Firms that are subject to CASS may find the recent presentation given by Richard Sutcliffe, FSA Head of Client Assets Unit, worth reviewing as it serves to reinforce the FSA’s continuing interest in this area.
We are advised that there are now about 40 people working in the CASS Unit and that every single external audit received is read, logged and scored for risk. Similarly, every CMAR submission is automatically assessed for risk, with a series of alerts to highlight potential problems.
As for what CASS firms should consider, we are informed that inadequate trust acknowledgement letters (CASS 7.8) continue to be a source of breaches; it will be recalled that the absence of trust status letters was at the core of the recent £9.5m penalty imposed upon BlackRock Investment Management (UK) Ltd – see Regulatory Roundup 44. A plea is also made to CF10as for them to work with the CASS Unit by way of approaching them with any problems and engaging in policy consultations – the consultation period is still open in respect of CP12/22 Part II and Part III: details can be found in Regulatory Roundup 44. As an incentive, we are reminded that a CF10a should take their responsibilities seriously – and will be held to account where they do not.
The closing comments confirmed that compliance with the CASS rules is a regulatory priority, and will remain so in the future FCA, and we are told that the Unit will “visit more firms” and will “return to some we have already seen”.