CASS Chapter 1 Application Where & What - Articles 1.3.1-1.4.5

Client Assets – Territorial Limits 1.3.1-1.3.4

Apart from the exceptions stated earlier CASS applies to all firms conducting regulated activities with an establishment in the UK.  Further, those firms (except an insurer) with a branch operating in another EEA state are also subject to CASS.  There is reference to passported activities and these are those activities allowed by the relevant EEA treaties and directives, this will be the majority of those activities that a firm carries out.  The regulated activities in general terms cover the handling of money, mortgages, investments and the advice given regarding such handling.  To give an idea of the diversity most financial institutions will be subject to it but also firms such as food retailers that have diversified into financial products will also be subject to it.

CASS does not apply to an incoming ECA provider acting as such.  What this means is that a firm that has an establishment in another EEA state (not in the UK) but that is providing a service to clients in the UK is not subject to CASS.  This would appear to recognise the lack of sovereignty over firms providing a service from overseas.  It does not clarify whether the same applies to firms operating from out with the EEA, one presumes that CASS does not apply to them either.

The above two paragraphs summaries Rules.

Client Assets - Applicable Particular Activities 1.4-1.4.5

CASS applies to Occupational Pension Scheme Firms, where the customer is the Occupational Pension Scheme or Welfare Trust and the firm acts or intends to act for the benefit them.  IF CASS requires information be provided to or consent from OPS’ or Welfare Trusts then the OPS firm is to do so to all trustees unless the context requires otherwise.  This Rule covers the requirement of an OPS firm to ensure it has fully informed or obtained the consent from those responsible for acting as the trustees of an OPS or welfare trust. But, context may require a different approach.

The following aspects are prefixed as Guidance.  In the case of stock lending with or for clients, corporate finance business and oil & energy market activities, the custody and money chapters apply. Where relevant the collateral rules apply.   Although CASS does not apply directly to a firm’s appointed representative or tied agents the activities they undertake are done so as if the firm had undertaken the activities themselves.  In other words there can be no escaping liability by virtue of having outsourced their activities to third parties.  Reference to links on appointed representatives and tied agents is recommended.  Reference is also made to SUP 12 which details the requirements firms must adhere to with regard to appointed representatives and tied agents.  Note that SUP 12 is rather large and comprehensive and therefore only go into detail if needed.