CP24/20 – What Is The Role Of The Safeguarding Oversight Officer and What Are Their Responsibilities?

CP24/20 – What Is The Role Of The Safeguarding Oversight Officer and What Are Their Responsibilities?

Under the proposed CASS 15 rules, the FCA is seeking equivalence across the CASS and Safeguarding regimes in a number of areas. In this article we discuss the existing FCA expectations for CASS firms under CASS1A.3.1, CASS 1A3.1A and now, more recently, Payment Service and E-Money firms under CASS 15.2.2. These rules concern the appointment of a single director or senior manager with the responsibility of operational CASS compliance and system and control effectiveness.

The rules are near identical across both regimes and it’s important for firms to consider the activities under this role and the expertise and knowledge of the manager or senior staff member expected to assume such responsibilities:

The likely responsibilities of the Safeguarding Oversight Officer can be grouped as below:

CASS footprint:

• Perimeter assessment
• Scoping of applicable CASS rules

Technology and business process:

• Understand, document and be capable of imparting the systemic structure of the firms CASS touch points and be able to understand where client assets and relevant funds enter, progress and exit the firm’s operations
• Oversight of key outsourced processes/functions relating to the protection of client money, assets and safeguarded funds

Controls:

• Oversight and enforcement of sourcebook obligation mapping to CASS Sourcebook
• Second-line review and assessment of control frameworks that mitigate CASS risk

Reporting:

• Incident triage and evaluation
• Breach detection, remediation and reporting
• Regulatory submissions such as the CMAR and the proposed Safeguarding Return
• A primary point of contact for annual CASS and Safeguarding Audits
• A primary point of internal audit programmes concerning CASS and Safeguarding activities
• Notification events to the regulator

Governance:

• Implement and maintain a CASS culture
• Create and administer CASS & Safeguarding training
• Creation and maintenance of CASS KRI’s
• Materiality thresholds
• Policy approval

Reconciliations:

• Completion and sign-off of daily client money, safe custody assets and safeguarding requirements

Firms familiar with the current CASS rules will appreciate the diverse and broad range of skills and competencies required to perform this role and in readiness for the new interim rules, Payment Service and E-Money firms should prepare for the appointment of this role ensure that such a person can cover these broad activities and business processes.

Firms should look to automate the more repetitive activities referenced above, particularly where there is resource constraints in place. Speak to Grath today to discover how our technology can support your firm and the designated safeguarding oversight officer in fulfilling these responsibilities under the forthcoming regime change.