The FCA has published Consultation Paper 17/29: Client money and unbreakable deposits (CP17/29). In CP17/19 the FCA consults on minor amendments to the Client Assets sourcebook (CASS) as it found that some investment firms are experiencing difficulty depositing client money in banks in accordance with CASS requirements. In particular, the FCA is consulting on the amendment to the 30-day rule to ensure customers continue to be appropriately protected by firms holding their client money. In terms of changes to CASS, the FCA seeks views on:
- permitting a firm to deposit an appropriate proportion of client money in an unbreakable deposit (UD) of a maximum of 90 days;
- where a firm deposits client money in a UD of 31-90 days, it must comply with certain conditions; and
- requiring CASS medium and large firms to report client money in a UD of 31 – 90 days in their client money and asset return.
The deadline for comments on CP17/29 is 1 November 2017.
The FCA aims to publish a policy statement together with final rules. The expects the rules alongside the Handbook changes as required by the UK transposition of MiFID II.
View FCA consults on client money and unbreakable deposits, 1 August 2017