The Central Bank aims to streamline the client asset regime and make it easier to understand. It is proposing a new regime which is aimed at minimising the risk of loss or misuse of client assets while the firm is a going concern and in the event of the insolvency of a firm to return those assets to clients as efficiently and cost effectively as possible.
The Central Bank’s proposed regime provides for a framework based on seven Client Asset Core Principles with a once off Transitional Regulation in respect of a firm’s initial Client Asset Management Plan (CAMP). The format for the revised framework provides for Regulations complemented by Guidance. The draft Regulations set out what firms, holding client assets, are required to comply with. The draft Guidance, in Q&A format, aims to assist firms in the interpretation of the Regulations.
It is worth noting that following industry engagement the Central Bank has confirmed (on page 4 of the Guidance document) that where fund collection accounts are held as an asset of the fund the Client Asset Regulations will not apply.