The FCA has today published PS 14/9 Review of client assets regime for investment business. This follows its earlier consultation paper CP 13/5.
As our report on CP 13/5 explained, the consultation dealt with proposed changes to the CASS distribution rules including the “speed proposal” and the alternative proposal involving codifying the existing regime.
At that time, the final report by Peter Bloxham on the reform of the Special Administration Regime (SAR) for HM Treasury was still awaited. This report was published after the FCA consultation has close. You can read our report on Bloxham and the reform of the SAR here.
We will publish more detailed analysis of the changes in PS 14/9 in due course. In the meantime some key points are:
- The “speed proposal” is deferred in the light of feedback received and the need to take account of changes to the SAR. FCA will work with HMT and plans to consult again later in the year.
- The changes and new rules contained in PS 14/9 will be implemented in stages - on 1st July and 1 December 2014 and 1st June 2015 (with some transitional provisions for the first phase and some for the second phase).
- The changes and new rules will impact firms which conduct investment business and hold client money, custody assets, collateral and/or mandates, firms which rely on an exemption in CASS and loan-based crowdfunding firms (which came within the remit of CASS 7 through the rule changes in PS 14/4).
- The changes will not impact general insurance intermediaries that hold client money under CASS 5 or debt management firms that hold client money under CASS 11.
- FCA is liaising with HMT about notifying the European commission in the context of the new rules which may be considered additional to MiFID requirements.
- The main changes in PS 14/9 are summarised in a separate FCA publication which you can access here.