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Client Assets

Safeguarding Client Assets: Protecting Ownership, Preserving Trust

Proper protection of client custody assets is a non-negotiable requirement under the FCA’s CASS 6 rules. It ensures that client investments remain safe, identifiable, and retrievable — even in the event of firm failure or insolvency. Mismanagement risks regulatory sanctions, reputational damage, and client detriment.

At CMAC, we equip you with the tools, guidance and real-world insight to help you maintain full compliance and operational control of client custody assets. Whether you are managing safe custody arrangements or overseeing internal controls as a CF10a, this page supports your role in upholding the highest standards of asset protection.

What Are Client Custody Assets?

Client assets are any financial instruments held by a firm on behalf of a client, including:

  • Stocks and shares (certificated or dematerialised)

  • Units in collective investment schemes

  • Debt instruments

  • Any other asset the client retains ownership of

Key Point: Firms must segregate and register these assets correctly, and reconcile them regularly to prevent loss or misuse.

FCA Handbook CASS 6 – View Full Rules →

Core Requirements Under CASS 6

  • Registration & Segregation: Client assets must be clearly identified and held separately from the firm’s own assets.

  • Custody Agreements: Formal arrangements must be in place with third-party custodians.

  • Title Transfer Clarity: Firms must clearly document any transfer of ownership.

  • Internal & External Reconciliations: Must be performed regularly and thoroughly documented.

  • Recordkeeping & Audit Trail: Firms must maintain complete, accurate, and up-to-date books and records.

[Download Our Client Assets Summary PDF →] (Download link)

Best Practice Guidance

1. Custodian Oversight

  • Due diligence for new custodians

  • How to monitor ongoing performance and compliance

  • Checklist for onboarding custody service providers

[Custodian Due Diligence Template →] (Download link)

2. Asset Registration

  • Maintaining proper records of asset ownership

  • Segregation options: omnibus vs. designated accounts

  • Avoiding commingling errors

[View Registration Models Overview →] (Internal page)

3. Reconciliations & Break Management

  • Key differences between internal and external reconciliations

  • Steps to resolve unreconciled positions

  • How to report and remediate reconciliation breaks

[Custody Asset Reconciliation Template →] (Download link)

4. Corporate Actions & Safekeeping

  • How to manage dividend processing and stock splits

  • Safekeeping principles and the importance of control over access

[Guide to Asset Servicing →] (Internal guide)

Managing Client Asset Breaches

CASS 6 breaches, while less common than client money breaches, can result in serious client detriment if not addressed quickly and effectively.

Use our tools to:

  • Identify issues such as overdrawn balances or mis-registered assets

  • Conduct root cause analysis and implement remediation

  • Maintain governance logs and regulatory reporting records

[Download Custody Breach Log & RCA Form →] (Download link)

Common Questions from Practitioners

Q: How often must firms reconcile client assets?
Q: What are the rules for non-UK custodians?
Q: What’s the difference between a title transfer and a custody asset?

[See Full Client Asset FAQ →] (Internal FAQ page)
[Submit a Question to the Forum →] (Forum link or contact)

Trusted Resources & Reference Material

[Browse the Full CASS Resource Library →] (Internal library)

Engage with the Community

Have an insight to share? Seen an approach that works? CMAC is your platform to learn, share, and raise standards together.

[Join the CMAC Community (Free) →]
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