Client Money is money that a Firm holds or receives for or from a client and can be of any currency. This could be in the form of cash, draft, cheque or electronic transfer and includes money held by the Firm as stakeholder, and which is not immediately due or payable on demand to the Firm for its own account.
What can be put into a client money account?
Client money (client balance) requirement
- (1) the amount paid by a client to the firm (to include all premiums); plus.
- (2) the amount due to the client (to include all claims and premium refunds); plus.
- (3) the amount of any interest or investment returns due to the client;
- (4)
- (5)
When can client money be placed in a client bank account?
There are many rules outlined in CASS 7. For example: Receiving, recording and banking client money: Client money should be paid into a client bank account as soon as practicable. Usually, this means the money should be in the client bank account by the following business day.
What is client money and assets?
You must follow rules set out in the Client Assets Sourcebook (CASS) whenever you hold or control client money or safe custody assets as part of your business. This is to keep client money and assets safe if firms fail and exit the market.
What is client money rules?
Client money is money which a firm holds or receives for or from a client. There are many rules that firms must follow to ensure they’re holding this money safely and legally. Client money must be held in the currency in which it was received unless the client instructs otherwise in writing.
What is client money calculation?
For the cash-based method, the client money resource should be calculated as the total of: (a) the balances of the firm’s client bank accounts, as at close of business on the previous business day; plus. (b) the value of client money held at third parties; plus.
Why do we segregate client money?
A firm must segregate client funds from those it holds in its own name. In doing this it must maintain records so that it may, within two business days of a request, demonstrate how much client money is held for every individual client.
What are the CASS rules?
A fundamental requirement of the CASS Rules is that firms must keep client money separate from firm money in segregated client money bank accounts and register custody assets appropriately. This ensures that client money and custody assets are ring-fenced in the event of the insolvency of the firm.
What is client money reconciliation?
The reconciliation ensures that the client money requirement is equal to its client money resource. (Client money transactions are made through the firm’s own bank account and a transfer made at the end of each day to ensure the client account has the correct balance.)
How often is client money calculated?
In order to check whether sufficient funds are held in the client money bank accounts the insurance intermediary is required by the FCA to reconcile (at least every 25 business days) regularly their accounting records (‘the client money requirement’) to their banking records (‘the client money resource’).
What is reconciliation of a client ledger?
When a bank account is reconciled it indicates that your financial records match the totals found on the bank statement and that your financial records accurately reflect the amount of money held on behalf of your clients in the clients’ funds account.
