Treatment of shortfalls - CASS Provision: Difference between revisions

Treatment of shortfalls - CASS Provision (view source)

882 bytes added , 27 February 2015

no edit summary

82,891

edits

@@ Line 1: / Line 1: @@
+the following is being introduced to the CASS rules as of 1 June 2015 - essentially, upon a shortfall arising a custodian or prime broker must set aside “{{fcaprov|applicable assets}}” in a custody account to cover the potential loss each client would suffer if it were to go insolvent before resolving the shortfall.
+Given typical omnibus segregation, where counterparty to a prime brokerage customer fails to settle into the {{tag|prime broker}} while simultaneously the {{tag|prime broker}} delivers a quantity of the same security out on behalf of a different customer, but in reliance on the purchased asset coming in, a shortfall will happen. Usually it will be quickly remediated, but where not (probably 5-10 business days) the PB will, under the new rules, need to take some action to mitigate the credit exposure its customers have to it as a result of the shortfall.
 {{casssnap|6.6.54}}
-{{cassanatomy}}
+{{anat|cass}}