The Central Bank of Ireland has published a consultation paper on client asset regulations and guidance, which will replace the existing client assets requirements (issued 1 November 2007).
The main aspects of the revised client asset regime are as follows:
- The regulations are based on seven client asset core principles which reflect the fundamental obligations on all firms holding client assets.
- Fund service providers, will for the first time be subject to client asset regulations in respect of client funds held in collection accounts.
- The daily calculation will be expanded to include the margin transactions for investment firms writing margin transactions.
- The regulations do not permit a firm to maintain any asset other than client assets in a client asset account/collection account.
- Firms will be required to appoint an individual to a client asset oversight role which will be a pre-approved control function, appointed under Part 3 of the Central Bank Reform Act, 2010.
- Firms will be required to create, document and maintain a client asset management plan in order to safeguard client assets.
The regulations and guidance aim to enhance the Central Bank’s client asset regime by minimising the risk of loss or misuse of client assets while a firm is a going concern and in the event of the insolvency of a firm, to return those assets to clients as efficiently and cost-effectively as possible. The closing date for submissions is 31 December 2013.
Contributed by Nicola Doran