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CASS 9 – Client Asset Information: Disclosure and Transparency to Clients

PostedJune 23, 2025
UpdatedJune 23, 2025
ByAndy

1. Chapter Summary

CASS 9 sets out the rules firms must follow to provide clients with clear, accurate information about how their assets are held and protected. The chapter ensures transparency by requiring firms to disclose important details about client asset safeguarding arrangements, including risks and client rights. This disclosure helps clients understand the protections in place and the implications of custody or client money arrangements, supporting informed decisions and trust in the regulatory framework.

2. Applicability

CASS 9 applies to all firms holding client assets or client money under FCA regulation, including investment firms, custodians, and deposit takers. It covers information disclosure to all client types—retail and professional—and applies regardless of the type of client assets held.

3. Key Rules and Their Meaning

  • CASS 9.1.1R – Disclosure of client asset protection arrangements Firms must provide clients with clear, timely information explaining how client assets or money are protected under the FCA’s client asset rules. In practice: This means clients receive accessible descriptions of segregation, safeguarding, and insolvency protections.
  • CASS 9.2.1R – Timing and form of disclosure Information must be given at the start of the business relationship or when client assets are first held, and upon request thereafter. Nuance: The disclosure should be in a durable medium (e.g., paper or email) and understandable to the client.
  • CASS 9.3.1R – Content of disclosure Firms must explain:
    • the nature of client asset protection,
    • the risks (e.g., sub-custodian risk),
    • the consequences of firm insolvency, and
    • the client’s rights to their assets. Regulatory intent: This promotes client awareness of potential risks and protections.

4. Interpretation Notes / FCA Expectations

  • FCA expects firms to tailor disclosures to the client’s knowledge level and complexity of the arrangements.
  • The regulator emphasizes transparency and preventing misleading or overly technical disclosures that clients cannot understand.
  • Firms should update disclosures if safeguarding arrangements change materially.

5. Practical Considerations for Firms

  • Prepare clear, jargon-free client asset information documents or webpages.
  • Provide disclosures proactively before asset holding begins, and upon client request.
  • Keep records of disclosure delivery (e.g., signed acknowledgment or email timestamp).
  • Train client-facing staff to explain client asset protections clearly.
  • Review and update disclosure materials regularly, especially if custody arrangements change.

6. Related Handbook References

  • CASS 7 – Client asset record keeping and reconciliations
  • CASS 8 – Client asset mandates and authorisations
  • SYSC – Systems and controls regarding client assets
  • COBS – Conduct of Business Sourcebook, especially client communications

7. Regulatory Focus / Enforcement Risk

  • FCA closely monitors firms’ client asset disclosures as part of overall client asset protection reviews.
  • Failure to provide clear, accurate information may result in enforcement actions, especially where clients suffer loss or misunderstanding of risks.
  • Firms are expected to maintain high standards of transparency to uphold client trust and regulatory compliance.