Introduction to Client Assets
The protection of client assets is a key priority of the Central Bank of Ireland (the “Central Bank”). The purpose of the client asset regime is to safeguard client assets by ensuring firms adhere to general principles and prescriptive requirements in this regard. The objectives of the client asset regime are: (1) maintaining public confidence in the client assets regime; (2) minimising the risk of loss or misuse of client assets by authorised entities; and (3) in the event of the insolvency of an entity, enabling the efficient and cost effective return of those assets to clients
In August 2011, the Central Bank commissioned a task force to review the regulatory regime for the safeguarding of client assets. There were a number of drivers for this review: the roll out in 2012 of the Central Bank’s new supervisory risk model (PRISM); experience of cases both in Ireland and elsewhere where client asset issues have arisen; pending changes to European directives and feedback from industry that the current rules for the safeguarding of client assets should be reviewed. On 23 March 2012, the Central Bank published the ‘ Review of the Regulatory Regime for the Safeguarding of Client Assets. The report outlined key recommendations for implementation. A number of these recommendations have been included in the revised Regulations.
Overview of the Client Asset Specialist Team (CAST)
CAST was established in July 2012 following a recommendation in the ‘Review of the Regulatory Regime for the Safeguarding of Client Assets’ report. CAST has cross-sectoral ownership within the Central Bank for client asset risk. The primary role of CAST is to supervise and inspect client asset arrangements and monitor the risks to the safekeeping of client assets in relevant firms. It undertakes both routine client asset/investor money supervision and also carries out non-routine investigative work both on-site and off-site in respect of client assets/investor money.
Publication of Client Asset Regulations and Investor Money Regulations
The Central Bank published two new sets of regulations on 30 March 2015 with regard to the safeguarding of client assets and investor money. The publication of these regulations follows a lengthy industry consultation period, particularly with the Funds industry. These new regulations are:
The Client Asset Regulations are effective from 1 October 2015.
The Investor Money Regulations are imposed, for the first time, on fund service providers holding investor money in collection accounts; the Investor Money Regulations are effective from 1 July 2016.
Client Asset Regulations - Industry Presentation Slides and Notes 4 June 2015
Investor Money Regulations - Industry Presentation Slides and Notes 20 May 2015
IMR Reporting Obligations
The Central Bank has published guidance on how to report breaches and other reportable matters through the Online Reporting System - June 2016 - IMR Reporting Guidance
Please also see link to the reporting template
For general Client Asset / Investor Money queries, please contact:CAST@centralbank.ie.