As part of the Financial Services Authority's (FSA) steps to strengthen the regime relating to client asset protection, in October 2010 it produced Policy Statement 10/16, which set out its policy on Client Money and Asset Returns (CMAR). The policy requires all UK-authorised firms who hold client money or client assets to provide returns to the FSA on a regular basis (dependent on the size of the firm), showing what client assets are held and how they are held. This reporting process will give the FSA an overview of firm-specific positions and an overview of UK investment firms' client money/client assets holdings, enabling them to make regulatory interventions on a timely, firm-specific or thematic basis.
Continuing this process, in February 2011 the FSA issued a consultation paper on its proposed operational implementation of the CMAR. The proposals include adding the CMAR to the FSA's online regulatory reporting system, GABRIEL, and to require medium and large firms to start completing CMAR before requiring small firms to do so. The paper calls for firms to indicate whether they agree with this phased approach and whether or not reporting through GABRIEL is suitable.
The consultation paper is available here. Small firms are required to respond by 10 March 2011. Medium and large firms have until 10 April 2011 to respond.