Changes to Client Money Protection Scheme
Mandatory Client Money Protection Scheme update
On 1 April 2019 new legislation will come into force that makes membership of an approved Client Money Protection Scheme (‘CMPS’) a mandatory requirement for residential property agents in England who hold client money.
RICS has submitted its application to establish a government approved Client Money Protection Scheme, and we are working closely with the Ministry of Housing, Communities and Local Government through the latter stages of the Ministry’s comprehensive approval process, ahead of the 1 April 2019 deadline. Subject to the Ministry’s approval, RICS registered firms will automatically be registered onto the new CMP scheme, without the need for further registration.
We will communicate with RICS registered firms again next week to provide an update and guidance on any further steps that may be required.
Firms that hold client money for either Residential Letting Agency or Residential Property Management (of leases less than 21 years) in England, will come under new statutory requirements from 1 April. The requirements will necessitate firms to be members of an “approved” Client Money Protection (CMP) scheme as per the Housing and Planning Act 2016.
RICS has successfully operated a CMP scheme for decades and is in close consultation with the Ministry of Housing, Communities and Local Government (MHCLG) on the approval of an RICS CMP scheme. While progress has been made, we are yet to receive approval for the RICS CMP scheme from MHCLG, or agree to any conditions imposed on the scheme by MHCLG. We are however working very closely with MHCLG to ensure a satisfactory outcome.
We will continue to update you as our application goes through MHCLG’s approval process and will be sending a more detailed communication to firms that we believe are affected by this.
