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FCA Accountants for regulated Financial Services companies

FCA and PRA regulated businesses are undergoing significant changes. In a market of increased regulation, it’s important to keep up-to-date and compliant with directives that are imposed. As experts in advising finance professionals and as specialised FCA Accountants, we understand the impact of these regulatory frameworks.

We also appreciate the obligations surrounding VAT and how best to meet them. Careful planning and allocation of resources are key. Whether it be registering for VAT, determining the VAT liability or managing the evidence HMRC requires, our specialist team is well positioned to handle the entire process and ensure full compliance.

Providing tax planning and efficient business structure advice is fundamental to our services, whether it’s for short-term tax savings or building a longer-term investment base. Our wide-ranging experience across the financial services sector helps you to manage financial, operational and regulatory risk.

CASS classification

Your CASS firm type (small, medium or large) is based on the size of your client money and/or custody asset holdings.

Your firm must make an annual notification about the money and assets you hold to identify if you are small, medium or large. This will enable you to see what your classification is.

CASS small firms don’t need to complete a Client Money and Asset Return (CMAR) however a 6 month Gabriel return is needed.

What must CASS medium or large firms do?

If your firm is a CASS medium or large firm holding client money equal to or over £1 million and/or assets equal to or over £10m, you must:

  • complete a CMAR
  • make a director or senior manager responsible for CASS (CF10a or SMF18)

Completing a monthly Client Money and Asset Return is done monthly via Gabriel (the FCA online system for collecting and storing regulatory data from firms). This gives an overview of your client money and safe custody assets.

CASS compliance

Our CASS auditors have the required skills, resources and experience to produce and audit client asset reports, providing assurance on how client money is being looked after. With thorough understanding of the Client Asset Sourcebook (CASS) rules, the FRC standard, and close working relationship with the FCA we can provide robust assessments of CASS compliance.

The increased testing has created an increase in compliance cost for CASS firms. Given the increased costs, it’s ever more important that firms get value from the assurance process.

Whilst there are 13 sections of the sourcebook, there are three main CASS rules likely to affect your business. CASS 5, CASS 7A and CASS8.

The FCA have indicated they will be focusing on reports provided by audit firms who undertake very limited numbers of CASS assurance reports each year. With this in mind, a clean report from a firm who only completes a handful of audits a year might prompt as many questions from the regulator as one reporting breaches.

  • Regulator focus areas
  • Internal custody reconciliations
  • Mandates
  • Outsourcing and offshoring

The Regulator is expecting to see an increase in Qualified and Adverse reports following adoption of the Standard, as a result of more breaches being reported.

CASS 5 – Client money: insurance mediation activity

At HWB we can offer advice and support to insurance intermediaries ensuring they meet the requirements of CASS 5. Our team of specialist advisors can recommend the best route for your business and ensure you are meeting all requirements relating to CASS 5, including client money reconciliation and providing proof of your client money requirement.

We provide flexible and scalable audit solutions and can assist in your preparation for CASS 5 audits of client money. With continual training our team keeps your business ahead of the game as the FCA continues to increase regulation.

CASS 7A – Client money distribution

CASS 7A looks at client money distribution rules in order to provide a mechanism under which client assets can be returned to clients in the event of investment failure. Our specialist team will work with you to ensure you have the necessary operational processes and controls in place to comply with these CASS rules.

CASS 8 – Mandates

A mandate will give permission from a client allowing you to manage money on their behalf, and providing you have one in place you will not need to comply with CASS 5 or 7. By implementing a CASS 8 mandate, you can give instructions in relation to the money or assets of a client without their involvement.

However, in order to do so in a compliant form, our specialist team will help you record each transaction entered into and provide a detailed record of the mandates including conditions and limitations that may apply.

How the client rules affect your company

Falling foul of FCA requirements can lead to firms incurring large punitive fines, disciplinary actions and reputational damage. The FCA comes down hard on any non-compliance.

How we can help

Our CASS team can support you in a number of ways, whether you’re new to client assets or have previous experience.

External Audit

Our audit team can help you meet your regulatory requirements under the Supervision Manual.

Advisory

Our team can offer you support and guidance to assist you when documenting your interpretation of the rules, reviewing your controls against the requirements and can undertake a CASS health check, making recommendations on best practice.

For more information on our services for FCA and PRA Regulated Businesses, contact Michaela Johns on 023 8046 1256.

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Why not arrange a FREE consultation and find out what we can do for your business.