How does CASS relate to client assets for relevant firms?

Client Assets Sourcebook (CASS) is a critical component of regulatory frameworks within the UK that outlines how firms should handle client assets. Option B is correct because CASS encompasses the management of client assets and liabilities in a comprehensive manner. It sets out rules to ensure that client assets are protected and properly accounted for, covering a wide range of scenarios involving various types of clients, including individuals and institutions.

CASS requires firms to implement strong systems and controls to safeguard client assets from being misappropriated or mistakenly treated as the firm’s own. It provides detailed guidance on holding client cash and securities, ensuring that firms maintain proper records, conduct regular reconciliations, and comply with reporting requirements. This is essential for maintaining trust and transparency in financial dealings.

The other options do not capture the full scope of CASS. The framework is not limited to just retail clients, nor does it apply exclusively to eligible counterparties. Additionally, while internal reporting may be a part of the compliance process, CASS has a far broader focus that includes external safeguards for clients’ financial interests. Thus, the essence of CASS is about managing both client assets and liabilities, ensuring robust protection and transparency for all clients involved.