The Financial Services Authority (FSA) has published a consultation paper (CP 08/6**) in respect of a review of the provisions of the Client Assets Sourcebook (CASS). Following implementation of the Markets in Financial Instruments Directive (MiFID) on 1 November 2007, CASS was expanded from five to eight chapters and two separate regimes apply depending on whether firms conduct MiFID and/or non-MiFID business. The FSA is consulting on whether the two regimes can be merged, so that a single set of custody and client money rules would apply whether a firm was carrying on MiFID or non-MiFID business.

The draft amendments do not, at this stage, encompass chapter 5 of CASS, which deals with client money held by general insurance intermediaries. However, chapter 10 of the CP raises a number of questions on the understanding and application of CASS 5 by general insurance intermediaries. The FSA emphasises that the list of issues and questions is not exhaustive but says that it would welcome preliminary input from firms.

Comments on the consultation paper are invited, to reach the FSA by 30 June 2008.