Following feedback on the FSA’s proposals contained in Consultation Paper 12/20 “Review of the Client Money Rules for Insurance Intermediaries”, the FCA has released a statement explaining that, following consultation with the industry, it has decided that it will not proceed with any changes to the rules and guidance in Chapter 5 of the FCA’s Client Assets Sourcebook (CASS 5) without a further consultation.
The FSA consultation of August 2012 had proposed a number of changes to the rules and guidance in CASS 5, with a view to providing greater protections over client money. However, the industry’s feedback, along with a re-consideration by the FCA of the costs and benefits of the proposals in light of the Financial Services Act 2012 and additional data on the potential impact on smaller firms, has led the FCA to its decision not to proceed at the current time with any changes.
The existing rules therefore remain in force. In light of the industry feedback on the FSA’s consultation paper and subsequent FCA initiatives aimed at improving the protection of client money, the FCA’s statement may be a signal that it will be some time before we see a new consultation on CASS 5.