The Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2018 (S.I. 2018/751) are amended as follows.
In regulation 2 (interpretation), in the definition of "client money"—
in paragraph (a), for "agency", in the second place it occurs, substitute , and" management "
at the end of paragraph (b) insert,but does not include money held in accordance with an authorised tenancy deposit scheme within the meaning of Chapter 4 of Part 6 of the Housing Act 2004 (see section 212 of that Act); .
In regulation 4 (amendments to an approved scheme), after paragraph (3) insert—
In regulation 5 (conditions which must be satisfied before approval may be given)—
in paragraph (1)(a)(iii), for "and without any deduction" substitute ," , subject to paragraph (1A) "
in paragraph (1)(c)(i), for "administration of the scheme" substitute ," failure of scheme members to account for client money to persons entitled to that money "
In regulation 8 (conditions with which scheme administrators must comply)—
in paragraph (1), after "practicable" insert— aafter that member joins the scheme, andbafter the scheme rules are amended under paragraph (1D)(a) or in accordance with a notice served under paragraph (1D)(b).,
after paragraph (1) insert—1AParagraphs (1B) to (1E) apply if the rules of the scheme have the effect of requiring the scheme administrator to make good the liability of a scheme member—aonly up to a certain amount,bonly within an aggregate limit on the liability of the scheme as a whole, orconly in relation to certain risks.1BThe certificate provided under paragraph (1) must include—as the case may be.ainformation about the amount referred to in paragraph (1A)(a),binformation about the limit referred to in paragraph (1A)(b), orcdetails of where to find information about the risks referred to in paragraph (1A)(c),1CParagraphs (1D) and (1E) apply if the Secretary of State considers that—athe amount referred to in paragraph (1A)(a) is no longer appropriate,bthe limit referred to in paragraph (1A)(b) is no longer appropriate,cit is no longer appropriate for the rules of the scheme to exclude liability in relation to one or more of the risks referred to in paragraph (1A)(c), ordit is appropriate for the rules of the scheme to exclude liability in relation to one or more risks that are not among the risks referred to in paragraph (1A)(c).1DThe Secretary of State may—awhere the Secretary of State is the scheme administrator, amend the scheme rules with the effect that the amount, the limit or the risks are replaced with such different amount, limit or risks (as the case may be) as the Secretary of State considers appropriate;bin any other case, serve a notice on the scheme administrator requiring that person to amend the scheme rules with the effect that the amount, the limit or the risks are replaced with such different amount, limit or risks (as the case may be) as the Secretary of State considers appropriate.1EThe scheme administrator must comply with a notice served under paragraph (1D)(b)—awithin the period of 30 days beginning with the day on which the notice is served, orbwithin such longer period beginning with that day as the Secretary of State may specify in the notice.,
after paragraph (3) insert—3AThe scheme administrator must maintain insurance that—acovers any foreseeable liability which may arise in connection with the failure of scheme members to account for client money to persons entitled to that money, andbis appropriate with regard to the size and number of scheme members and the amount of client money held by scheme members.3BBefore renewing the scheme's insurance, the scheme administrator must obtain the approval of the Secretary of State to the type and amount of insurance.3CThe Secretary of State may approve the renewal of the scheme's insurance only if the Secretary of State is satisfied that, if the insurance is renewed as proposed, the scheme administrator will continue to comply with paragraph (3A).,
in paragraph (5), at the end of sub-paragraph (a) for "; and" substitute, aawhere paragraph (1B) applies—as the case may be, andiinformation about the amount referred to in paragraph (1A)(a),iiinformation about the limit referred to in paragraph (1A)(b), oriiiinformation about the risks referred to in paragraph (1A)(c),, and
after paragraph (6) insert—7In this regulation, references to renewing a scheme's insurance (however expressed) include obtaining new insurance.8Paragraphs (2), (3B), (3C) and (4) do not apply where the Secretary of State is the scheme administrator.
The amendments made by this section are without prejudice to any power to make an order or regulations amending or revoking the regulations mentioned in subsection (1).