Grath’s Post

Transcript

Give over to cast concepts. Now I am by no means an expert in case, but I certainly feel that over the past few years, as we're talking more and more about best practice in the market around safeguarding requirements, the cast concepts are coming up more and more. And if I'm going to put my hand up and completely admit it, I can get a bit confused sometimes around some of the difference in the jog and the concepts are very similar. It's all about. Identifying what is client money and keeping it separate from your own. I mean, generally speaking, that's the crux of it. But there are lots of different terminologies and slightly different processes between safeguarding and cast. And I think it would just be a really helpful process to maybe demystify some of that jargon that surrounds Cass at the moment. And so, Paul, if I can maybe hand over to yourself 1st and maybe talk us through picking off the slide as a couple of examples there. Trust for us, please. Yeah, thanks Heather. I think trust is it definitely crosses both regimes. You know the, the, the, the central basis of segregating client or client assets or safeguard, safeguard funds is essential to the FCA's objectives to ensure clients monies are kept safe at all times. Obviously trust is, is what it is. It's, it's, it's based within statutory. Law and it's it's practically embedded through Cass specifically through the use of client bank accounts, client money bank accounts or client transaction accounts and then secondly through safeguarded accounts. And the trust ensures that there's a a legal a legal protection around those accounts that can resist claims from creditors in the event that a firm goes insolvency and you know it's. About mindset that I think payment service firms need to consider where they stand in regard of their safeguarding protections. Cast firms certainly are perhaps a little bit more further along the line in that respect and they they operate very much in a gone concern mindset. So I think it's very important from the outset for firms that leverage safeguarding accounts to have those, those, those trust protections in place. I've got moving on sort the concept. Well, sort of taking on this banking idea. I mean, commingling is certainly a word that we see used in the approach document from a safeguarding perspective. Would you say that that's something that very much is in line with Cass or is that something that you think is a slightly different definition? No, I think it's the same principle, Heather. I think I think it extends beyond that legal segregation or that that that that control that's based within trust and you know makes that a physical control firms ensuring that they keep own monies. Very separate, highly segregated and separate from from from client monies or client funds. And above all, make sure making sure that those records are kept up to date and completely accurate at all times. You know, and again it's, it's considering that going concern concept again where you know, under, under, under an insolvency. Situation. If you've got commingled funds within, within a bank account, that could inadvertently allow creditors access to client funds or monies through the firm's own assets and, and you know, make those, make those make those funds available to creditors in the event of an insolvency position.