Recording title to safe custody assets - CASS Provision
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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™
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