Does CASS 7 pool identifiable client money wherever found or only segregated client money?
(3) Do clients participate in the pool if they have claims to client money or only if they have contributed to the pool? and (4) When does money which the firm owes to client become client money? Issue 1 – Did the statutory trust come into effect when LBIE received client money, or only when it segregated those funds? It was common ground at the appeal that, under CASS 7.7, client money in a segregated account is held on trust. The question to be determined by the court was whether the trust took effect immediately upon receipt or only upon segregation of that money. Read literally, the definition of client money in CASS 7.2.1 supports the conclusion reached at first instance to the effect that the statutory trust operates from receipt. The Appeal Court judges looked at the requirements of the MiFID directives on which much of CASS 7 is based and, while they understandably found no specific reference to a trust, their reading of Article 13(8) of MiIFD required CASS 7 to provide for a t
