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FCA pursues new strategy over CASS

Chris Hamblin, Editor, London, 6 September 2016

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The British Financial Conduct Authority has developed a new 'proactive' supervision strategy for general insurance intermediaries as regards its 'client money' rules that are found in its Client Assets Sourcebook (CASS).

The new strategy is the upshot of its review of audit reports from approximately 400 firms. Its details, however, have yet to be made public.

It has also come up with a new reporting requirement applicable to general insurance intermediaries who hold 'client money' (RMA-C) in its drive to collect more information from these firms. The FCA was unable to say whether these initiatives were fully underway by press time.

Generally speaking, according to the FCA, 'client money' is money that a firm receives and holds for its clients in the course of carrying out investment business or insurance mediation activity.

The initiatives are a belated postscript to the FCA's decision in 2012 to review its 'client money' rules for insurance intermediaries. It published a consultative paper on the subject (CP12/20) in that year under its old name, the Financial Services Authority. The paper has been gathering dust since then and the FCA has promised not pursue any rule changes to CASS 5 (chapter 5 of the sourcebook) without consulting interested parties anew.

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