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Compound Growth

Client Money Rules Update

18th May 2015

Client Money Rules: CASS Rulebook Changes

Last June (2014) the FCA published a Policy Statement for investment firms holding client money and client assets. The extensive and detailed changes included a rewrite of the FCA’s Client Money Rules and substantial amendments to the CASS Sourcebook.

Policy Statement 14/09 announced a wide range of changes including but not limited to:

The changes to the Client Money Rules are to have been implemented in three stages with the last of these effective 1st June 2015, next month, with the previous two stages having been implemented from 1st July 2014 and 1st December 2014.

The following table sets out a high-level summary of key changes to the CASS Rules which those affected will need to address by the start of next month.

High-level summary of key changes to FCA CASS Rules:

CASS Rule Implementation: Stage 3 - Effective 1st June 2015
















CASS Rule Implementation: Stage 2 - Effective 1st December 2014















CASS Rule Implementation: Stage 1 - Effective 1st July 2014

Policy topic

Date of commencement

Registration of firm and custody assets

01-Jun-15

Depositing assets when using third party custody services

01-Jun-15

Custody recordkeeping, record checks and reconciliations

01-Jun-15

TTCA – procedure for switching

01-Jun-15

DvP window – regulated collective investment scheme

01-Jun-15

Client bank accounts – due diligence and diversification

01-Jun-15

Immediate segregation

01-Jun-15

Physical receipts and allocation of client money

01-Jun-15

Cleared funds

01-Jun-15

Money due to client from firm

01-Jun-15

Prudent segregation

01-Jun-15

Client money relating to custody assets held at a custodian

01-Jun-15

Client money recordkeeping and reconciliations

01-Jun-15

Further consequential changes to the client money distribution rules

01-Jun-15

Non-written mandates

01-Jun-15

Reporting to clients

01-Jun-15

Consequential change to the CMAR and CASS RP

01-Jun-15

Policy topic

Date of commencement

Any transitional

Written custody agreements

01-Dec-14

New rules will not apply to counterparty relationships established before 30 November 2014 until 1 June 2015, unless materially altered

Unclaimed custody assets

01-Dec-14



Unclaimed client money

01-Dec-14


New rules relating to written client agreements will not apply to existing client relationships until 01-Jun-2015

DvP window – commercial settlement system

01-Dec-14


New rules relating to agreement of client will not apply to existing client relationships until 01-Jun-15

Banking exemption

01-Dec-14


New rules relating to client notifications will not apply to existing client relationships until 01-Jun-2015

Transfer of business

01-Dec-14


Alternative approach to client money segregation

01-Dec-14

New rules will not apply to a firm operating the alternative approach on the 30 November 2014 until 01-Jun-2015

Non-standard client money reconciliations

01-Dec-14


New rules will not apply to a firm operating a non-standard method on the 30 June 2014 until 01-Jun-2015

Acknowledgment letters

01-Dec-14


New rules will not apply to existing client bank accounts and client transaction accounts until 01-Jun-2015

Information to clients on safeguarding client assets

01-Dec-14

New rules relating to client disclosures will not apply to existing client relationships until 01-Jun-2015

Policy topic

Date of commencement

Any transitional

CASS 1 application provision

01-Jul-14



CASS 3 application

01-Jul-14


CASS 6 application

01-Jul-14


Multiple client money pools

01-Jul-14


Right to use arrangements

01-Jul-14


CASS 7 application  


01-Jul-14


Trustee firms

01-Jul-14


Payment of interest on client money

01-Jul-14


Money ceasing to be client money

01-Jul-14


Unbreakable term deposits

01-Jul-14

New rules apply to new contracts and firms must move to compliant contracts as soon as permitted

Qualifying money market funds

01-Jul-14


Client money held with third parties

01-Jul-14


CFTC Part 30 Guidance

01-Jul-14


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