Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Collateral definition

What does Collateral mean? Collateral describes the assets or rights a borrower (or a third party) provides to a lender to create a security interest securing repayment or performance. If the borrower defaults, the secured creditor can enforce against the collateral to satisfy the debt. The term is a descriptive commercial expression rather than a single statutory definition. However, “financial collateral” is defined in the Financial Collateral Arrangements (No. 2) Regulations 2003 (UK) and the European Communities (Financial Collateral Arrangements) Regulations 2010 (Ireland). Collateral commonly includes land, plant and machinery, shares, bank accounts, receivables, intellectual property and cash. Security is typically taken by mortgage...

FCA CASS 3 and 8 on Mandates and Collateral: Scope, Brexit Changes, TTP/TPR/FSCR and Record-keeping

Published by a LexisNexis Financial Services expert

Practice notes

Scope of this Practice Note

This Practice Note outlines the authority a firm may receive to handle a client’s assets, with or without transferring title to those assets. It focuses on the Financial Conduct Authority’s (FCA) requirements in the Client Assets Sourcebook (CASS), specifically chapters 3 (collateral) and 8 (Mandates). Where a client:

authorises a firm, via a mandate, to act in relation to their assets without passing ownership
provides a firm with an asset as security to secure an obligation owed to the firm, i.e. supplies collateral

the firm is not subject to the client money rules or the custody rules. The applicable provisions in each scenario are uncomplicated, centring on accurate records and exercising the proper rights over the assets.

Impact of Brexit on CASS and the FCA’s powers and requirements

Following the decision to leave the EU, the UK government ‘onshored’ and retained most EU and EU-derived legislation as it existed immediately before the UK’s departure...

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Web page updated on 21/05/2026

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