Whilst on the subject of client money, ActivTrades Plc, a broker specialising in FX, CFDs and futures, has been fined £85,750 for client money failings.
Firms that hold client money may wish to review the Final Notice in the light of their own processes and procedures. In addition sections of the Notice are relevant for firms that do not hold client money.
Areas highlighted in the Final Notice include failure to demonstrate due diligence, and periodic review, in the selection of institutions where client money is deposited (the Notice refers to them as ‘well recognised financial institutions’); co-mingling of client and corporate money; performing monthly rather than daily reconciliations; not being able to provide documentation that supported the reconciliations; and not paying interest on client money balances (this affects retail clients – see CASS 7.2.14R).
Two other areas worthy of note could be applied to activities other than client money: a failure to have specific procedures in place and inadequate management information being supplied to the Board.
