On 6 September 2012, the FSA published a consultation and discussion paper proposing changes to the client money and custody assets regime for firms undertaking investment business.  The paper is split into three parts:

   I.        A consultation on changes to the FSA’s client assets regime to bring them into line with EMIR’s segregation and portability requirements. 

II.        The introduction of proposals to permit investment firms to operate multiple client money pools that will be legally and operationally separate. 

III.        An overview of the FSA’s review of its client assets regime, focusing on ways to improve the regime in the event that an investment firm becomes insolvent.

The proposed introduction of client money sub-pools is considered by the FSA to potentially be the most radical change in the client assets regime in over two decades.

The deadline for comments on Part I is 16 October 2012, with comments on Parts II and III required by 30 November 2012.  The FSA anticipates the publication of a feedback statement on Part I during December 2012, with feedback on Parts II and III to be provided in the first half of 2013.