Key takeaways
- UK firms that hold money for others report it to the FCA through one of two main returns, depending on the rules they follow.
- CASS medium and large investment firms file the Client Money and Asset Return (CMAR) monthly, within 15 business days of month end. CASS small firms do not file a CMAR (SUP 16.14.1R).
- Payment and e-money firms safeguarding under CASS 15 file the monthly safeguarding return, REP027, within 15 business days of month end.
- Job descriptions and search terms often mix the names, for example REP-CASS; what matters is which rules the firm is subject to.
Two returns for two regimes
The FCA collects data on money and assets that firms hold for others through regulatory returns submitted on its RegData system. Which return a firm files depends on which client asset regime applies to it. Investment firms subject to the custody rules in CASS 6 and the client money rules in CASS 7 file the Client Money and Asset Return, known as the CMAR. Payment institutions and e-money institutions subject to safeguarding under CASS 15 file the safeguarding return, REP027, introduced by PS25/12.
Both returns are submitted through the FCA's RegData system and both are reviewed alongside the firm's audit reports. A return that is late, missing or inconsistent with the audit is likely to prompt questions from the FCA's supervisors.
The names cause confusion. Recruitment adverts sometimes ask for experience of REP-CASS returns, and people search for CASS returns when they mean either. A firm should start from the rules it follows, then identify the return.
| CMAR | REP027 safeguarding return | |
|---|---|---|
| Who files | Investment firms holding client money or custody assets | Payment and e-money firms that safeguard funds |
| Rules | CASS 6 and CASS 7; SUP 16.14 | CASS 15; SUP 16.14A |
| Frequency | Monthly for CASS medium and large firms | Monthly |
| Deadline | Within 15 business days of the reporting period end | Within 15 business days of month end |
| Content | Client money and custody asset balances, reconciliations, breaches, third parties | Safeguarding method, amounts, reconciliation outcomes, breaches |
What the returns share
Both returns report the same kind of information: how much the firm holds for others, where it is held, whether reconciliations were performed and what they found, and any breaches. Both are checked by the FCA against other data it holds and against audit findings. And both are only as reliable as the daily reconciliation records behind them.
The practical answer is to prepare each return from a monthly summary of the daily reconciliation records, reviewed by someone who did not prepare it. Any adjustment made at month end should be traced to a specific break and its resolution, so the return and the daily records always agree.
Firms that prepare either return from month-end spreadsheets, rather than from the reconciliations already approved during the month, often find the return does not agree with their daily records. That gap is visible to auditors and the FCA.
Firms that file both
Some groups contain both an investment firm and a payment or e-money firm, for example a wealth platform with an e-money wallet. Each entity files the return that applies to it. The group benefits from one reconciliation process that produces both: the same daily discipline, applied under CASS 7 for one entity and CASS 15 for the other.
Groups should also make sure the two returns tell a consistent story about shared infrastructure. If the same bank holds client money for one entity and safeguarded funds for another, both returns and both audits will refer to it, and the account designations and acknowledgement letters must be correct for each.
Safeheld produces the daily reconciliation records behind both returns and the figures each requires. See REP027 software, what client money is and the regulatory reporting calendar.
Frequently asked questions
What is the CMAR?
The Client Money and Asset Return, filed by investment firms that hold client money or custody assets under CASS 6 and CASS 7.
What is REP027?
The monthly safeguarding return filed by payment and e-money firms that safeguard funds under CASS 15.
What is REP-CASS?
An informal name sometimes used for client asset returns; firms should identify the return from the rules they follow.
When are the returns due?
Both are due within 15 business days of the end of the reporting period.
References
- FCA Handbook, CASS 7.15 Records, accounts and reconciliations
- FCA Handbook, CASS 15.8 Records, accounts and reconciliations
- FCA, PS25/12: Changes to the safeguarding regime for payments and e-money firms
About Safeheld
Safeheld reconciles client money every day, resolves every difference and prepares every regulatory return for sign-off, for regulated firms in the United States, the United Kingdom, the European Union, Canada, Australia, Singapore and Hong Kong. To discuss your operations, contact us at safeheld.com/contact.
This article is for general information and does not constitute legal or regulatory advice.