Businesses should ensure that these changes are consistent with their CAW adequacy policy; (7) Evidence of a strong link between the security transferred under a TTCA and the client`s liability should not exclude the existence of an appropriate guarantee against the client`s obligation. Investment firms could therefore continue to demand sufficient warranty, if necessary through a TTCA. This obligation should not prevent compliance with the requirements of regulation (EU) 648/2012 of the European Parliament and the Council and should not prohibit the appropriate use of the TTCA in the context of possible liabilities or deposits for non-clients. Article 16, paragraph 10 of miFID II was based on the fact that private clients are less likely to have the resources to understand and quantify this risk. . If the ACF approach results in a greater restriction on the use of TCCs by businesses, it would have benefits and costs for business customers. When a company requires its customers to hold cash and assets other than a TTCA, it reduces the credit risk that customers have for the business, but the higher costs it would face will, in all likelihood, be passed on to its customers. In addition, a company that does not offer money or secure asset retention to the client may require its clients to take administrative action, such as the active transfer of .B company.B cash and surplus assets. Also note, there is a kind of avocado (Causidicus mediocris) that irritates that a TTCA could recrit as a pledge, with apocalyptic consequences. A TTCA means that the customer is willing to pay against the company, that is, the risk that the company will not be able to repay the customer.
3. When applying security contracts relating to the transfer of securities, investment firms draw the attention of professional clients and eligible counterparties to the risks involved and the effects of a guarantee insurance agreement for Dener on the client`s financial instruments and funds. On July 24, 2020, the FCA issued a letter to the “Dear CEO” and reminded companies that practice in the wholesale financial markets (including countervailing and premium brokers) of their securities guarantee obligations (TTCA). (6) The 2014/65/EU Directive requires investment firms to protect their clients` assets. Article 16, paragraph 10 of the 2014/65/EU Directive prohibits companies from entering into guarantee contracts with private clients relating to the transfer of securities (TTCA) in order to guarantee or cover current or future obligations, effective or possible or prospective. However, it is not forbidden for investment firms to enter into TTCA with non-residential clients. As a result, investment firms may use the TTCA more often than reasonably to deal with non-residential clients, compromising the general client asset protection regime. Therefore, given the impact of the TTCA on corporate obligations to customers and to ensure that the protection and segregation rules provided for by directive 2014/65/EU are not compromised, investment firms should consider the adequacy of collateral arrangements for the transfer of securities used with non-residential clients with respect to the relationship between the client`s obligations to the company and the assets of TTCA. Businesses should only be allowed to use TTCA with non-residential customers if they demonstrate TTCA`s suitability to that customer and if they deiving the associated risks and the impact of the TTCA on its assets.
Businesses should have a documented process for using the TTCA. The ability of companies to close TTCs with non-retail customers should not reduce the need to obtain prior express consent from customers for the use of customers` assets.