CASS Anatomy: Difference between revisions

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 {{anat|cass}}
 ===[[Client money]]===
-The FCA’s client money rules are designed to minimise client credit exposure to firms which deal in client funds, but which are not appropriately-permissioned (and regulated) to hold client funds themselves. Such firms must deposit client funds with an appropriately-permissioned entity, such as an [[approved bank]] which in turn must hold the funds in the firm’s name but designated for clients that firm, to make it clear that the firm has no proprietary claim on the account. In this way, funds in a client account are isolated from claims of creditors upon the failure of that firm (such a failure a “[[primary pooling event]]”.
+The FCA’s client money rules are designed to minimise credit exposure to firms which hold client funds, but who are not authorised to hold client deposits themselves (in otherwords, are not regulated banks). Such firms must deposit client funds with an [[approved bank]] which record the deposits in the firm’s name but belonging to the firm’s clients, so it is clear that the firm has no proprietary claim on the account.
-Firms who are approved banks do not have to offer client money protection – they have a specific exemption from doing so in the CASS rules – but may do so if they wish.
+In this way, the client account is isolated the firm’s creditors on the firm’s insolvency (such a failure a “[[primary pooling event]]”).
+===Banks===
+Approved banks do not have to offer client money protection – they have a specific exemption from doing so in the CASS rules – but may do so if they wish. But they may well find it is quite painful and difficult to do.
+===When do client money obligations arise?===
+In a nutshell, when you give someone money ''apropos'' nothing in particular.
 Generally, there are two reasons you might pay money to someone else: <br>
-'''The general case''': ''Because you are obliged to, under a contract.''
+'''The general case''': ''Because you owe it under a contract.''
-*In some cases (for example a {{tag|CSA}} or even a [[loan]]) the payee might in turn have an obligation to pay some money back to you. But you are exposed to the payee's credit risk in the mean time: you are his '''creditor'''.
+*In some cases (for example a {{tag|CSA}} or even a [[loan]]) the payee might in turn have to pay some money back to you at a later date. But you are exposed to the payee’s credit risk in the mean time: you are a '''creditor'''.
-*This general case does not involve handling [[client money]]  (see {{tag|CASS}} {{Cassprov|7.11.25}}).
+*This general case does '''not''' involve [[client money]]  (see {{tag|CASS}} {{Cassprov|7.11.25}}).
 *You could say this is “title transfer” of cash, but you don't need to, because cash is special: title to cash, by definition, passes by delivery. <br>
 '''The special case''': ''Because you want your counterparty to look after it for you, in connection with some other service it is providing you.''