COBS 14.2.4 Payment of Client Money or Relevant Money into Client Accounts

Past version: effective from 21/10/2015 - 20/10/2015
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(a) Subject to the requirements in Chapter 19 in relation to Payment Services, where an Authorised Person holds or controls Client Money or Relevant Money it must ensure, except where otherwise provided in these Rules, that the Client Money and Relevant Money is paid into one or more Client Accounts within one Business Day of receipt.
(b) An Authorised Person must not hold or deposit its own Money into a Client Account, except where:
(i) it is a minimum sum required to open the account, or to keep it open;
(ii) the Money is received by way of mixed remittance, provided the Authorised Person transfers out that part of the payment which is not Client Money or Relevant Money within one Business Day of the day on which the Authorised Person would normally expect the remittance to be cleared;
(iii) interest credited to the account exceeds the amount payable to Clients or Payment Service Users, as applicable, provided that the Money is removed within twenty Business Days; or
(iv) it is to meet a shortfall in Client Money or Relevant Money.
(c) Where an Authorised Person deposits any Money into a Client Account, such Money is Client Money or Relevant Money, as applicable, until such time as the Money is withdrawn from the Client Account in accordance with the Client Money Rules or the requirements of Chapter 19 in the case of an Authorised Person conducting Payment Services.
(d) An Authorised Person must maintain systems and controls for identifying Money which must not be in a Client Account and for transferring it out of the Client Account without delay.
(e) Where an Authorised Person is aware that a Person may make a payment of Client Money or Relevant Money to the Authorised Person, it must take reasonable steps:
(i) to ensure that the Person has sufficient information of the relevant account details to be able to transfer Client Money or Relevant Money, as applicable, directly to a Client Account, or otherwise to enable the Authorised Person to identify the Client Money or Relevant Money, as applicable; and
(ii) to ensure that the Authorised Person is notified by that Person of such payment as soon as reasonably practicable.
(f) An Authorised Person must have procedures for identifying Client Money and Relevant Money received by the Authorised Person, and for promptly recording the receipt of the Money either in the books of account or a register for later posting to and recording in the Client Account, or as otherwise specified in Chapter 19 of these Rules. The procedures must cover Client Money or Relevant Money, as applicable, received by the Authorised Person through any means.
Guidance
An Authorised Person holding or controlling Relevant Money in connection with the conduct of Payment Services is expected to identify, record and reconcile such amounts in accordance with the requirements of Chapter 19.