CASS audits have changed over the past few years. They have shifted from substantive sample testing methods to a more control-based approach.
This is widely considered more proactive because it challenges the suitability of critical controls underpinning a firm’s operational process. In past instances of CASS breaches – or where control has proved weak and inefficient – remediation action has been crucial to enhancing
the existing control framework.
This is particularly important for FCA-regulated firms that hold money on behalf of clients as they must comply with the client money rules in chapter 7 of the FCA handbook.
CASS 7 summary
The client money rules state that a firm must maintain complete and accurate books and records. They should be able to distinguish between money held for each client and be able to distinguish client money from its own money.
One often overlooked aspect of CASS 7 compliance is reconciliations. Perhaps the purest form of control, a reconciliation flushes out instances of breaks caused by error – made either by the firm itself or a third party.
But, due to the manual nature of many reconciliations, firms often do not have the time or resources to investigate the root cause of reoccurring breaks. As a business grows, legacy issues persist and eventually form part of business-as-usual processes within regulatory reconciliations.
Our whitepaper provides an overview of CASS 7 client money rules and looks at key challenges firms face when meeting CASS 7 obligations – such as risk issues, lack of complete data, break ageing and break treatment.
To help your firm overcome these challenges, the experts at AutoRek have set out the best practices for key CASS 7 functions, including:
- Data entry
- Enrichment
- Validation
- Matching and labelling
- Reporting and management
- Sign-off and record retention
To access this resource, please complete the short form provided.