CASS: Client Asset and MoneyRules

Question 1

who do the client money and custody rules apply to

Answer 1

all clients RC PC ECP

Question 2

purpose of the client money and custody rules

Answer 2

fiduciary duty to provide adequate protection for client money

Question 3

which CASS rule is custody and where does it apply

Answer 3

CASS 6

mifid and non mifid business

Question 4

which CASS rule is client money and where does it apply

Answer 4

mifid business

opt in available for non mifid business

Question 5

what is segregation of assets

Answer 5

client money held in an approved bank and separate from the firms money

Question 6

what qualifies as an approved bank in segregation

Answer 6

a central bank, a BCD credit institution, a bank authorised by a third country or a qualifying money market fund

Question 7

the requirement to reconcile applies to who

Answer 7

all clients RC PC ECP

Question 8

how often do firms need to reconcile records of client asset balances

Answer 8

as often as necessary

Question 9

when should shortfalls be corrected

Answer 9

asap - close of business on the day of reconciliation

Question 10

what must a firm do if unable to reconcile

Answer 10

must write to the FCA

Question 11

what three firms do CASS rules not apply

Answer 11

ICVC
UCITS schemes
BCD credit institutions

Question 12

what three types of money do CASS not apply to

Answer 12

coins held for the value of their metal
money held for delivery versus payment
money due and payable to the firm

Question 13

when does client money cease to be such

Answer 13

once cleared, normally when funds leave the account

Question 14

who does enhancing the CASS regime apply to

Answer 14

all clients rc pc ecp

Question 15

what are the 4 things to enhance the cass regime (without description)

Answer 15

CASS audit
right of use
CASS resolution pack
Mandate accounts

Question 16

how often is a CASS audit required and by when does it need to be submitted to the FCA

Answer 16

required annually

submitted to the FCA within 4 months of the audit

Question 17

who sets the CASS audit assurance standard

Answer 17

the Financial Reporting Council

Question 18

what must a firm do if CASS audit identifies a breach

Answer 18

must explain any breach identified

Question 19

what is right of use

Answer 19

where the right to use a clients assets is transferred to the firm

Question 20

what is it called when a firm uses clients assets

Answer 20

rehypothecation

Question 21

what needs to be in place for a firm to use clients assets

Answer 21

firm and client must have a proper right of use agreement in place, called a TTCA (title transfer collateral agreement)

Question 22

what is a CASS resolution pack

Answer 22

specific documents and information relating to client money and assets which must be available to the regulator on request

Question 23

what are mandate accounts

Answer 23

where a client gives a firm control over their assets or liabilities e.g. direct debits

Question 24

what do the mandate rules require firms to do

Answer 24

establish and maintain records and internal controls to prevent any misuse of the mandate authority granted by the client

Question 25

when is a mandate not required

Answer 25

if the business relates to a reinsurance contract

Question 26

how is a mandate usually provided

Answer 26

through the firms terms of business

Question 27

when do CASS 7 and CASS 6 not apply with respect to madates

Answer 27

where a client has a mandate with a firm over the control of their assets held at a third party