CASS changes

A reminder that the second phase of changes to the CASS regime came into being on 1 December – see Regulatory Roundup 56.

Policy Statement PS14/9 (‘Review of the client assets regime for investment business’) published in June last year included all the changes to CASS – and to other relevant parts of the Handbook – with a useful summary of the changes in each of the three phases set out in chapter 2.

CASS Changes in December included (but not limited to):

  • the possibility of remittance to charity of unclaimed client money and unclaimed custody assets (CASS 7.2.18 & CASS 6.2.8).
  • the ‘Delivery vs. Payment’ exemption will be reined in so that a firm will have to be a member or participant (or suitably sponsored) of the relevant commercial settlement system and will require permission from the client to use the exemption (CASS 7.2.8 & CASS 6.1.12).
  • trust acknowledgement letters must be in place before monies are held in the relevant bank account -the 20 day period of grace has been removed (CASS 7).
  • standard templates now exist for such trust acknowledgement letters for firms to use (CASS 7 Annex).
  • written agreements must be effected whenever assets are placed, or when arranging for such assets to be placed, with a third party custodian (CASS 6.3.4A).
  • title transfer collateral arrangements must be subject to a written agreement (CASS 7.2.3B & CASS 6.1.6B).
  • the information that has to be provided to clients under COBS 6.1.7 is extended to include professional clients and eligible counterparties (CASS 9.4).

Note that there are transitional provisions in respect of clients existing before 1 December 2014 and firms should refer to the table in CASS TP1.

The third, and final, phase of changes set out within PS14/9 will come into force on 1 June 2015.

COntact us for assistance

Please fill our free consultation form and a member of our team will get in contact with you.

Your compliance questions answered. Just ask ViCA - Your virtual compliance assistant