The FCA issues Dear CEO letter on Client Money

The FCA hasissued a Dear CEO letter to general insurance intermediaries stressing the critical importance of maintaining adequate client money safeguards.

The letter follows on from the work the FCA has completed in conjunction with its financial resilience surveys and reminds firms to assess where there is scope to strengthen their client money arrangements.

In particular, the regulator is referring firms to look at some familiar areas:

  • The application of client money rules to their business models
  • Governance and oversight arrangements
  • Oversight of third parties, including due diligence
  • Client money calculations and reconciliations
  • Obtaining client money audits (where required).

The letter also reminds firms of their obligation (in line with SUP 15.3 and Principle 11) to notify the FCA immediately of any material issues or concerns they identify in relation to their client money arrangements. There is also commentary in relation to firms holding money under Risk Transfer, so this letter may be of interest to those insurance distributors who do not have permission to hold or control client money.

For further information about the regulator’s requirements in each of these areas, click here to read the CEO letter.

UKGI will issue further information on this topic in the coming weeks. If you’re in any doubt at all about whether your firm is fully prepared to satisfy the FCA’s requirements and concerns, our compliance experts can help. Call us on 01925 765777 email info@ukgigroup.com.

 

UKGI is a trading style of UKGI Limited and UKGI Services Limited which are wholly owned subsidiaries within UKGI Group Ltd. UKGI Limited acts in compliance services and UKGI Services Limited acts in support services. UKGI Services Limited is a wholly owned subsidiary of Total Broker Solutions Limited, which is an appointed representative of Resolution Compliance Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) under reference number 421154. UKGI Limited Registered in England No. 03544014. UKGI Services Limited registered in England No. 04953835. All Registered Offices Number 22 Mount Ephraim, Tunbridge Wells, England TN4 8AS. VAT registration number 347 2664 82.