Part

CASS Client Assets Sourcebook

Chapter

Custody rules

Printed on: 02/11/2024

Rulebook at: 06/04/2010

CASS 6

Custody rules

CASS 6.1

Application

  • 01/11/2007

CASS 6.1.1

handbook-rule

This chapter (the custody rules) applies to a firm:

  1. (1) [deleted]
    1. (a) [deleted]
    2. (b) [deleted]
  2. (1A) when it holds financial instruments belonging to a client in the course of its MiFID business; and/or
  3. (1B) when it is safeguarding and administering investments, in the course of business that is not MiFID business.
  4. (2) [deleted]
  • 01/01/2009

CASS 6.1.1A

handbook-guidance
The regulated activity of safeguarding and administering investments covers both the safeguarding and administration of assets (without arranging) and arranging safeguarding and administration of assets, when those assets are either safe custody investments or custody assets. A safe custody investment is, in summary, a designated investment which a firm receives or holds on behalf of a client. Custody assets include designated investments, and any other assets that the firm holds or may hold in the same portfolio as a designated investment held for or on behalf of a client.
  • 06/04/2010

CASS 6.1.1B

handbook-rule
Firms to which the custody rules apply by virtue of CASS 6.1.1R (1B) must also apply the custody rules to those custody assets which are not safe custody investments in a manner appropriate to the nature and value of those custody assets.
  • 01/01/2009

CASS 6.1.1C

handbook-guidance

In accordance with article 42 of the Regulated Activities Order, a firm ("I") will not be arranging safeguarding and administration of assets if it introduces a client to another firm whose permitted activities include the safeguarding and administration of investments, or to an exempt person acting as such, with a view to that other firm or exempt person:

  1. (1) providing a safe custody service in the United Kingdom; or
  2. (2) arranging for the provision of a safe custody service in the United Kingdom by another person;

and the other firm, exempt person or other person who is to provide the safe custody service is not in the same group as I, and does not remunerate I.

  • 01/01/2009

CASS 6.1.2

handbook-guidance
Firms are reminded that dividends (actual or payments in lieu), stock lending fees and other payments received for the benefit of a client, and which are due to the clients, should be held in accordance with the client money chapter where appropriate.
  • 01/01/2009

Business in the name of the firm

CASS 6.1.4

handbook-rule

The custody rules do not apply where a firm carries on business in its name but on behalf of the client where that is required by the very nature of the transaction and the client is in agreement.

[Note: recital 26 to MiFID]

  • 01/11/2007

CASS 6.1.5

handbook-guidance
For example, this chapter does not apply where a firm borrows safe custody assets from a client as principal under a stock lending agreement.
  • 01/01/2009

Title transfer collateral arrangements

CASS 6.1.6

handbook-rule

The custody rules do not apply where a client transfers full ownership of a safe custody asset to a firm for the purpose of securing or otherwise covering present or future, actual, contingent or prospective obligations.

[Note: recital 27 to MiFID]

  • 01/01/2009

CASS 6.1.7

handbook-guidance
A title transfer financial collateral arrangement under the Financial Collateral Directive is a type of transfer of instruments to cover obligations where the financial instrument will not be regarded as belonging to the client.
  • 01/11/2007

CASS 6.1.8

handbook-guidance
Firms are reminded of the client's best interests rule, which requires them to act honestly, fairly and professionally in accordance with the best interests of their clients when structuring their business particularly in respect of the effect of that structure on firms' obligations under this chapter.
  • 01/11/2007

CASS 6.1.9

handbook-guidance
Firms are reminded that, in certain cases, the collateral rules apply where a firm receives collateral from a client in order to secure the obligations of the client.
  • 01/11/2007

Affiliated companies - MiFID business

CASS 6.1.10

handbook-guidance
The fact that a client is an affiliated company in respect of MiFID business does not affect the operation of the custody rules in relation to that client.
  • 01/01/2009

Affiliated companies - non-MiFID business

CASS 6.1.10A

handbook-guidance

In respect of business which is not MiFID business, the custody rules do not apply to a firm when it safeguards and administers a designated investment on behalf of an affiliated company, unless:

  1. (1) the firm has been notified that the designated investment belongs to a client of the affiliated company; or
  2. (2) the affiliated company is a client dealt with at arm's length.
  • 01/01/2009

Delivery versus payment transactions

CASS 6.1.12

handbook-rule
  1. (1) A firm need not treat this chapter as applying in respect of a delivery versus payment transaction through a commercial settlement system if it is intended that the safe custody asset is either to be:
    1. (a) in respect of a client's purchase, due to the client within one business day following the client's fulfilment of a payment obligation; or
    2. (b) in respect of a client's sale, due to the firm within one business day following the fulfilment of a payment obligation;
  2. unless the delivery or payment by the firm does not occur by the close of business on the third business day following the date of payment or delivery of the safe custody asset by the client.
  3. (2) Until such a delivery versus payment transaction through a commercial settlement system settles, a firm may segregate money (in accordance with the client money chapter) instead of the client's safe custody assets.
  • 01/01/2009

Temporary handling of safe custody assets

CASS 6.1.15

handbook-guidance
The custody rules do not apply if a firm temporarily handles a safe custody asset belonging to a client. A firm should temporarily handle a safe custody asset for no longer than is reasonably necessary. In most transactions this would be no longer than one business day, but it may be longer or shorter depending upon the transaction in question. For example, when a firm executes an order to sell shares which have not been registered on a de-materialised exchange, handling documents for longer periods may be reasonably necessary. However, in the case of safe custody assets in bearer form, the firm is expected to handle them for less than one business day. When a firm temporarily handles safe custody assets, it is still obliged to comply with Principle 10 (Clients' assets).
  • 01/01/2009

CASS 6.1.16

handbook-guidance

When a firm temporarily handles a safe custody asset, in order to comply with its obligation to act in accordance with Principle 10 (Clients' assets), the following are guides to good practice:

  1. (1) a firm should keep the safe custody asset secure, record it as belonging to that client, and forward it to the client or in accordance with the client's instructions as soon as practicable after receiving it; and
  2. (2) a firm should make and retain a record of the fact that the firm has handled that safe custody asset and of the details of the client concerned and of any action the firm has taken.
  • 01/01/2009

Exemptions which do not apply to MiFID business

CASS 6.1.16A

handbook-rule
The exemptions in CASS 6.1.16B R to CASS 6.1.16D G do not apply to a MiFID investment firm which holds financial instruments belonging to a client in the course of MiFID business.
  • 01/01/2009

Operators of regulated collective investment schemes

CASS 6.1.16B

handbook-rule
The custody rules do not apply to a firm when it acts as the operator of a regulated collective investment scheme, in relation to activities carried on for the purpose of, or in connection with, the operation of the scheme.
  • 01/01/2009

Personal investment firms

CASS 6.1.16C

handbook-rule

The custody rules do not apply to a personal investment firm when it temporarily holds a designated investment, other than in bearer form, belonging to a client, if the firm:

  1. (1) keeps it secure, records it as belonging to that client, and forwards it to the client or in accordance with the client's instructions, as soon as practicable after receiving it;
  2. (2) retains the designated investment for no longer than the firm has taken reasonable steps to determine is necessary to check for errors and to receive the final document in connection with any series of transactions to which the documents relate; and
  3. (3) makes a record, which must then be retained for a period of 5 years after the record is made, of all the designated investments handled in accordance with (1) and (2) together with the details of the clients concerned and of any action the firm has taken.
  • 01/01/2009

CASS 6.1.16D

handbook-guidance
Administrative convenience alone should not lead a personal investment firm to rely on CASS 6.1.16C R. Personal investment firms should consider what is in the client's interest and not rely on CASS 6.1.16C R as a matter of course.
  • 01/01/2009

Trustees and depositaries

CASS 6.1.16E

handbook-rule
The specialist regime in CASS 6.1.16F R to CASS 6.1.16I G does not apply to a MiFID investment firm which holds financial instruments belonging to a client in the course of MiFID business.
  • 01/01/2009

CASS 6.1.16F

handbook-rule

When a trustee firm or depositary acts as a custodian for a trust or collective investment scheme and:

  1. (1) the trust or scheme is established by written instrument; and
  2. (2) the trustee firm or depositary has taken reasonable steps to determine that the relevant law and provisions of the trust instrument or scheme constitution will provide protections at least equivalent to the custody rules for the trust property or scheme property;

the trustee firm or depositary need comply only with the custody rules listed in the table below.

  • 01/01/2009

CASS 6.1.16G

handbook-guidance
The reasonable steps referred in CASS 6.1.16FR (2) could include obtaining an appropriate legal opinion to that effect.
  • 01/01/2009

CASS 6.1.16H

handbook-rule
When a trustee firm or depositary within CASS 6.1.16F R arranges for, or delegates the provision of safe custody services by or to another person, the trustee firm or depositary must also comply with CASS 6.3.1 R (Depositing assets and arranging for assets to be deposited with third parties) in addition to the custody rules listed in the table in CASS 6.1.16F R.
  • 01/01/2009

CASS 6.1.16I

handbook-guidance
A trustee firm or depositary that just arranges safeguarding and administration of assets may also take advantage of the exemption in CASS 6.1.16J R (Arrangers).
  • 01/01/2009

Arrangers

CASS 6.1.16J

handbook-rule
Only the custody rules in the table below apply to a firm when arranging safeguarding and administration of assets.
  • 01/01/2009

CASS 6.1.16K

handbook-rule
When a firm arranges safeguarding and administration of assets, it must ensure that proper records of the custody assets which it arranges for another to hold or receive, on behalf of the client, are made and retained for a period of 5 years after they are made.
  • 01/01/2009

CASS 6.1.17

handbook-rule
  1. (1) [deleted]
  2. (1A) [deleted]
  3. (2) [deleted]
  4. (3) [deleted]
  • 01/01/2009

General purpose

CASS 6.1.22

handbook-guidance
Principle 10 (Clients' assets) requires a firm to arrange adequate protection for clients' assets when it is responsible for them. As part of these protections, the custody rules require a firm to take appropriate steps to protect safe custody assets for which it is responsible.
  • 01/01/2009

CASS 6.1.23

handbook-guidance
The rules in this chapter are designed primarily to restrict the commingling of client and the firm's assets and minimise the risk of the client's safe custody assets being used by the firm without the client's agreement or contrary to the client's wishes, or being treated as the firm's assets in the event of its insolvency.
  • 01/01/2009

CASS 6.1.24

handbook-guidance
The custody rules also, where relevant, implement the provisions of MiFID which regulate the obligations of a firm when it holds financial instruments belonging to a client in the course of its MiFID business.
  • 01/01/2009

CASS 6.2

Holding of client assets

  • 01/11/2007

Requirement to protect clients' safe custody assets

CASS 6.2.1

handbook-rule

A firm must, when holding safe custody assets belonging to clients, make adequate arrangements so as to safeguard clients' ownership rights, especially in the event of the firm's insolvency, and to prevent the use of safe custody assets belonging to a client on the firm's own account except with the client's express consent.

[Note: article 13(7) of MiFID]

  • 01/01/2009

Requirement to have adequate organisational arrangements

CASS 6.2.2

handbook-rule

A firm must introduce adequate organisational arrangements to minimise the risk of the loss or diminution of clients' safe custody assets, or the rights in connection with those safe custody assets, as a result of the misuse of the safe custody assets, fraud, poor administration, inadequate record-keeping or negligence.

[Note: article 16(1)(f) of the MiFID implementing Directive]

  • 01/01/2009

Registration and recording of legal title

CASS 6.2.3

handbook-rule

To the extent practicable, a firm must effect appropriate registration or recording of legal title to a safe custody asset in the name of:

  1. (1) the client (or, where appropriate, the trustee firm), unless the client is an authorised person acting on behalf of its client, in which case it may be registered in the name of the client of that authorised person;
  2. (2) a nominee company which is controlled by:
    1. (a) the firm;
    2. (b) an affiliated company;
    3. (c) a recognised investment exchange or a designated investment exchange; or
    4. (d) a third party with whom financial instruments are deposited under CASS 6.3 (Depositing assets and arranging for assets to be deposited with third parties);
  3. (3) any other third party if:
    1. (a) the safe custody asset is subject to the law or market practice of a jurisdiction outside the United Kingdom and the firm has taken reasonable steps to determine that it is in the client's best interests to register or record it in that way, or that it is not feasible to do otherwise, because of the nature of the applicable law or market practice; and
    2. (b) the firm has notified the client in writing;
  4. (4) the firm if:
    1. (a) the safe custody asset is subject to the law or market practice of a jurisdiction outside the United Kingdom and the firm has taken reasonable steps to determine that it is in the client's best interests to register or record it in that way, or that it is not feasible to do otherwise, because of the nature of the applicable law or market practice; and
    2. (b) the firm has notified the client if a professional client, or obtained prior written consent if a retail client.
  • 06/04/2010

CASS 6.2.4

handbook-rule
A firm must accept the same level of responsibility to its client for any nominee company controlled by the firm with respect of any requirements of the custody rules.
  • 01/11/2007

CASS 6.2.5

handbook-rule

A firm may register or record legal title to its own applicable assets in the same name as that in which legal title to a safe custody asset is registered or recorded, but only if:

  1. (1) the firm's applicable assets are separately identified in the firm's records from the safe custody assets; or
  2. (2) the firm registers or records a safe custody asset in accordance with CASS 6.2.3R (4).
  • 01/01/2009

CASS 6.2.6

handbook-guidance
A firm when complying with CASS 6.2.3R (3) or CASS 6.2.3R (4) will be expected to demonstrate that adequate investigations have been made of the market concerned by reference to local sources, which may include an appropriate legal opinion.
  • 01/11/2007

CASS 6.2.7

handbook-rule
A firm must ensure that any documents of title to applicable assets in bearer form, belonging to the firm and which it holds in its physical possession, are kept separately from any document of title to a client's safe custody assets in bearer form.
  • 01/01/2009

CASS 6.3

Depositing assets and arranging for assets to be deposited with third parties

  • 01/01/2009

CASS 6.3.1

handbook-rule
  1. (1) A firm may deposit safe custody assets held by it on behalf of its clients into an account or accounts opened with a third party, but only if it exercises all due skill, care and diligence in the selection, appointment and periodic review of the third party and of the arrangements for the holding and safekeeping of those safe custody assets.
  2. (1A) A firm which arranges the registration of a safe custody investment through a third party must exercise all due skill, care and diligence in the selection and appointment of the third party.
  3. (2) A firm must take the necessary steps to ensure that any client's safe custody assets deposited with a third party, in accordance with this rule are identifiable separately from the applicable assets belonging to the firm and from the applicable assets belonging to that third party, by means of differently titled accounts on the books of the third party or other equivalent measures that achieve the same level of protection.
  4. (3) When a firm makes the selection, appointment and conducts the periodic review referred to under this rule, it must take into account:
    1. (a) the expertise and market reputation of the third party; and
    2. (b) any legal requirements or market practices related to the holding of those safe custody assets that could adversely affect clients' rights.
  5. (4) A firm must make a record of the grounds upon which it satisfies itself as to the appropriateness of its selection of a third party as required in this rule. The firm must make the record on the date it makes the selection and must keep it from the date of such selection until five years after the firm ceases to use the third party to hold safe custody assets belonging to clients.

[Note: articles 16(1)(d) and 17(1) of the MiFID implementing Directive]

  • 01/01/2009

CASS 6.3.2

handbook-guidance

In discharging its obligations under this section, a firm should also consider, together with any other relevant matters:

  1. (1) once a safe custody asset has been lodged by the firm with the third party, the third party's performance of its services to the firm;
  2. (2) the arrangements that the third party has in place for holding and safeguarding the safe custody asset;
  3. (3) current industry standard reports, for example Financial Reporting and Auditing Group (FRAG) 21 report or its equivalent;
  4. (4) the capital or financial resources of the third party;
  5. (5) the credit rating of the third party; and and
  6. (6) any other activities undertaken by the third party and, if relevant, any affiliated company.
  • 01/01/2009

CASS 6.3.3

handbook-guidance

A firm should consider carefully the terms of its agreements with third parties with which it will deposit safe custody assets belonging to a client. The following terms are examples of the issues firms should address in this agreement:

  1. (1) that the title of the account indicates that any safe custody asset credited to it does not belong to the firm;
  2. (2) that the third party will hold or record a safe custody asset belonging to the firm's client separately from any applicable asset belonging to the firm or to the third party;
  3. (3) the arrangements for registration or recording of the safe custody asset if this will not be registered in the client's name;
  4. (4) the restrictions over the third party's right to claim a lien, right of retention or sale over any safe custody asset standing to the credit of the account;
  5. (5) the restrictions over the circumstances in which the third party may withdraw assets from the account;
  6. (6) the procedures and authorities for the passing of instructions to or by the firm;
  7. (7) the procedures regarding the claiming and receiving of dividends, interest payments and other entitlements accruing to the client; and
  8. (8) the provisions detailing the extent of the third party's liability in the event of the loss of a safe custody asset caused by the fraud, wilful default or negligence of the third party or an agent appointed by him.
  • 01/01/2009

CASS 6.3.4

handbook-rule
  1. (1) A firm must only deposit safe custody assets with a third party in a jurisdiction which specifically regulates and supervises the safekeeping of safe custody assets for the account of another person with a third party who is subject to such regulation.
  2. (2) A firm must not deposit safe custody assets held on behalf of a client with a third party in a country that is not an EEA State (third country) and which does not regulate the holding and safekeeping of safe custody assets for the account of another person unless:
    1. (a) the nature of the safe custody assets or of the investment services connected with those safe custody assets requires them to be deposited with a third party in that third country; or
    2. (b) the safe custody assets are held on behalf of a professional client and the client requests the firm in writing to deposit them with a third party in that third country.
  3. (3) [deleted]
    1. (a) [deleted]
    2. (b) [deleted]
      1. (i) [deleted]
      2. (ii) [deleted]
      3. (iii) [deleted]

[Note: article 17(2) and (3) of the MiFID implementing Directive]

  • 01/01/2009

CASS 6.4

Use of safe custody assets

  • 01/01/2009

CASS 6.4.1

handbook-rule
  1. (1) A firm must not enter into arrangements for securities financing transactions in respect of safe custody assets held by it on behalf of a client or otherwise use such safe custody assets for its own account or the account of another client of the firm, unless:
    1. (a) the client has given express prior consent to the use of the safe custody assets on specified terms; and
    2. (b) the use of that client's safe custody assets is restricted to the specified terms to which the client consents.
  2. (2) A firm must not enter into arrangements for securities financing transactions in respect of safe custody assets held by it on behalf of a client in an omnibus account held by a third party, or otherwise use safe custody assets held in such an account for its own account or for the account of another client unless, in addition to the conditions set out in (1):
    1. (a) each client whose safe custody assets are held together in an omnibus account has given express prior consent in accordance with (1)(a); or
    2. (b) the firm has in place systems and controls which ensure that only safe custody assets belonging to clients who have given express prior consent in accordance with the requirements of (1)(a) are used.
  3. (3) For the purposes of obtaining the express prior consent of a retail client under this rule the signature of the retail client or an equivalent alternative mechanism is required.
  4. (4) [deleted]

[Note: article 19 of the MiFID implementing Directive]

  • 06/04/2010

CASS 6.4.2

handbook-guidance

Firms are reminded of the client's best interests rule, which requires the firm to act honestly, fairly and professionally in accordance with the best interests of their clients. An example of what is generally considered to be such conduct, in the context of stock lending activities involving retail clients is that:

  1. (1) the firm ensures that relevant collateral is provided by the borrower in favour of the client;
  2. (2) the current realisable value of the safe custody asset and of the relevant collateral is monitored daily; and
  3. (3) the firm provides relevant collateral to make up the difference where the current realisable value of the collateral falls below that of the safe custody asset, unless otherwise agreed in writing by the client.
  • 01/01/2009

CASS 6.4.3

handbook-rule

Where a firm uses safe custody assets as permitted in this section, the records of the firm must include details of the client on whose instructions the use of the safe custody assets has been effected, as well as the number of safe custody assets used belonging to each client who has given consent, so as to enable the correct allocation of any loss.

[Note: article 19(2) of the MiFID implementing Directive]

  • 01/01/2009

CASS 6.5

Records, accounts and reconciliations

  • 01/11/2007

Records and accounts

CASS 6.5.1

handbook-rule

A firm must keep such records and accounts as necessary to enable it at any time and without delay to distinguish safe custody assets held for one client from safe custody assets held for any other client, and from the firm's own applicable assets.

[Note: article 16(1)(a) of the MiFID implementing Directive]

  • 01/01/2009

CASS 6.5.2

handbook-rule

A firm must maintain its records and accounts in a way that ensures their accuracy, and in particular their correspondence to the safe custody assets held for clients.

[Note: article 16(1)(b) of the MiFID implementing Directive]

  • 01/01/2009

Record keeping

CASS 6.5.3

handbook-rule
A firm must ensure that the records made under this section are retained for a period of five years after they are made.
  • 01/11/2007

Internal reconciliation of safe custody assets held for clients

CASS 6.5.4

handbook-guidance
  1. (1) Carrying out internal reconciliations of the safe custody assets held for each client with the safe custody assets held by the firm and third parties is an important step in the discharge of the firm's obligations under CASS 6.5.2 R (Records and accounts) and, where relevant, SYSC 4.1.1 R (General requirements) and SYSC 6.1.1 R (Compliance).
  2. (2) A firm should perform such internal reconciliations:
    1. (a) as often as is necessary; and
    2. (b) as soon as reasonably practicable after the date to which the reconciliation relates;
  3. to ensure the accuracy of the firm's records and accounts.
  4. (3) Reconciliation methods which can be adopted for these purposes include the 'total count method', which requires that all safe custody assets be counted and reconciled as at the same date.
  5. (4) If a firm chooses to use an alternative reconciliation method (for example the 'rolling stock method') it needs to ensure that:
    1. (a) all of a particular safe custody asset are counted and reconciled as at the same date; and
    2. (b) all safe custody assets are counted and reconciled during a period of six months.
  • 06/04/2010

CASS 6.5.5

handbook-rule
A firm that uses an alternative reconciliation method must first send a written confirmation to the FSA from the firm's auditor that the firm has in place systems and controls which are adequate to enable it to use the method effectively.
  • 01/11/2007

Reconciliations with external records

CASS 6.5.6

handbook-rule

A firm must conduct on a regular basis, reconciliations between its internal accounts and records and those of any third parties by whom those safe custody assets are held.

[Note: article 16(1)(c) of the MiFID implementing Directive]

  • 01/01/2009

CASS 6.5.7

handbook-guidance
Where a firm deposits safe custody assets belonging to a client with a third party, in complying with the requirements of CASS 6.5.6 R, the firm should seek to ensure that the third party will deliver to the firm a statement as at a date or dates specified by the firm which details the description and amounts of all the safe custody assets credited to the account, and that this statement is delivered in adequate time to allow the firm to carry out the periodic reconciliations required in CASS 6.5.6 R.
  • 01/01/2009

Frequency of external reconciliations

CASS 6.5.8

handbook-guidance

A firm should perform the reconciliation required by CASS 6.5.6 R:

  1. (1) as regularly as is necessary; and
  2. (2) as soon as reasonably practicable after the date to which the reconciliation relates;

to ensure the accuracy of its internal accounts and records against those of third parties by whom safe custody assets are held.

  • 01/01/2009

Independence of person conducting reconciliations

CASS 6.5.9

handbook-guidance
Whenever possible, a firm should ensure that reconciliations are carried out by a person (for example an employee of the firm) who is independent of the production or maintenance of the records to be reconciled.
  • 01/01/2009

Reconciliation discrepancies

CASS 6.5.10

handbook-rule
A firm must promptly correct any discrepancies which are revealed in the reconciliations envisaged by this section, and make good, or provide the equivalent of, any unreconciled shortfall for which there are reasonable grounds for concluding that the firm is responsible.
  • 01/11/2007

CASS 6.5.11

handbook-guidance
Items recorded or held within a suspense or error account fall within the scope of discrepancies.
  • 01/11/2007

CASS 6.5.12

handbook-guidance
A firm may, where justified, conclude that another person is responsible for an irreconcilable shortfall despite the existence of a dispute with that other person about the unreconciled item. In those circumstances, the firm is not required to make good the shortfall but is expected to take reasonable steps to resolve the position with the other person.
  • 01/11/2007

Notification requirements

CASS 6.5.13

handbook-rule

A firm must inform the FSA in writing without delay:

  1. (1) if it has not complied with, or is unable, in any material respect, to comply with the requirements in CASS 6.5.1 R, CASS 6.5.2 R or CASS 6.5.6 R; or
  2. (2) if, having carried out a reconciliation, it has not complied with, or is unable, in any material respect, to comply with CASS 6.5.10 R.
  • 01/11/2007

Audit of compliance with the MiFID custody rules

CASS 6.5.14

handbook-guidance
Firms are reminded that the auditor of the firm has to confirm in the report submitted to the FSA under SUP 3.10 (Duties of auditors: notification and report on client assets) that the firm has maintained systems adequate to enable it to comply with the custody rules.
  • 06/04/2010

CASS 6.5.15

handbook-guidance
Firms that use an alternative reconciliation method are reminded that the firm's auditor must confirm to the FSA in writing that the firm has in place systems and controls which are adequate to enable it to use another method effectively (see CASS 6.5.5 R).
  • 01/11/2007