On 24 January 2017, we blogged that the FCA published Consultation Paper 17/2: Client asset sourcebook 7A & the Special Administration Regime Review (CP17/2). CP17/2 was consulting on changes to the Client Assets sourcebook (CASS) in relation to an investment firm failure and their interaction with the Special Administration Regime (SAR). Collectively, the aim of the proposals was to speed up the distribution of client assets, improve customer outcomes and reduce the market impact of an investment failure.

The FCA has now published Policy Statement 17/18: CASS 7A and the Special Administration Regime Review: Feedback to CP17/2 and final rules (PS17/18). PS17/18 summarises the feedback the FCA received to CP17/2. Among other things, the FCA explains that it has introduced rules on:

  • transfer of client money under CASS 7A;
  • transfer and distribution of custody assets;
  • post-transfer notifications to clients;
  • contacting clients prior to the closure of the client estate;
  • treatment of unclaimed client assets and de minimis balances;
  • hindsight;
  • post-primary pooling event (PPE) reconciliations;
  • triggers to a PPE; and
  • client money received by the firm after a PPE;

The rules set out in Appendix 1 come into force on 26 July 2017 and investment firms to which CASS applies will need to comply with them from that date in the event of failure or other pooling events.

View FCA policy statement on CASS 7A and the SAR review, 25 July 2017