FCA consults on CASS change for unbreakable deposits

FCA is consulting on a change to CASS to help firms that are having difficulty placing deposits with banks because of a combination of a current CASS rule that prevents firms placing client money in bank accounts with unbreakable terms of longer than 30 days, while the banks say the cost of liquidity requirements associated with these accounts make them reluctant to provide them. FCA wants to take action to allow consumer funds to remain protected and avoid firms being unable to deposit them. It is consulting on changes to the 30 day rule, to allow firms to deposit an appropriate proportion of client money in an unbreakable deposit of a maximum of 90 days but to comply with certain conditions where the deposit is for between 31-90 days (including, for CASS medium and large firms, reporting this in their CMAR). FCA asks for comment by 1 November and plans to introduce the new requirements when the MiFID 2 amendments to its rules take effect.