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{{a|cass|}} | {{a|cass|}} | ||
The {{cassprov|Client Money Acknowledgment Letter}} is a letter that a {{cassprov|CASS firm}} must get from any | The {{cassprov|Client Money Acknowledgment Letter}} is a letter that a {{cassprov|CASS firm}} must get under CASS {{cassprov|7.18}} from any [[clearing house]] or [[intermediate broker]] it appoints to whom it will pay client money. As {{t|CASS}} {{cassprov|7.14}} so neatly puts it: | ||
*To acknowledge that the | :''Such circumstances arise when, for example, a firm passes client money to a [[clearing house]] in the form of [[margin]] for the firm's obligations to the [[clearing house]] that are referable to transactions undertaken by the firm for the relevant clients. They may also arise when a firm passes client money to an [[intermediate broker]] for [[contingent liability]] investments in the form of [[Initial margin|initial]] or [[variation margin]] on behalf of a client.'' | ||
*To agree that moneys in the account are only payable to the CASS firm as trustee, and that the subcustodian has no recourse to that money for claims owed by the {{cassprov|CASS firm}}. | |||
It is designed to reinforce the separation of CASS clients’ claim from any other obligation that intermediary has to the firm (be it relating to house positions or non-CASS client positions): | |||
*To acknowledge that the money belongs to the CASS firm's client and relates to transactions the client is entering; | |||
*To agree that moneys in the account are only payable to the CASS firm as [[trustee]], and that the subcustodian has no recourse to that money for claims owed by the {{cassprov|CASS firm}}. | |||
Note this is a different thing from the requirement a custodian has no security interest over {{cassprov|client assets}} under CASS {{cassprov|6.3.5}} and {{cassprov|6.3.6}}. That doesn't require a letter per se, though there are those in the {{cassprov|CASS firm}} community who like to get one nonetheless. Because, why not add another useless piece of paper to the stack and increase your operational burden for no good reason. | Note this is a different thing from the requirement a custodian has no security interest over {{cassprov|client assets}} under CASS {{cassprov|6.3.5}} and {{cassprov|6.3.6}}. That doesn't require a letter per se, though there are those in the {{cassprov|CASS firm}} community who like to get one nonetheless. Because, why not add another useless piece of paper to the stack and increase your operational burden for no good reason. |