We have published a Dear CEO letter for smaller firms and we have also published a report that contains observations from our recent firm visits to a range of investment firms and insurance brokers. This letter will require recipients to review their compliance with the Client Asset Sourcebook (CASS).

The report has the following key messages to firms:

• Customers must have confidence that their money and assets are safe and will be returned within a reasonable timeframe in the event a firm becomes insolvent.
• Customers must have confidence that firms holding their money and assets have strong management oversight and control over their business.

• We consider the protection of client money and assets to be a fundamentally important part of regulation and, as a result of the more difficult economic climate and our own findings we are intensifying our supervision in this area.

• We have taken steps to rectify procedures at firms that have fallen short of our requirements. Targeted supervision and regulatory intervention will continue throughout 2010.

The letter draws firms attention our concerns over their handling of client money and assets and the action we expect them to take to address these concerns.

For the full text of the letter see Letter to small firms.