Disclosure required where held under banking exemption - CASS Provision

CASS Anatomy™ Go Premium To see the current text of CASS 7.10.19 in the FCA handbook, click here. 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 This resource therefore may well be out of date, even if it was accurate once, which it might not have been.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 SourcebookTable of Contents | 1 | 1A | 3 | 5 | 6 (custody rules) | 7 (client money rules) | 7A | 8 | 9 (PBDA) | 10 Comments? Questions? Suggestions? Requests? Insults? We’d love to 📧 hear from you. Sign up for our newsletter.

The rule that requires a bank which is providing designated investment business to a client to notify it, before providing designated investment business services to the client in respect of those sums that the money the bank holds for them in respect of those sums is held as banker and not as trustee, and that the client money distribution rules will not apply should the bank fail.

Fun fact: if you don’t provide designated investment services, you don’t have to make this disclosure. Therefore Monzo, which just operates as an ordinary old bank with a Part 4A permission to accept deposits as contemplated in Article 5 of the Regulated Activities Order promulgated under the Financial Services and Markets Act 2000, doesn't need to. It is only when you are accepting deposits which would, if they were not held in connection with designated investment business, be regulated deposits but in fact are not, because they are held in connection with designated investment business. So you have to tell people you are acting as banker when, strictly speaking, you’re not.

Anyway, hope that is all clear.

See also

Monzo Terms and conditions.