2017年-FCA英国金融行为监管局_review_of_the_client_assets_regime_for_investment_business_ps14_9_3页_130kb

Regulator Assessment Summary: PS14/9 - Review of the Client Assets Regime for Investment Business

Core Content

This document outlines the FCA's assessment of the regulatory changes introduced in PS14/9: Review of the client assets regime for investment business, which came into effect on 1 June 2015. The assessment focuses on the impact of the changes to the Client Assets sourcebook (CASS), particularly on the custody, client money, mandate, and information to clients rules. The goal of these changes was to address specific risks, clarify requirements, and enhance the client assets regime to benefit consumers and increase market confidence.

Main Changes and Key Provisions

The following are the key changes implemented in PS14/9:

• CASS 6 and 7: Reordered rules for improved readability, clarified record-keeping processes, and updated requirements for depositing custody assets with third-party custodians, handling money that ceases to be client money, cleared funds, and physical receipts.
• CASS 7: Enhanced due diligence for banks and third parties holding client money, provided flexibility for clearing firms to receive client money into a firm account, and introduced a procedure for prudent segregation of client money.
• CASS 8: Clarified the form and content of records related to mandates.
• CASS 9: Required firms to provide reports to clients on their client asset holdings and to honour client requests for this information.
• Consequential changes: Updated the CASS Resolution Pack (CASS 10) and Client Money and Asset Return (CMAR) to reflect the above changes.

These changes were part of a broader overhaul of the CASS regime, with the most impactful rules implemented first.

Affected Areas and Businesses

The changes primarily affect UK firms that are subject to the CASS sourcebook due to conducting investment business and holding client money, custody assets, collateral, or mandates. These include:

• Brokerage and market intermediary firms: 320 firms
• Asset managers and advisers: 548 firms
• Custody firms: 14 firms
• Other investment-related firms: 36 firms

Impact Assessment

Cost Analysis

Key Findings

• The custody recordkeeping changes had a quantifiable one-off cost of approximately £458,000 to the industry, with no ongoing costs.
• The DvP exemption reduction from three days to one day was not associated with new costs, as firms were already compliant with CASS rules outside the DvP window.
• Overall, the changes were considered clarificatory and had minimal impact, with most provisions in line with existing practices.

Benefits

• The new custody reconciliation method allowed firms to use integrated systems, which many already had in place, reducing the need for traditional internal reconciliation.
• Enhanced due diligence and segregation requirements improved client protection and market confidence.
• The requirement to provide clear reports to clients on their asset holdings increased transparency and trust in financial services.

BIT Score and Net Cost

• BIT Score: 0.5
• Net cost to business (EANDCB): £0.1 million
• Business Net Present Value: -0.46 (over 10 years)

The BIT score reflects the overall impact of the policy, considering both costs and benefits. The net cost is relatively low, indicating that the benefits of the changes outweighed the costs.

Additional Information for BIT Score Validation

• The cost estimates were derived from a 2013 pre-consultation survey and were not significantly challenged during the consultation period.
• The FCA acknowledged that the high cost figures reported by firms were likely due to non-compliance with CASS rules, rather than the new requirement to reduce the DvP window.
• The changes were reported to have minimal impact on most firms, as they aligned with existing practices and provided flexibility in implementation.

Conclusion

The changes introduced in PS14/9 were primarily clarificatory, aimed at improving the readability, clarity, and effectiveness of the CASS regime. The one-off costs were relatively low and focused on a small subset of firms, while the benefits included enhanced client protection, transparency, and market confidence. The policy is considered to have a positive net impact over the long term.