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FCA’s asset rules are 'significant' policy shift
11 June 2014
The UK regulator’s extensive changes to rules on client assets is expected to improve confidence in the local financial markets
client asset rules
Market participants have dubbed the UK Financial Conduct
Authority’s (FCA) new rules on regulation of
client assets as a major policy move that will improve the
protection of the UK financial markets.
The regulator unleashed an extensive overhaul of its rules on
how money and assets of investment firms’ clients
are held and protected.
"The FCA’s new policy statement on client assets
marks the most significant policy shift in recent years," said
Anne Simpson, partner in PwC’s Financial Services
Risk and Regulation practice.
"Protecting clients’ money and assets remains a
key priority for the FCA. The FCA has undertaken a
fundamental rethink of the regime, and the new rules should go
a considerable way in enhancing confidence in UK financial
The FCA is keen to avoid the problems investors experienced
during the insolvency of Lehman Brothers and the failure of MF
Simpson added: "As the failure of Lehman Brothers demonstrated,
the current rules are not fit for the complexities of
today’s financial markets. Auditors will play a
stronger role in confirming that firms are complying with the
FCA’s client asset rules."
The FCA also plans to do more work later this year on improving
the speed of returning assets to customers when a firm becomes
Firms that fall under the client asset rules need to act now to
stay ahead of the game, according to James Steele-Perkins,
director in PwC’s Financial Services Risk and
"Although most rules will be subject to transitional
arrangements, the hard work for FCA-regulated firms begins
today. Some new rules come into effect July 1, with the rest
becoming effective in December 2014 and June 2015.
"The short timetable for implementation will put pressure on
firms to assess the impact on their business and understand how
their strategy and operations are affected by these significant