Client Money and Assets

The FSA has issued a fairly scathing report on the handling of client money and assets by firms. Regulatory action has been taken against a number of firms including s166 and two Enforcement referrals (“… and a number of other firms under active consideration for Enforcement Referrals.”).

A ‘Dear CEO’ letter has also gone out, although only to relationship managed firms. Other firms which have the ability to hold (or, according the FSA website, that have the ability to control) clients’ money and assets will be provided with a link to the letter and report via a regulatory update.

The links below will allow access to both the report and letter – as well as a ‘Dear CO’ letter sent in March last year on the same topic. Apart from obvious areas such as reconciliations there were failings in elementary areas such as the trust status requirement under CASS 7.8.

There is the threat of more CASS related visits later this year so the message to those firms which hold client money/assets – even if not relationship managed – is to review their current operations in the light of the report findings and to ensure that there are no gaps.