Money Handling Flashcards
What guidance does the RICS publish on handling client money
· Client Money Handling Professional Statement [2019]
· Client Money Protection Regulation [2019]
What is a client money account
An account in the name of an RICS-regulated firm, [a wholly owned subsidiary company of the firm or an appropriately contracted third-party transaction service provider], holding client money that belongs to:
· a single client of the firm (discrete client money account)
· more than one client of the firm (general client money account).
What are the key objectives of the Client Money professional statement
· Client money is kept safe
· Client money accounts are used for appropriate purposes only
· RICS-regulated firms have the appropriate controls and procedures to safeguard client money e.g. the RICS Client Money Protection Scheme (for Surveying Services)
What does the RICS (Rules of Conduct) say about client money handling
· Rule 1 of the new Rules of Conduct – Firms must keep client money safe and have the appropriate controls and procedures in place.
If you were in private practice and the client wanted to pay you in advance what would you do
Client name
Identifiable
Terms and details
Interest paid to client
Never overdraft
Running balance
What MUST RICS regulated firms ensure when holding Client money
Exclusive control
Client used in the title
Immediately available
Interest. Penalties if client has confirmed
Conditions
What is best practice if your firm has any surplus client money in a client account
· Trace the clients or owners of the money
· Hold money in a client suspense account
· Hold for at least 3 years.
· Donate to charity if the money cannot be returned.
Overall mandatory requirements of RICS regulated firms
They MUST:
1. Ensure they are signed up to the RICS Money Protection Scheme (for Surveying Services) [if they’re within the UK]
2. Adhere to the professional statement and keep client money safe, only use for appropriate purposes and have proper procedures and controls
3. Principal of firm must ensure all members are aware of the rules and adhere to them
What is the RICS Money Protection Scheme
· The RICS operates a Client Money Protection scheme in the UK. This scheme provides protection, as a last resort, in instances where an RICS Regulated firm is unable to repay a client’s money, up to the limits and exceptions set out in the scheme rules.
