What are CASS rules?
You must follow rules set out in the Client Assets Sourcebook (CASS) whenever you hold or control client money or safe custody assets as part of your business. This is to keep client money and assets safe if firms fail and exit the market. To reduce the risk of financial loss, you should: identify risks. assess risks.
What do CASS 6 rules cover?
Business in the name of the firm.
Can you Rehypothecate cash?
Rehypothecation is a practice whereby banks and brokers use, for their own purposes, assets that have been posted as collateral by their clients. Clients who permit rehypothecation of their collateral may be compensated either through a lower cost of borrowing or a rebate on fees.
How many CASS rules are there?
CASS Rules in Focus Though there are 13 main sections to the sourcebook, we will summarise three of the CASS rules here, the ones that are most likely to have an impact on the procedures of the business. Additionally, for CASS 7 – Client money rules, there is a brief summary of its implications here.
Who does CASS rules apply to?
The FCA’s Client Assets Sourcebook (CASS) provides rules for firms to follow whenever the firm holds or controls client money or safe custody assets. CASS helps ensure the safety of client money and assets if a firm fails and leaves the market.
How do you hypothecate stocks?
Hypothecation investing occurs when an investor takes part in margin lending in brokerage accounts. That’s because when an investor buys stocks or other securities on margin, they are actually borrowing funds from a broker to do so. They automatically agree to sell these securities in the event of a margin call.
What are Cass permissions?
The principal objective of the FCA’s CASS Rules is to keep Client Assets safe in the event of a firm’s failure. A fundamental requirement of the CASS Rules is that firms must keep client money separate from firm money in segregated client money bank accounts and register custody assets appropriately.
What is client money rules?
A firm should ensure that any money other than client money that is deposited in a client bank account is promptly paid out of that account unless such money is a minimum sum required to open the account, or to keep the account open.
What does Cass define as client money?
CASS 7.2.1R 01/11/2007. For the purposes of this chapter and the MiFID custody chapter, client money means any money that a firm receives from or holds for, or on behalf of, a client in the course of, or in connection with, its MiFID business unless otherwise specified in this section.