The removal of undesignated client accounts

On 10 January 2020, the Money Laundering and Terrorist Financing (Amendment) Regulations 2019 came into force. This required letting agents who manage properties with monthly rental incomes of €10,000 or more (or equivalent amount in a Member State) to comply with anti-money laundering regulations.

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Challenges from banks

Despite how these regulations only affect a minority of letting agents, many agents continue to face challenges from banks with maintaining their undesignated client accounts. This is against the guidance issued by the Joint Money Laundering Steering Group. In September 2020, Propertymark lobbied for the guidance to be improved.

The decisions behind which agents have been allowed to keep their accounts has often been made at the local branch-level, with some banks being less willing to allow agents to keep their accounts than others. This has made it difficult to establish a consistent approach across all bank branches.

The removal of undesignated client accounts poses a serious threat to an agent’s business. While Propertymark continues to work with banks to limit the number of accounts that are closed, we have been looking for alternative solutions to prevent as much disruption as possible.

Client Accounting Service Providers (CASPs)

One such solution is the use of a Client Accounting Service Provider (CASP), which is a third-party organisation that manages client money on behalf of the agent. A CASP provides several benefits compared to an agent managing client money through a high street bank, the greatest of which is that a CASP provides a solution for agents who can no longer open undesignated client accounts with high street banks.

However, Propertymark acknowledges that there are risks and there are certain requirements for using a CASP.  Decide whether or not a CASP is right for your business by reading our FAQ document on Client Accounting Service Providers.

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11 Oct 2022
FAQs: Client Accounting Service Providers

Letting agents who manage properties which yield an income of 10,000 Euros or more a month (or equivalent amount in each Member State) have to comply with anti-money laundering regulations. Despite how the Regulations specifically only affect a small portion of properties, many banks refused to allow letting agents to open new pooled client accounts.

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