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The Markets in Financial Instruments Directive II (MIFID II) Recital 52 states that ‘the requirements concerning the protection of client assets are a crucial tool for the protection of clients in the provision of services and activities. Those requirements can be excluded when full ownership of funds and financial instrument is transferred to an investment firm to cover any present or future, actual or contingent or prospective obligations.
The broad possibility may create uncertainty and jeopardise the effectiveness of the requirements concerning the safeguard of client’s assets. Thus, at least when retail client assets are involved, it is appropriate to limit the possibility of investment firms to conclude Title Transfer Financial Collateral arrangements as defined under Directive 2002/ 47/ EC of the European Parliament of the Council (4), to secure or otherwise cover their obligation.’
Increased consumer detriment can arise when authorised firms default or exit the market. Poor records and ineffective segregation procedures create a slower, costlier and more uncertain outcome for the customer and associated reputational damage to the Cyprus Securities and Exchange Commission (CySEC) and European financial markets. During times of economic uncertainty, there is a heightened risk of insolvency.
The Client Money and Asset Regime (CASS) is fundamental to the European’s strategy to ensure markets operate with integrity because:
- It secures an appropriate degree of protection for clients in the event of the firm going insolvent
- Protects and enhances the integrity of the European financial services systems
- Promotes effective competition in the interests of clients by setting a minimum standard of protection that allows for a competitive market in investment and custodial services
The course will cover the two training areas:
- MiFID II Safeguarding Client Money and Assets in Europe Part I: A holistic Oversight
- MiFID II Safeguarding Client Money and Assets in Europe Part II: Ensuring Operational Oversight
MiFID II Safeguarding Client Money and Assets in Europe Part I: A holistic Oversight
The Client Money and Asset (CASS) Regime is fundamental to maintaining the integrity of the market and protecting consumers, mainly where there is a heightened risk of insolvency and economic uncertainty. Firms must adequately assess and provide assurance that the firm’s CASS risks are monitored and mitigated.
The training area will assess what these requirements practically mean for firms, including:
- Describe the regulatory drivers behind the Safeguarding Regime
- Explain the scope of rules and guidance including cross-jurisdictional impacts
- State the high-level requirements for the protection of Client Money and Assets
- Present an assessment of the practical implications of your firm’s CASS responsibilities, including, identification, segregation, maintaining records and controls and performing reconciliations
- Explore what meaningful management information and oversight required for board assurance.
MiFID II Safeguarding Client Money and Assets in Europe Part II: Ensuring Operational Oversight
The Markets in Financial Instruments Directive (MiFID II) made the protection of Client Money and Assets (CASS) a priority. The intensive and intrusive regulation allows the regulator to enforce hefty fines on the industry for the lack of appropriate management and oversight. Explaining Regulatory concerns regarding client money and assets in respect of insolvency and their relevance to European market integrity.
This training area will provide participants with an overview of the operational oversight framework required, including:
- Illustrate the European Principles and Objectives for CASS protection
- Demonstrate practical examples from National Competent Authorities (NCAs) enforcement and case studies
- Present the roles and responsibilities of the firm, specifically the part of the client asset officer and the Board
- Identification of the critical challenges of implementation and how to address operational risks arising; and
- Summarise the risks associated with third party agreements; service level agreements and management information
This course is designed to be participative throughout. The agenda will combine key formal presentations, case studies and group discussion sessions. There will be ample opportunity for participants to benchmark experiences with industry peers and raise issues of most concern to their organisation, either confidentially or in open session.
This programme may be approved for up to 5 CPD units in Financial Regulation. Eligibility criteria and CPD Units are verified directly by your association, regulator or other bodies which you hold membership.
Professionals requiring CPD units to meet the education requirements for CySEC licence renewal, and/or for maintaining other professional memberships/certifications which accept CPD in Financial Regulation and/or Accounting Standards, are advised to consider training subjects in categories that indicate CPD training in Financial Regulation.
Who Should Attend
This workshop will be of benefit to anyone who is likely to be affected by the changes to be brought in by MiFID II – Safeguarding of Client Assets, including senior management, legal, compliance and those.