Thu, 21 Nov 2019 09:22
The collapse of Lehman brothers in 2008 highlighted the need for regulation around protecting client money and assets which have been a key priority for the Financial Conduct Authority (FCA) ever since.
The main aim of the FCA is to enable firms to reduce the risk of financial loss by identifying, assessing and mitigating risks. The regulation around the FCA's Client Assets rules requires organisations to arrange for adequate protection of clients' money assets when it is responsible for them.
The FCA's Client Assets Sourcebook (CASS) sets out rules for firms to follow whenever the firm is in charge of client money i.e. a firm holds or controls money or assets from clients. CASS rules are designed to ensure the safety of client money and assets if a firm fails and leaves the market. The rules also state that client money and assets be kept separate from firms' money and assets. This is vital to ensure that money can be returned to the clients promptly if the firm becomes insolvent.
There is an emphasis on firms to have adequate arrangements in place to minimise the number of risks to client money through fraud, poor administration, inadequate record-keeping or negligence. Effective record-keeping is also essential for complying with these requirements.
Failure to comply with CASS rules could lead to significant financial penalties for both firms and individuals.
Our new eLearning course, on client money and assets, covers the key principles and procedures which underpin the rules set out in CASS. The main modules are:
- Foundation modules on the five key procedures reinforced under the client money and assets rules.
- Separate modules on the specific requirements of CASS 7 (the client money rules) and CASS 6 (the custody rules).
- Further modules on mandate rules, and the reporting and resolution pack rules.
Learners are also tested on their understanding to decrease the risks of breaching rules set in CASS. Find out more about our new course HERE.
The Client Money and Assets eLearning course joins our suite of FCA Compliance courses.