Skilled Person Report to assess a firm’s CASS systems and controls

The FCA had challenged the Firm on its controls around Custody Assets and specific elements of its contracting arrangements with counterparties as well as the overall skills and knowledge of CASS requirements.

We performed a review of the Firm’s Controls under CASS 6 (Client Assets) to assess its reconciliation processes and the nature of its contracts with custodians and clients. We further reviewed the Firm’s acknowledgement letters to assess compliance with CASS 7. We considered both the processes as documented and the rigour of the infrastructures used to perform CASS activities.

In addition, we reviewed the Firm’s arrangements for CMAR reporting and tested the experience and knowledge of CASS amongst the Firm’s management and operational staff.

We identified some anomalies with the Firm’s contractual arrangements, particularly with international custodians, with the Firm making changes to its arrangements in this regard. We also recommended some more administrative enhancements that would facilitate more effective documentation of the Firm’s CASS systems and controls.