Hot on the heels of the Financial Conduct Authority (FCA)’s recent initiative to reform the method by which FX companies handle the funds which lay unused in trading accounts of UK brokerages, Alpari has made an efficient step to amend its terms and conditions accordingly.
The FCA has made changes to its rules on what the regulatory authority terms to be Client Assets (CASS), especially with regard to clarifications to the existing rules providing firms with an optional mechanism to deal with allocated but unclaimed client money. Under the rulings, which are set to be implemented in three stages on the dates 1 July 2014, 1 December 2014 and 1 June 2015, as long as certain conditions are met, including reasonable steps having been taken to trace the client, firms will be able to give funds to charity, as well as be permitted to pay away de minimis amounts of client money (£25 for retail clients and £100 for professional clients) after following an abbreviated procedure.
On this basis, Alpari has today released a new set of terms and conditions pertaining to all UK clients, which state that in the event that there has been no movement on the Client’s Balance for a period of at least six years (notwithstanding any payments or receipts of charges, interest or similar items), that the Balance in question is 25 Pounds Sterling (or equivalent in the Trading Account Currency) or less and the Company is unable to locate or contact the Client despite having taken reasonable steps to do so, the Company may release the Client’s cash balances from the Segregated Account and pay this to a registered charity of the Company’s choice.
Previously, the firm’s terms deemed that after that particular period of time, the funds would have been deemed to be the company’s property if unclaimed.
Furthermore, if an account remains dormant for six years and the amount of funds held within the account is £100 or less and the Company is unable to locate or contact the Client despite having taken reasonable steps to do so, the Company may release the Client’s cash balances from the Segregated Account and also pay this to a registered charity of the Company’s choice, whereas prior to the new rulings, under these circumstances the client would have no longer had a proprietary claim over this equity once six years had elapsed.
Indeed, it is clear that British regulatory authorities are keen to relieve firms of the funds of long-term dormant trading accounts, which although is unlikely to have a significant effect on many firms, as the length of time after which companies could claim the balances of such accounts as their own was very long, with dormant accounts stretching over six years being rare.
Alpari certainly took swift steps to amend its terms, therefore demonstrating its corporate willingness to uphold this new ruling and its equal lack of interest in claiming client funds as its own.
The FCA ruling on client assets in dormant accounts can be read here.