.4.11 | 7.4.12 | 7.4.13
Payment of client money into a client bank account: 7.4.14 | 7.4.15 | 7.4.16 | 7.4.17 | 7.4.18 | 7.4.18 | 7.4.20 | 7.4.21
Automated transfers: 7.4.22
Mixed remittance: 7.4.23
Appointed representatives, tied agents, field representatives and other agents: 7.4.24 | 7.4.25 | 7.4.26
Client entitlements: 7.4.27 | 7.4.28
Money due to a client from a firm: 7.4.29
Segregation in different currency: 7.4.30 | 7.4.31
Commodity Futures Trading Commission Part 30 exemption order: 7.4.32 | 7.4.33 | 7.4.34 | 7.4.35

7.5 Transfer of client money to a third party
7.6 Records, accounts and reconciliations
7.7 Statutory trust
7.8 Notification and acknowledgement of trust
7.10 Application and purpose

7.10.3 Opt-in to the client money rules
7.10.8 Money that is not client money
7.10.9 Professional client opt-out
7.10.11 Opt-outs for non-IMD business

Credit institutions and approved banks

7.10.16 R The banking exemption
7.10.17 G
7.10.18 G
7.10.19 R Disclosure required where held under banking exemption
7.10.20 R Disclosure required where money ceases to be held under banking exemption
7.10.21 G
7.10.22 R
7.10.23 G
7.10.24 R

7 - Annex 1

7A Client money distribution

7A.1 Application and purpose
7A.2 Primary pooling events
7A.3 Secondary pooling events

Failure of a bank, intermediate broker, settlement agent or OTC counterparty: secondary pooling events:7A.3.1 | 7A.3.2 | 7A.3.3
Failure of a bank: 7A.3.4 | 7A.3.5
Failure of a bank: pooling: 7A.3.6 | 7A.3.7 | 7A.3.8 | 7A.3.9 | 7A.3.10 | 7A.3.11 | 7A.3.12
Client money received after the failure of a bank: 7A.3.13 | 7A.3.14 | 7A.3.15
Failure of an intermediate broker, settlement agent or OTC counterparty: Pooling: 7A.3.16 | 7A.3.17
Client money received after the failure of an intermediate broker, settlement agent or OTC counterparty: 7A.3.18
Notification to the FCA: failure of a bank, intermediate broker, settlement agent or OTC counterparty: 7A.3.19

8 - Mandates

8.1 Application
8.2 Definition of mandate (Comes into force on 01/01/2013)
8.3 Records and internal controls (Comes into force on 01/01/2013)

9.0 - Prime brokerage

9.1 Application
9.2 Prime broker's daily report to clients
9.3 Prime brokerage agreement disclosure annex
9.4 Information to clients concerning custody assets and client money

Schedule: Transitional Provisions and Schedules