Client money requirements in relation to claims management activities under CASS 13

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Client money requirements in relation to claims management activities under CASS 13
  • The background of the FCA’s client money requirements in relation to claims management activities
  • The scope of CASS 13
  • The distinction between money held on a statutory trust or non-statutory trust
  • The requirements relating to opening client money accounts
  • The requirements relating to segregation and the operation of client money accounts?
  • Client money distribution requirements
  • Record keeping and reporting requirements in relation to client money

Client money requirements in relation to claims management activities under CASS 13

The background of the FCA’s client money requirements in relation to claims management activities

On the 1st April 2019, the FCA became the regulator of claims management companies (CMCs). CMCs undertaking regulated claims management activities now need to be authorised by the Financial Conduct Authority (FCA). As part of its regulation of CMCs, the FCA sets out rules for CMCs that receive or hold client money on behalf of their customers when providing claims management services continue in chapter 13 of the FCA’s Client Assets Sourcebook (CASS 13). For more information about FCA regulation of CMC more generally, see Practice Note: FCA regulation of claims management companies—essentials.

Prior to being authorised by the FCA, CMCs that held client money were subject to the Ministry of Justice’s Client Account Rules 2006. The CASS 13 rules cover the same areas; although is more prescriptive. There are also other requirements, including the appointment of a CASS senior manager.

The scope of CASS 13

CASS 13 applies to regulated CMCs that receive or hold client money. There will be a number of regulated CMCs which do not hold client money, in which case these rules won't apply. The CASS 13 rules apply equally to all CMCs that hold client money, regardless of the size of the CMC.

Money will be deemed to

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