What is a CASS Account?

A “CASS account” commonly refers to a bank account used to hold client money in line with the FCA's Client Assets Sourcebook. When certain regulated firms hold money that belongs to their clients, the CASS rules set out how that money must be kept separate, recorded and protected. They also provide a framework for its distribution or transfer if the firm fails. The rules do not guarantee that clients will recover their money in full.

CASS is the name of the rulebook, not a product. A "CASS account" is, therefore, a client money account operated in accordance with those rules. The chapter that matters most for cash is CASS 7, which governs client money received in connection with investment business and is where most of the practical requirements come from.

This guide explains what CASS accounts are for, who they apply to, and how the rules protect client money.

Who do the CASS rules apply to?

CASS applies to FCA-regulated firms that hold client money or assets in the course of their regulated activity. Investment firms and wealth managers holding uninvested client cash are typical examples, as are stockbrokers and platforms holding money on behalf of investors. Other firms that receive and hold client money can fall within scope too.

The rules are proportionate to the scale and nature of the client money a firm holds, so the detail varies from firm to firm. The core principles stay constant: segregation, accurate records and regular reconciliation.

How does a CASS account work?

The foundation is a legal one. Money that constitutes client money under CASS 7 is generally received and held by the firm on a statutory trust for its clients. This gives clients a beneficial interest in the client money and means that available trust property is not generally available to meet claims by the firm’s creditors if the firm fails. Around that trust sit the practical requirements that make the protection real:

• Segregation. Client money is paid into designated client bank accounts, kept separate from the firm's own money.
• Bank acknowledgement. The firm obtains written acknowledgement from the bank that the account holds client money and that the bank has no right of set-off or combination against it. Bank of London provides this acknowledgement as standard on the client money accounts it holds for firms subject to the CASS rules.
• Reconciliation. The firm carries out regular internal and external client money reconciliations, correcting any shortfall or excess promptly.
• Records. The firm keeps records showing how much client money it holds and each client's entitlement.
• Reporting and oversight. Medium and large firms submit a Client Money and Assets Return (CMAR) and are subject to a CASS audit.

Client money may be held in general client bank accounts for multiple clients or in designated client bank accounts forming a separate pool for one or more identified clients. In each case, the firm’s records must identify the relevant clients’ entitlements.

CASS accounts, trust accounts and safeguarding accounts

These terms are often used loosely, but they describe different things: a rulebook, a legal structure, and a separate regulatory regime, each of which protects customer money in its own way.

A CASS account is a client money account operated under the FCA's CASS rules. As set out above, client money in a CASS account is held on a statutory trust from the moment the firm receives it, which is what keeps it out of the firm's estate if it fails.

A trust account describes the underlying legal structure itself, rather than a specific regulatory regime: money held by one party (the trustee) for the benefit of another (the beneficiary). This structure underpins many commercial and family trust arrangements that have nothing to do with FCA regulation. See our guide on What is a Trust Account? for more detail on how that structure works and where else it's used.

A safeguarding account is the equivalent protection for e-money and payment institutions, under a separate regime, the Electronic Money Regulations and Payment Services Regulations, with supplementary rules made by the FCA under CASS 15. Depending on the safeguarding method used, relevant funds may be segregated in safeguarding accounts or protected through insurance or a comparable guarantee. This regime is distinct from the CASS 7 statutory trust applicable to investment client money. See our guide on What is a Safeguarding Account? for how that regime works in full.

Which one applies comes down to a firm's regulatory category and the type of money it holds, not the name on the account.

Why CASS accounts matter

The statutory trust is an important protection if a firm fails. Available client money is held for clients’ benefit and is not generally available to meet claims by the firm’s creditors. Recovery is not, however, automatic or necessarily complete. If the relevant client money pool is insufficient, the available money will generally be distributed or transferred rateably according to clients’ entitlements. Clients may have claims for any unrecovered shortfall, and eligible clients may also be protected by the FSCS, but full recovery is not guaranteed. Effective protection therefore depends on the firm’s segregation, record-keeping and reconciliation arrangements, as well as the arrangements and financial position of any bank or other third party holding the money.

CASS accounts at Bank of London

Bank of London provides client money accounts for firms subject to the CASS rules, held separately from the firm's own funds and supported by the written acknowledgement those rules require. The firm remains responsible for its own CASS compliance, including reconciliation and record-keeping.

Frequently asked questions

What does CASS stand for?

CASS is the FCA's Client Assets Sourcebook, the part of the FCA Handbook that sets out the rules for holding client money and custody assets.

What is CASS 7?

CASS 7 is the chapter governing client money. It sets out the statutory trust, and the segregation, acknowledgement, reconciliation and records requirements for cash held on behalf of clients.

Is a CASS account the same as a safeguarding account?

No. CASS accounts apply to investment and other firms under the CASS rules, while safeguarding accounts apply to e-money and payment institutions under separate regimes (i.e. the EMRs, PSRs and CASS 15 rules). Both protect customer money, but under different regimes.

Is client money in a CASS account covered by the FSCS?

Eligible deposits held in client money accounts may be protected by the FSCS if the bank holding the account fails. Where the applicable conditions are met, FSCS protection may be assessed by reference to the eligible underlying clients, subject to the compensation limit and aggregation of each client’s eligible deposits with the same PRA-authorised institution. This deposit protection is separate from the CASS protections that apply if the regulated firm holding the client money fails.

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