FSA continues its crackdown on client assets rule breaches

The FSA has continued its robust approach to tackling breaches of its client assets rules and has recently fined Towry Investment Management Limited £494,000 for providing misleading information to the regulator and certain client money breaches.

Very few asset managers actually hold, in a regulatory sense, the investment assets or cash of the funds or accounts they manage and incorrectly assume that they do not need to take any steps to protect themselves.

As a minimum, all staff should be aware of what is classed as client money and that the accounts of the regulated entity must not be used to facilitate any payments or receipts for clients. If any breaches do occur, they must be reported to the FSA immediately and corrective action taken.

For those firms which do have permission to hold client assets, the FSA's actions are a reminder to ensure that the Client Assets Sourcebook ("CASS") rules are being strictly followed.

Related news articles - for FSA regulated firms.