The following Financial Services practice note provides comprehensive and up to date legal information covering:
The client money distribution rules were significantly amended on 1 January 2013 in order to comply with articles 39 and 48 of the European Market Infrastructure Regulation (EMIR). Further amendments were made in July 2013 by policy statement PS14/9: Review of the client assets regime for investment business as a result of consequential changes to the client money distribution rules made as a result of the large number of proposed amendments to the client money rules made in PS 14/9. Further significant amendments were made in July 2017 by policy statement PS17/18: CASS 7A and the special administration regime review. For more information about these changes, see Changes to speed up the return of client money on insolvency.
The rules, which are found in Chapter 7A of the Financial Conduct Authority (FCA) Client Assets Handbook (CASS), apply to firms governed by the client money rules including central clearing parties (CCPs) and clearing member firms (see Practice Note: Client money rules) for further information about the client money rules.
The rules outline what needs to be done in relation to client money when either:
a firm fails (ie a 'primary pooling event' occurs), or
the institution with which client money is placed, fails (ie a 'secondary pooling event' occurs)
The purpose of the rules is to ensure
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