On 19 January 2010, the FSA published a Dear CEO letter it had sent to firms drawing their attention to concerns over the handling of client money and assets. The Dear CEO letter also set out action the FSA expected firms to take to address these concerns. At the same time a Client Money and Asset report was published which set out the FSA's findings and concerns following visits to firms that specifically focussed on compliance with client money and custody requirements.
In the Dear CEO letter the FSA stated that the proper protection of client assets was vital. The FSA also asked firms to confirm that the Dear CEO letter and the Client Money and Asset report had been properly considered and that they were in compliance with their obligations regarding the protection of client money and assets.
On 20 May 2010, the FSA published a follow up letter that set out a deadline for firms to respond to the Dear CEO letter. By no later than 30 June 2010, firms are asked to confirm the following:
- That they have properly considered the content of the Dear CEO letter and the report.
- Whether or not they are in compliance with their obligations for client money and assets.
- The name and contact details of the person who has overall responsibility for compliance with the FSA’s client money and assets requirements.
The FSA stated that firms who fail to respond by the deadline may be subject to follow up action. This could include the FSA exercising its powers under the Financial Services and Markets Act 2000, including for example under section 166 to require the firm to appoint a skilled person to provide a report.
View Client Money and Asset report Dear CEO letter - follow up, 20 May 2010