Tuesday, 10 June 2014 10:28
Money and custody assets rules change after regulator review
The Financial Conduct Authority has today finalised changes to the client money and custody assets rules.
These changes affect approximately 1,500 FCA regulated firms that carry out investment business, from the largest investment banks to the smallest investment advisor, who collectively hold over £100bn of client money and £10tn of custody assets.
Regulatory officials said that the rules addressed lessons learnt from recent insolvencies, feedback from firms themselves and observations from the FCA's specialist Client Assets Unit.
David Lawton, director of markets, said: "The protection of client assets is central to confidence in the UK markets and fundamental to consumers' rights and the trust they place with firms.
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"These changes will improve the protection offered to client assets and should speed up the recovery of client assets on a failure of a firm.
"Coupled with the increased focus the FCA has had on client assets, they will go a long way to ensure that confidence in UK markets is maintained and consumers are protected."
The extensive and detailed changes include a rewrite of the client money rules for investment firms and substantial amendments to the custody rules in the client assets sourcebook.
The changes will improve firms' systems and controls around segregation, record keeping and reconciliations and set out how investment firms must address client assets risks within their business.
The FCA added that it is not proceeding with most of the proposals it consulted on around the client money distribution rules.
These changes affect approximately 1,500 FCA regulated firms that carry out investment business, from the largest investment banks to the smallest investment advisor, who collectively hold over £100bn of client money and £10tn of custody assets.
Regulatory officials said that the rules addressed lessons learnt from recent insolvencies, feedback from firms themselves and observations from the FCA's specialist Client Assets Unit.
David Lawton, director of markets, said: "The protection of client assets is central to confidence in the UK markets and fundamental to consumers' rights and the trust they place with firms.
{desktop}{/desktop}{mobile}{/mobile}
"These changes will improve the protection offered to client assets and should speed up the recovery of client assets on a failure of a firm.
"Coupled with the increased focus the FCA has had on client assets, they will go a long way to ensure that confidence in UK markets is maintained and consumers are protected."
The extensive and detailed changes include a rewrite of the client money rules for investment firms and substantial amendments to the custody rules in the client assets sourcebook.
The changes will improve firms' systems and controls around segregation, record keeping and reconciliations and set out how investment firms must address client assets risks within their business.
The FCA added that it is not proceeding with most of the proposals it consulted on around the client money distribution rules.
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