The Clients’ Money Regulations define clients' money as money of any currency (whether in the form of cash, cheque, draft or electronic transfer):
- which a firm holds or receives for or from a client, including money held by a firm as stakeholder, and
- which is not immediately due and payable on demand to the firm for its own account.
The regulations require clients' money to be held in the currency in which it was received unless the client instructs otherwise in writing.
Fees paid in advance for professional work agreed to be performed and clearly identifiable as such are not regarded as clients' money for the purposes of these regulations. In addition to any requirements of the Money Laundering Regulations 2007 concerning the verification of a new client's identity, the regulations require firms to verify the identity of a client before they hold money on that client's behalf.
If a firm is authorised by the Financial Conduct Authority (FCA) any monies received or held which are investment business clients' money, as defined by the FCA’s Handbook, must be dealt with in accordance with that handbook. This takes precedence over the requirements of ICAEW’s Clients’ Money Regulations.
Clients’ Money Regulations – introduction of clients’ money regulation 8A
A new clients’ money regulation came into effect on 1 January 2017. This new regulation, clients’ money regulation 8A, aims to ensure the firm’s client bank account is being used for a lawful and legitimate purpose and bona fide transactions. Payments into and out of the firm’s client bank account must relate to an accountancy service that is being (or has been or will be) provided by the firm.
Sole practitioners and arrangements for an alternate
If you are a sole practitioner, who holds clients’ money, you must notify us of your alternative arrangements under Regulation 31 of the Clients’ Money Regulations. Please do this by using the Notification of arrangements under Regulation 31 form (PDF 539KB/1 page).
Frequently asked questions
View the answers to questions that members frequently ask our Quality Assurance team during Practice Assurance reviews and when they call our helplines.
Helpsheet
This helpsheet outlines the regulations governing the handling, banking and return of money held on behalf of clients. It also provides a useful summary of the most commonly encountered problems and how to deal with them.
Clients' Money Regulations archive
Find previous versions of the Clients' Money Regulations.