FCA finishes client money and custody asset rules
11 June 2014 London
Image: Shutterstock
The Financial Conduct Authority (FCA) has finalised changes to rules in the UK that will affect some 1500 firms that collectively hold more than £100 billion in client money and £10 trillion in assets.
The client money and custody asset rule changes, which were finalised on 10 June, address lessons learnt from insolvencies such as Lehman Brothers, as well as feedback from firms and observations from the FCA’s specialist client assets unit.
FCA director of markets David Lawton said: “The protection of client assets is central to confidence in the UK markets and fundamental to consumers’ rights and the trust they place with firms.”
“These changes will improve the protection offered to client assets and should speed up the recovery of client assets on a failure of a firm. Coupled with the increased focus the FCA has had on client assets, they will go a long way to ensure that confidence in UK markets is maintained and consumers are protected.”
Among the rule changes are a rewrite of the client money rules for investment firms and substantial amendments to the custody rules in the client assets sourcebook (CASS).
The FCA hopes that the changes will improve firms’ systems and controls around segregation, record keeping and reconciliations, as well as client asset risks.
It is not going ahead with changes to client money distribution rules, after the UK Treasury received recommendations in January that could have an effect. The FCA plans to assess what more will need to be done later this year.
The client money and custody asset rule changes, which were finalised on 10 June, address lessons learnt from insolvencies such as Lehman Brothers, as well as feedback from firms and observations from the FCA’s specialist client assets unit.
FCA director of markets David Lawton said: “The protection of client assets is central to confidence in the UK markets and fundamental to consumers’ rights and the trust they place with firms.”
“These changes will improve the protection offered to client assets and should speed up the recovery of client assets on a failure of a firm. Coupled with the increased focus the FCA has had on client assets, they will go a long way to ensure that confidence in UK markets is maintained and consumers are protected.”
Among the rule changes are a rewrite of the client money rules for investment firms and substantial amendments to the custody rules in the client assets sourcebook (CASS).
The FCA hopes that the changes will improve firms’ systems and controls around segregation, record keeping and reconciliations, as well as client asset risks.
It is not going ahead with changes to client money distribution rules, after the UK Treasury received recommendations in January that could have an effect. The FCA plans to assess what more will need to be done later this year.
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