Recording title to safe custody assets - CASS Provision

Template:CASS Section 6.2.5 (View Template)

This provision was reworked in the great CASS rewrite of 2015. Here’s what PS14/9 had to say about it:

where a firm is acting for a proprietary purpose, it should be registering its proprietary assets in a separate name to the name in which it registers any custody assets it holds for a client.

[However] there are a number of situations in which a firm may need to hold its own assets in the same name as the custody assets belonging to clients to facilitate, or as a result of, a transaction for a client, such as:

• correcting dealing or transaction errors that relate to client positions [...] to reverse the transaction and/or correct the error);
• processing or allocating assets for bulk deals (e.g. as a rounding mechanism when offering aggregated dealing services);
• maintaining a small balance of the firm’s own assets for purely operational or compliance purposes (e.g. as a float to cover custody breaks);
• allowing clients to trade in fractional shares or units and when processing corporate actions attributable to a client’s fractional entitlement; and
• making good a shortfall in custody assets with a firm’s own assets.

CASS Anatomy™ Go Premium {{{2}}} 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 This resource therefore may well be out of date, even if it was accurate once, which it might not have been.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.