An outline of the changes made to FSA's Client Assets sourcebook (CASS), which took effect (subject to one exception) from 1 January 2009.

FSA consulted on these changes in consultation paper 08/6, Review of the client assets sourcebook (CP08/6). The final rules and feedback to the consultation are set out in policy statement 08/10, Client assets sourcebook (Common platform provisions) instrument 2008 (PS08/10).

FSA adopted a principles-based approach to its review, with the removal of unnecessary guidance and, as far as possible, introducing a single regime for client assets based on (but not limited entirely to) MiFID requirements. In doing so, FSA sought to reduce any significant undue burdens on firms.

The recent financial crisis and the collapse of Lehman Brothers have revealed a number of serious failings in relation to firms' handling of client money and assets, and weaknesses in the FSA's current client assets regime. As a result, client assets is now one of the FSA's key supervisory priorities, and a number of initiatives are being undertaken by HM Treasury and the FSA to address these issues. For information on these developments, see Practice note, FSA reform of client assets regime (2008-11): thematic work and rules changes.