CASS 9 and information to clients
CASS 9 and information to clients

The following Financial Services guidance note provides comprehensive and up to date legal information covering:

  • CASS 9 and information to clients
  • Background to, and application of, CASS 9
  • Effect of CASS 9 amendments
  • Prime brokerage
  • Reporting requirements under CASS 9

Background to, and application of, CASS 9

Prior to 1 December 2014, most of the client information and reporting requirements in relation to client assets held by investment firms were found in the Conduct of Business sourcebook (COBS). One key exception was the disclosure and reporting requirements specific to prime brokerage firms in CASS 9. In consultation paper CP13/5 Review of the client assets regime for investment business, the Financial Conduct Authority (FCA) consulted on a major re-write of CASS, including introducing a package of proposals concerning the frequency of reporting to clients, the information that should be provided to clients before the provision of investment services and the creation of a standalone disclosure document to summarise key provisions within client agreements which may affect rights or protections under CASS. The consultation came in the context of increased protection of client assets fundamental to consumer rights and had three aims:

  1. improve the speed of return of client assets following the insolvency of an investment firm

  2. achieve a greater return of client assets to clients following the insolvency of an investment firm, and

  3. reduce the market impact of an insolvency of an investment firm that holds client assets

The consultation was extensive and examined and proposed changes to:

  1. the client money distribution regime

  2. multiple client money pools

  3. client money rules (CASS