FCA debt management client money requirements
Produced in partnership with Marcus Bonnell and Rachael Ellis of RPC
FCA debt management client money requirements

The following Financial Services practice note produced in partnership with Marcus Bonnell and Rachael Ellis of RPC provides comprehensive and up to date legal information covering:

  • FCA debt management client money requirements
  • Background to the FCA’s client money requirements in relation to debt management firms
  • The rationale for having different client money requirements in relation to debt management firms
  • The scope of CASS 11
  • CASS operational oversight requirements
  • CASS large debt management firm
  • CASS small debt management firm
  • Record-keeping
  • Debt management firms holding client money as trustee
  • Requirements relating to client bank account acknowledgement letters
  • More...

FCA debt management client money requirements

Background to the FCA’s client money requirements in relation to debt management firms

In December 2012, the Financial Services Act 2012 (FSA 2012) received royal assent and enabled the transfer of consumer credit regulation from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA). The government published a consultation on 6 March 2013 which set out the detail underpinning the new regulatory framework for consumer credit under the FCA. As a result, the Financial Services Act 2012 (Consumer Credit) Order 2013 (FSA (CC) Order 2013) was made on 25 July 2013 and largely came into force on 1 April 2014.

In March 2013, whilst developing policies for consumer credit, the FCA’s predecessor, the Financial Services Authority (FSA), published a consultation paper (the March 2013 consultation) in which it examined the stages in the lifecycle for consumers using consumer credit. They found debt management to be a higher-risk activity. The illustration below describes the firm-level risks that can arise at various stages in the product cycle.

Initially the FCA felt that only prudential standards amounting to capital requirements were necessary. However, they then further consulted in October 2013 (the October 2013 consultation) on expanding these to client money requirements.

As a result of the further consultation, the FCA published policy statement PS14/3 containing the final CASS 11 rules which came into

Popular documents