This Policy Statement summarises the feedback we received to our consultation on depositing client money in unbreakable deposits.
Some investment firms are experiencing increasing difficulty depositing client money at banks. Industry feedback suggests that this is partly due to the combined effects of the liquidity rules applicable to banks and a rule in the Client Assets sourcebook (CASS) that prevents a firm from placing client money in bank accounts with unbreakable terms of longer than 30 days (30-Day Rule).
In our Consultation Paper (CP17/29), we proposed changes to the 30-Day Rule designed to ensure consumers continue to be appropriately protected by firms holding their client money. This Policy Statement sets out our final amendments to the 30-Day Rule.
This policy statement is relevant to or of interest to:
The rules (set out in Appendix 1 of PS18/2) will come into force on 22 January 2018. The rules enable firms to hold a proportion of client money in an unbreakable deposit longer than 30 days, subject to certain conditions.