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CASS Anatomy: Difference between revisions
→The special case
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====The special case==== | ====The special case==== | ||
''Because you want | ''Because you want your counterparty to look after it for you under the contract.'' | ||
*Here, you don't owe the payee anything, and the only contract you have | *Here, you don't owe the payee anything, and the only contract you have arises because the counterparty has agreed to look after the money for you. | ||
*This special case is a sort of safekeeping: it is a regulated activity. In the UK it is regulated by the {{tag|FCA}} under the [[Client Asset Sourcebook]] ( | *This special case is a sort of safekeeping: it is a regulated activity. In the UK it is regulated by the {{tag|FCA}} under the [[Client Asset Sourcebook]] (fondly known as the {{tag|CASS}} rules). | ||
*Now this special case creates a metaphysical problem, because when you look after something, you're not meant to take ownership of it. You're just a custodian. But as noted above, you ''can't'' "just look after" someone else's cash: Cash is special. Just by holding it, you own it. | *Now this special case creates a metaphysical problem, because when you look after something, you're not meant to take ownership of it. You're just a {{tag|custodian}}. But as noted above, you ''can't'' "just look after" someone else's cash: Cash is special. Just by holding it, you own it. | ||
*This necessitates two things: | *This necessitates two things: | ||
**''First'': A person agreeing to look after your money can't keep it: | **''First'': A person agreeing to look after your money can't keep it: it must pass it on to someone else to look after, and therefore | ||
**''Second'': Since - hang on - that creates an infinite regression doesn't it? - there needs to be one class of special people who ''are'' allowed to look after your money by keeping it for themselves but promising to pay it back when you want it. | **''Second'': Since - hang on - that creates an infinite regression doesn't it? - there needs to be one class of special people who ''are'' allowed to look after your money by keeping it for themselves but promising to pay it back when you want it. | ||
**And so, lo and behold there are: This special class of people are '' | **And so, lo and behold there are: This special class of people are ''{{tag|bank}}s''. | ||
**You are exposed to the credit risk of | **You are exposed to the credit risk of bank, but as we all now know banks are carefully regulated, capitalised and designed to be appropriate places to look after your money. | ||
====In a {{nutshell}} then?==== | ====In a {{nutshell}} then?==== | ||