Direction. 3. The FCA directs that the rule listed below applies to the firm with the modification shown:

Transcription

1 Direction To: Henderson Investment Funds Limited (the firm") Ref: Of: 201 Bishopsgate London EC2M 3AE Date: 19 th November 2015 Handbook Version as in force at the date of this Direction Power 1. This direction is given by the FCA under section 138A of the Act. Duration 2. (1) This direction takes effect on 30 October Rule modified (2) This direction ends on 31 March The FCA directs that the rule listed below applies to the firm with the modification shown: Rule CASS R Modification Money ceases to be client money (having regard to CASS R where applicable) if: (1) it is paid to the client, or a duly authorised representative of the client; or (2) it is: (a) paid to a third party on the instruction of, or with the specific consent of, the client unless it is transferred to a third party in the course of effecting a transaction under CASS R (Transfer of client money to a third party); or (b) paid to a third party pursuant to an obligation on the firm where: (i) (ii) that obligation arises under an enactment; and the obligation under that enactment is applicable to the firm as a result of the nature of the business being undertaken by the firm for its client; or (c) transferred in accordance with CASS R; or (d) transferred in accordance with CASS R; or (3) subject to CASS R, it is paid into a bank account of the client (not being an account which is also in the name of the firm); or 1

2 (4) it is due and payable to the firm in accordance with CASS R (Money due and payable to the firm); or (5) it is paid to the firm as an excess in the client bank account (see CASS R (2) (Reconciliation discrepancies)); or (6) it is paid by an authorised central counterparty to a clearing member other than the firm in connection with a porting arrangement in accordance with CASS R; or (7) it is paid by an authorised central counterparty directly to the client in accordance with CASS R; or (8) it is transferred by the firm to a clearing member in connection with a regulated clearing arrangement and the clearing member remits payment to another firm or to another clearing member in accordance with CASS R (1); or (9) it is transferred by the firm to a clearing member in connection with a regulated clearing arrangement and the clearing member remits payment directly to the indirect clients of the firm in accordance with CASS R (2); or (10) it is paid to charity under CASS R or CASS R. CASS G Transfer of business A firm may transfer client money to a third party as part of transferring all or part of its business if, in respect of each client with an interest in the client money that is sought to be transferred, it: (1) obtains the consent or instruction of that client at the time of the transfer of business (see CASS R (2)(a); or (2) complies with CASS R (see CASS R (2)(c); or (3) complies with CASS R (see CASS R (2)(d)). CASS R Subject to CASS R, money ceases to be client money for a firm if the firm complies in every case with conditions (1) and (2), and also complies with, as the case may be: conditions (3) and (4); or condition (5); or condition (6); namely that: (1) it is transferred by the firm to another person as part of a transfer of business to that person where the client money relates to the business being transferred; (2) it is transferred on terms which require the other person to return a client's transferred sums to the client as soon as practicable at the client's request; (3) a written agreement between the firm and the relevant client provides (a) the firm may transfer the client's client money to another person; and (b) (i) the sums transferred will be held by the person to whom 2

3 they are transferred in accordance with the client money rules for the clients; or (ii) if not held in accordance with (i), the firm will exercise all due skill, care and diligence in assessing whether the person to whom the client money is transferred will apply adequate measures to protect these sums; and (4) the firm complies with the requirements in (3)(b)(ii) (if applicable). (5) the firm: (a) reasonably believes that it has current contact details for the client; (b) sought the client s consent under CASS R (2)(a) because CASS R (3) does not apply; (c) gave notice to the client by at least one letter to the client, one letter to that client s adviser, a notice on the firm s website and at least one advertisement in a UK national newspaper; (d) does not receive from the client the consent sought within three months of each of the notices in (c); and (e) obtains from the intended transferee of business an undertaking that the transferee will hold the transferred money as client money and in accordance with the client money rules. (6) the firm: (a) reasonably believes that it does not have current contact details for the client; (b) has used best endeavours to trace the client; and (c) obtains from the transferee of the business an undertaking to use best endeavours to trace the client. CASS G In considering how and whether to introduce the written agreement referred to in CASS R (3), firms should have regard to any relevant obligations to clients, including requirements underthe Unfair Terms Regulations. CASS R Transfer of business: de minimis sums (1) Client money belonging to those categories of clients set out in (2) and in respect of those amounts set out in (2) ceases to be client money of the firm if it is transferred by the firm to another person: (a) as part of a transfer of business to that other person where these sums relate to the business being transferred; and (b) on terms which require the other person to return a client's transferred sums as soon as practicable at the client's request. (2) (a) For retail clients the amount is 25. (b) For all other clients the amount is

4 CASS G For the avoidance of doubt, sums transferred under CASS R do not, for the purposes of that rule, require the instruction or specific consent of each client at the time of the transfer or a written agreement as set out in CASS R (3). CASS R Transfer of business: client notifications (1) Where a firm transfers client money belonging to its clients under either or both of CASS R and CASS R it must, unless CASS R (2) applies, ensure that those clients are notified no later than seven days after the transfer taking place: (a) whether or not the sums will be held by the person to whom they have been transferred in accordance with the client money rules and if not how the sums being transferred will be held by that person; (b) the extent to which the sums transferred will be protected under a compensation scheme; and (c) that the client may opt to have the client's transferred sum returned to it as soon as practicable at the client's request. (2) Where a firm intends to transfer client money belonging to its clients under either or both of CASS R and CASS R and it reasonably believes that it does not have current contact details for certain clients, the firm may not transfer the client money unless: (a) it has used best endeavours to trace each client but has not successfully traced each client; and (b) the intended transferee of the business has undertaken to the firm to use best endeavours to trace each client; and (c) the intended transferee of the business has undertaken to the firm that if successfully traces any client whose client money has been transferred, it will notify that client of the matters specified in CASS R (1) (a), (b) and (c) within 28 days of the successful trace. CASS R The firm must notify the FCA of its intention to effect any transfer of client money under either or both of CASS R and CASS R at least seven days before it transfers the client money in question. 4

5 Condition(s) 1. The transferee of the client money must be Henderson Investment Funds Limited ( HIFL ) and/or The Share Centre. 2. The firm that transfers the client money must be Henderson Global Investment Limited ( HGIL ). 3. The transfer of client money must take place between 10 October 2015 and 31 March Where the client money is held in an ISA, HGIL must ensure that the transfer of that money complies with the Individual Savings Account Regulations 1998 (as amended). 5. Subject to Condition 6, HGIL must ensure that all unclaimed client money transferred to HFIL and/or The Share Centre is promptly paid away to a registered charity in accordance with CASS R to CASS G from the time those unclaimed client money balances reach 6 years dormancy, including the period it has been held with HGIL. 6. Where the client money is held in an ISA, HIGL must ensure that client money is not paid away to charity if this would prejudice the client s right to tax advantages normally arising from an ISA. 7. HGIL must ensure that HIFL and/or The Share Centre carries out the steps described in CASS E (1) (a), (b) and (c) as part of the transferee s attempt to trace each client. Interpretation 5. Interpretative provisions (including definitions) of the Handbook apply to this direction in the same way they apply to the Handbook. Caroline Hall Waivers Team Authorisations 5