FCA publishes policy statement on client money and unbreakable deposits

FCA has published a policy statement in response to feedback received from a consultation on depositing client money in unbreakable deposits.

The consultation responded to difficulties faced by investment firms in depositing client money at banks. This was deemed to be partly due to the combined effects of the liquidity rules applicable to banks and a CASS rule that prevents a firm from placing client money in bank accounts with unbreakable terms of longer than 30 days (30-Day Rule).

The policy statement sets out final FCA amendments to the 30-Day Rule. From 22 January 2018, firms can now hold a proportion of client money in an unbreakable deposit longer than 30 days, subject to certain conditions.