PS 14/09 December Deadline – What have you missed?

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Forgot Ever had that niggling feeling, as you set out on holiday, that you’ve forgotten something? Passports? Tickets? Toothbrush? With luck, it’s only something minor that can be sorted out at your destination. While it’s no holiday adventure, hopefully you have all your bags packed (project set up) for your PS14/09 implementation and nobody has left Kevin home alone i.e. you’ve got all the necessary team members. It’s still possible, though, that you’ve missed something, despite your detailed analysis of all those densely written reams of rules.

Here, as an early seasonal gift, is a short list of some of the things we think are at risk of being overlooked by many firms:

DVP Transaction Exemption Fall-Out

Many firms are finding they can no longer use this exemption. The good news is that this avoids the need to change terms and conditions for new clients. The bad news is that it does not mean business as usual from 1 December. It’s still essential to review accounting and custody arrangements along the settlement chain to ensure continuous protection – it is surprising how often one or more of these staging posts turn out to be unprotected, for example with a dealing account not set up as a client money transaction account. Additionally, reconciliations and funding procedures need to be considered for updates.

Non-standard reconciliation Methods

The most frequent issue we identify when working with clients is that they have a non-standard reconciliation method or two lurking, often in legacy business, which has not been signed off by auditors and notified to the FCA. The transition period for changing to the new processes and criteria around this only apply if that sign-off has taken place. So you may need to get on the phone to your auditors pronto!

Periodic Statements

It’s not a new requirement, but the FCA’s reminders in CASS 9 of the need to provide periodic statements covering clients’ assets and client money need to be heeded. Firms which only hold client money on exceptions, for example in relation to late settled trades, need to find a way to pull together this information at client level if they haven’t done so before and the deadline for this is effectively the next periodic statement date.

June or Soon?

There’s a bit of a theme with the above – many changes are happening sooner than headlines might suggest. Planning for June is actually planning for a series of deadlines along the way, including

  • Supplier deadlines for system and process changes
  • Periodic statements (for changes such as the above, or potential mailing of t&c changes)
  • ISA season (clashes to be avoided)
  • Board meetings (for decisions, undertakings and policy sign-off)

There’s a lot of detail to be considered – and further hidden surprises along the way – so do start to make a list – and check it twice.

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