On January 23, 2017, the FCA published a consultation paper on
proposed changes to the client money distribution rules in the
Client Assets Sourcebook of the FCA Handbook - CASS 7A - as a
result of the special administration regime review. The client
money rules govern how client assets are to be distributed by an
insolvency practitioner managing a failed investment firm. The
proposals focus on rule changes following the introduction in early
January 2017 by the Government of draft regulations to improve the
regime in line with the Bloxham Report's recommendations i.e.
The Investment Bank (Amendment of Definition) and Special
Administration (Amendment) Regulations 2017, the Amending SAR
The consultation follows the FCA's discussion paper
published in September 2016 which set out its proposed approach to
implementing certain of the recommendations of the Bloxham Report,
which recommendations aim to minimize the market impact of a failed
firm's entry into special administration. The FCA consultation
paper sets out a host of technical changes mostly relating to the
treatment of client money or client assets for firms
post-administration, but also include some other amendments of
compliance relevance. The consultation seeks input on the proposed
changes to the CASS rules as a result of the Amending SAR
Regulations, while also recognizing that not all firms that are
subject to the CASS rules are subject to the SAR Regulations. There
are also new proposals implementing changes to CASS in order to
better fit with the indirect clearing requirements of EMIR and the
incoming RTS under the Markets in Financial Instruments Regulation,
which have been adopted by the European Commission but have not yet
come into force. The FCA's proposals are relevant to all
regulated firms that hold custody assets and/or client money for
investment business, their clients, their banks and custodians and
CCPs and exchanges.
Responses to the FCA's proposals relating to the indirect
clearing requirements are due by February 23, 2017. Responses to
all of the other proposals are due by April 24, 2017. The FCA aims
to publish a policy statement containing final rules in summer
On March 7, 2017, it will be one year since the U.K. Financial Conduct Authority's senior managers and certification regime came into force, heralding a new era of personal accountability in the financial sector.
On January 31, 2017, the FCA published a final notice issued to Deutsche Bank AG and fined the bank Ł163 million for failing to maintain an adequate AML control framework between January 1, 2012 and...
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