Since the collapse of Lehman’s and the other financial scandals of the noughties, European regulators have increased the pressure on regulated firms to do a better job of protecting client money.
In the UK, the Financial Conduct Authority (FCA) has been in the vanguard of that effort to improve the client money practices of asset managers, crowdfunders and others subject to its CASS rules. As a result, a raft of consultation and policy papers have set out broad principles and specific rules for what is required to protect client cash.
The New Significant Management Function
The FCA’s Senior Managers and Certification Regime (SM&CR) threatens career-ending consequences for failure to comply with the spirit and letter of CASS regulations. The SM&CR allows firms to split accountability for CASS compliance from its oversight. Responsibility for CASS must however stay with a one of the new Significant Management Functions (SMFs) with the likely candidates being Chief Operations Function (SMF24) or the Chief Finance Function (SMF2). The Significant Management Function may, if they wish, appoint a qualified person to the role of an operational CASS Oversight Function (CASSOF). However, they cannot “outsource” responsibility for CASS to this function.
Furthermore, the CASS audit regime implemented by the Financial Reporting Council’s (FRC) for reporting periods commencing 1st January 2016, is especially relevant as any non-compliance by a firm is much more likely to be detected and reported to the FCA.
The net effect of this new regulation leaves the Significant Management Function and the Operational CASS Oversight Function with nowhere to hide from their CASS challenges.
Cashfac’s CASS Accounting Hub
Cashfac’s CASS Accounting Hub can help. Our solution offers those in a Significant Management Function role the full functionality required to meet their CASS challenges. As fully listed in our new paper –[download title=”Accounting for CASS 7: How to meet the Operational Accounting Challenges for Client Asset Protection” file=”https://cashfac.com/wp-content/uploads/2017/10/Accounting-for-CASS-7-How-to-meet-the-Operational-Accounting-Challenges-for-Client-Asset-Protection-Cashfac.pdf” id=”3082″]Accounting for CASS 7: How to meet the Operational Accounting Challenges for Client Asset Protection[/download] – our Accounting Hub offers 10 key features to help firms achieve the operational real-time client money accounting control required for CASS 7 including:
1. Automatically performing the client money calculation
2. Facilitating prudent segregation
3. Being configurable to generate the chart of accounts and all the accounting entities