CASS Fine

Another client money fine from the FSA with a £494,000 fine for Towry sends a strong message from the regulator that they will not tolerate errors in the handling of client money especially when you tell them nothing is wrong.  Somehow a response went to a Dear CEO letter saying they complied with the CASS rules when clearly there were significant problems.

This is all about segregation and timely reconciliations.  Although there was a surplus of money in the pot the reconciliation process had not clearly split out client money and firm's money and without accurate reconciliations there could have been delays in the event of a default.

Since Lehman's the FSA are concerned not only that client money is protected but that the records that support it are accurate to enable swift and easy resolution in the event of a default.  The new requirement to create recovery plans for client money will extend these requirements still further.

 

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