Regulation

Client Money Protection
With effect from 1 April 2019

rics.org/regulation

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Contents
Appendix 1: Rules of the RICS Client Money Protection Scheme for Surveying
Services ������������������������������������������������������������������������������������������������������������������ 2
Table of Contents�������������������������������������������������������������������������������������������������� 3
Rules of the RICS Client Money Protection Scheme for Surveying Services ��� 4
1

Defined Terms ������������������������������������������������������������������������������������������� 4

Scheme purpose and approval ���������������������������������������������������������������������������� 7
Scheme Membership ������������������������������������������������������������������������������������������� 7
Client money �������������������������������������������������������������������������������������������������������� 8
Compensation for loss of Client Money ���������������������������������������������������������������� 9
General matters ������������������������������������������������������������������������������������������������� 12
Annex: Compensation Limits ����������������������������������������������������������������������������� 14
Appendix 2: Rules of the RICS Client Money Protection Scheme for Property
Agents �������������������������������������������������������������������������������������������������������������������� 15
Table of Contents ����������������������������������������������������������������������������������������������� 15
Rules of the RICS Client Money Protection Scheme for Property Agents ����������� 16
Scheme Membership������������������������������������������������������������������������������������������ 20
Client money ������������������������������������������������������������������������������������������������������ 22
Compensation for loss of Client Money �������������������������������������������������������������� 23
General matters ������������������������������������������������������������������������������������������������� 25
Annex: Compensation Limits ����������������������������������������������������������������������������� 28
Appendix 3: TDS Deposits ����������������������������������������������������������������������������������� 30

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Client Money Protectionii

Effective from 1 April 2019

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In this document we set out the details of the various RICS client money protection
provisions which apply to RICS Registered Firms.
1.

RICS Client Money Protection Scheme for Surveying Services

Except in respect of client money covered by the Property Agents Scheme to whichparagraph 2 refers, the client money protection arrangements set out in Appendix 1 apply
in respect of client money held by RICS Registered Firms .
2.

RICS Client Money Protection Scheme for Property AgentsSpecific provisions apply in respect of Property Agents from 1 April 2019 in respect ofClient Money (as defined in Appendix 2) held in connection with letting agency work andproperty management work in England (as set out in the Property Agent definition in
Appendix 2). Please note therefore that the specific provisions relating to client money
protection for Registered Firms which are Property Agents undertaking such activities inEngland will apply as set out in Appendix 2 for the handling of such Client Money and forpossible compensation for loss of such Client Money.
The Rules of the RICS Client Money Protection Scheme for Property Agents are set out
in their entirety in Appendix 2 and comprise the rules of that Scheme which have been
approved by the Secretary of State of the Ministry of Housing Communities and Local
Government and comply with the specific provisions of the Client Money Protection
Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2018.
3.

TDS Deposits

Tenancy Deposit Claims for which there is protection either under by a scheme operated
by the Dispute Service Limited (TDS) or by TDS Northern Ireland (TDSNI) relating to
the collection of holding tenancy deposits for agents and landlords are administeredseparately from the above schemes.

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Client Money Protection

Appendix 1: Rules of the RICS
Client Money Protection Scheme
for Surveying Services
This Appendix sets out the rules (the Rules") of the generally applicable RICS Client
Money Protection Scheme for Surveying Services ("the Scheme") .
These are the specific provisions which apply in relation to protection of client money held
by RICS Registered Firms in connection with all of their activities in the United Kingdom
which the RICS requires all of its Registered Firms to follow.
This is subject to an exception for any RICS Registered Firm which, as all or part of its
business, conducts the business of acting as residential property agents in England.
Such a Registered Firm will, in respect of client money which falls within the terms of that
Scheme as defined in Appendix 2 (client money held by a Property Agent in respect ofletting agency work and property management work in England), instead be subject tothe specific rules of the RICS Client Money Protection Scheme for Property Agents set
out in Appendix 2.
These Rules are additional to the RICS Rules of Conduct which apply to an RICS
Registered Firm.

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Table of Contents
Rules of the RICS Client Money Protection Scheme for Surveying Services ����������� 4
1

Defined Terms ������������������������������������������������������������������������������������������� 4

Scheme purpose and approval ���������������������������������������������������������������������������� 7
Scheme Membership ������������������������������������������������������������������������������������������� 7
Client money �������������������������������������������������������������������������������������������������������� 8
Compensation for loss of Client Money ���������������������������������������������������������������� 9
General matters ������������������������������������������������������������������������������������������������� 12

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Client Money Protection

Rules of the RICS Client Money
Protection Scheme for Surveying
Services1
1.1

Defined Terms
In these Rules relating to the generally applicable RICS Client Money Protection
Scheme for RICS Registered Firms for all of their activities, the following terms
and expressions shall have the following meanings (unless the context otherwise
requires):"Claim""Client"

a claim for compensation by a Client of a
Member under the Scheme in accordancewith the claims procedures in Rule 11
a member of the public which is a client of
an RICS Registered Firm
A member of the public includes any
person, firm, trust, body corporate or otherorganisation.
money of any currency (whether in theform of cash, cheque, draft or electronictransfer)a.

which a Registered Firm holds or
receives for or from a Client, including
money held by a Registered Firm as
stakeholder; andb.

which is not immediately due andpayable on demand to the Registered
Firm for its own Accountbut excluding for the purposes of thisSchemea.

money of any currency (whether inthe form of cash, cheque, draft orelectronic transfer) held by an RICS
Registered Firm as TDS Deposits
for details of which please refer toAppendix 3;b.

fees paid in advance for professional
work agreed to be performed, andclearly identifiable as such. However,commissions or other pecuniary reward
or other advantage received fromanyone other than the Client which
are not permitted by any relevant
regulator to be received or retained by
the Registered Firm, and for which theRegistered Firm has to account to such
Client, will be regarded as client money
for the purposes of this Scheme and so
will not be excluded by reason of thissub-paragraph.

"Client Money"

4

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rics.org/regulationin respect of the Scheme, an account which:"Client Money Account""Client Money Levies""Closing Date""Compensation Limits""Financial Year""Insurer""Member" or "Scheme Member""Property Agents Client Money Protection
Claim""RICS""RICS Registered Firm""RICS Rules of Conduct"a.

does not contain any sums other than
the whole or any part of client money
paid into it, or such sums of money as
may be necessary to replace any sum
which by error has been withdrawn
from the account, together with
accrued interest on such amounts; andb.

includes in its title the word "client"or an appropriate abbreviation of thatword,

and whether such account is held in
the name of the Registered Firm or awholly owned subsidiary company of
the Registered Firm that holds money inrespect of the Registered Firmin respect of the Scheme, levies paid by aMember of the Scheme pursuant to Rule 5
the date on which the Scheme ceases
to provide client money protection inaccordance with the terms of the Scheme,
and so the date on which the Scheme isclosed in accordance with Rule 12
the compensation limits determined by
the Scheme Administrator on the basis set
out in Rule 9.3, and set out in the Annex tothese Rules, as amended by the Scheme
Administrator from time to timein respect of the Scheme, each period of
twelve months beginning on 1 April
CMP Insurance PCC Limited of PO Box
155, Mill Court, La Charroterie, St Peter
Port, Guernsey GY1 4ET, a subsidiary of
the RICS which is an insurer authorised by
the Guernsey Financial Services Authority,or such other insurer as the Scheme
Administrator may from time to time selectas an appropriate insurer for providing
insurance cover, as required pursuant toRule 10a member of the Schemea claim made pursuant to the Rules of the
RICS Client Money Protection Scheme for
Property Agents set out in Appendix 2
The Royal Institution of Chartered
Surveyorsa firm which is registered with RICS for
regulation and which is therefore subject to
the RICS Rules of Conduct
the RICS rules of conduct as determinedby the RICS from time to time and anyother applicable mandatory requirements
set out by RICS, and any other specificand individual requirements notified toany particular RICS Registered Firm as
appropriate

Effective from 1 April 20195

Client Money Protection"RICS Registration Renewal Date""Scheme""Scheme Administrator""Scheme Funds""Scheme Website"

in respect of a Member, the date in eachyear on which its registration as an RICS
Registered Firm is due for renewal, as
notified by RICS
the "RICS Client Money Protection Scheme
for Surveying Services"the person appointed to administer the
Scheme in accordance with Rule 13
funds held by the Scheme Administrator
in respect of its functions as Scheme
Administrator of the Scheme, including theproceeds of insurance cover maintainedby the Scheme pursuant to Rule 10, anyother funds deriving from Levies received
from Scheme Members and any other coverheld in respect of the Scheme provided
that this calculation of Scheme Funds is
intended only for the purposes of assessing
the amount of funds available to meetclaims liability for loss of Client Money under
Rule 8. It shall in no way imply any ring
fencing of such funds, which shall otherwise
remain Scheme Administrator's monies
for it to apply as it thinks appropriate in all
circumstances at its discretion
the website maintained by the Scheme
Administrator in respect of the Scheme atrics.org/clientmoneyprotectionschememeans:a.

"TDS Deposit"
b.

"UK"

6

Effective from 1 April 2019tenancy deposits protected by TDS
from agents and landlords who are
registered with it as members of the
Insurance Based Tenancy Deposit
Protection Scheme (IBTDP) in Englandand Wales and who are also a RICS
Member or Registered Firm ; or

tenancy deposits protected by TDSNI
from agents and landlords who are
registered with it as members of the
Insurance Based Tenancy Deposit
Protection Scheme (IBTDP) in Northern
Ireland and who are also a RICS
Member or Registered Firm.
the United Kingdom of Great Britain andNorthern Ireland, the Isle of Man and theChannel Islands

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Scheme purpose and approval
2.1

The main purposes of the Scheme are:ato allow RICS Registered Firms to offer client money protection in accordancewith the Rules; andb

to compensate Clients of an RICS Registered Firm for the losses of its Clientsresulting from of the RICS Registered Firm failing to account for Client Money(as defined in paragraph 1.1) to the person entitled to it in accordance with theRules.

2.2 The Scheme only applies to Registered Firms with respect to its activities in the
United Kingdom.
2.3 The Scheme is designed to give some protection to members of the public bymaking funds available for their reimbursement when all other avenues havebeen exhausted. RICS Registered Firms which are members of the Scheme canthemselves receive no financial benefit or protection under the Scheme. In the eventof a loss, the primary duty is on the defaulting RICS Registered Firm to make full
restitution from its own resources (whether by paying the loss out of its own assets
or its own relevant insurance cover or otherwise). It is only in cases where the firm
concerned is unable to make full restitution that the Scheme can take effect and so
its Clients may consider whether they can make a claim under Rule 11.
2.4 Any questions relating to the terms of the Rules of the Scheme, Scheme
Membership and claims under the Scheme, should be referred to the Scheme
Administrator.

Scheme Membership3.
3.1

Participation by RICS Registered Firms
Membership of this Scheme forms part of the package of provisions which apply to
RICS Registered Firms.

3.2 Each RICS Registered Firm which holds Client Money must, as part of its RICS
registration, become a Member of the Scheme. Each RICS Registered Firm issubject to the general rules applicable to RICS Registered Firms and in addition,
in respect of Client Money (as defined in Rule 1.1), the specific provisions set out inthese Rules which form the "RICS Client Money Protection Scheme for all Surveying
Surveys".

4.
4.1

Duration of coverage under the Scheme
Coverage for a Member under the terms of the Scheme shall continue for such timeas an RICS Registered Firm remains an RICS Registered Firm and provided that
Levies invoiced under Rule 5 are paid.

4.2 When seeking to become an RICS Registered Firm and thereafter on each RICS
Registration Renewal Date, the Scheme Administrator shall review the RICS
Registered Firm's eligibility to be a Member of the Scheme and its continued
membership of the Scheme.
4.3

5.
5.1

The Scheme Administrator shall review a Member's continued membership of
the Scheme on an annual basis. If, in respect of a Member at its particular RICS
Registration Renewal Date re registration, the RICS intends to terminate its status as
an RICS Registered Firm, RICS shall notify the Member accordingly.

Scheme Levies
Levies are payable by a Member for the duration of its Scheme Membership.

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Client Money Protection

5.2 The rate or amount of the Levies in respect of each Financial Year of the Scheme
will be published on the Scheme's Website and notified to the then current Scheme
Members in good time before the commencement of the Financial Year to which
they relate.
5.3

Each Member must pay the Levy for Scheme Membership of such amount as isdetermined by the Scheme Administrator and notified to the Member promptly.
The amount of the Levy for a Member will be invoiced as part of the invoice forlevies payable for RICS Registered Firm status on each RICS Registration Renewal
Date. The Levy paid as at the RICS Registration Renewal Date is intended to be
the Levy for the forthcoming twelve month period after that Renewal Date. It isnoted however that the Financial Year of the Scheme will likely differ from the twelve
month period which will apply to each Member of the Scheme. Should the Scheme
Administrator determine that the Levies determined pursuant to Rule 5.2 in respectof a forthcoming Financial Year of the Scheme (or part of a Financial Year) arematerially higher than were contemplated when a Member's Levy was invoiced in
respect of a period which in part falls in that Financial Year or should the insurance
cover be revised during the course of the Financial Year, the Scheme Administrator
may at its discretion issue an additional invoice for an additional amount of Levy.

5.4

Payment of any Levy invoiced must be made by a Member as a precondition for its
coverage under the terms of the Scheme remaining in full force and effect for the
purposes of Rule 4.

6.
6.1

Termination of Membership
Membership of the Scheme shall be coterminous with the duration of a Member's
registration as an RICS Registered Firm. A Member which fails or is reasonably
aware that it may fail to meet any of the qualifying conditions to be an RICS
Registered Firm must notify the Scheme Administrator promptly.

6.2 Membership of a Member will cease if:athe Member ceases to be an RICS Registered Firm.

Deregistration as an RICS Registered Firm shall be determined pursuant to the termsof the RICS Rules of Conduct and will result in cancellation of the firm's membershipof the Scheme with effect from the date that the firm is deregistered.
b

6.3

the Scheme Administrator (at its sole discretion) determines, whether at
the firm's RICS Registration Renewal Date or otherwise, not to continue aMember's membership of the Scheme.

Should membership of a Member be terminated, the Scheme Administrator willcancel the Member's Membership of the Scheme promptly by notice in writing to
the Member. Cancellation of membership of the Scheme will mean that protection
under the Scheme will cease with effect from the date that membership is cancelled.

Client money
7.

Handling of Client Money

7.1

Client Money must be held in a Client Money Account with a bank or building
society authorised by the Prudential Regulatory Authority (PRA), the Bank ofEngland and the Financial Conduct Authority (the FCA) in England, Scotland, Walesand Northern Ireland, or, in the case of Client Money held in Guernsey, with a bankauthorised in Guernsey, the Guernsey Financial Services Commission or, in thecase of Client Money held in Jersey, with a bank authorised by the Jersey Financial
Services Commission or, in the case of Client Money held in the Isle of Man, with abank authorised by the Isle of Man Financial Services Authority

7.2

A Scheme Member must:a8

Effective from 1 April 2019

maintain one or more Client Money Accounts into which all Client Money of theMember is paid;

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7.3

7.4

b

a Client Money Account must be designated as such and easily distinguishedfrom other accounts of the Member;c

all clients of the Member must be advised that Client Money will be held in a
Client Money Account and be notified of the details of that account;dconfirm in writing with the bank with which it holds a Client Money Account thatthe bank acknowledges that monies in the Client Money Account must not be
combined with, or transferred to, any other account maintained by the Member,and the bank shall not be entitled to exercise any right of set up or counterclaim
against money in that Client Money Account in respect of any sum owed to it inrespect of any other account of the Member firm;ekeep records and accounts which show all dealings with Client Money, anddemonstrate that all Client Money held by the firm is held in a Client Money
Account.

As regards handling Client Money, a Scheme Member must:a

have and comply with written procedures for handling Client Money, whichmust comply with any RICS requirement to which Rule 7.4 refers;bpublish their procedures for handling Client Money on their website (if any);cprovide a copy of their procedures for handling Client Money to any person
who may reasonably require a copy, free of charge;dkeep records and accounts that show all dealings with Client Money;erepay any Client Money, including where feasible any interest earned, without
delay if there is no longer any requirement to retain that money or the relevantclient requests it; andfhold and maintain professional indemnity insurance cover that is appropriate for
the Member's size, income, type of work and the amount of Client Money held.

In addition to the specific provisions set out in Rules 7.1, 7.2 and 7.3, the Scheme
Administrator may from time to time issue advice and guidance as to how RICS
Registered Firms should best comply with RICS Rules of Conduct which may
include guidance to, or prescription of additional required procedures for, RICS
Registered Firms which are members of the Scheme relating to key aspects of bestpractice as to the handling of Client Money.

Compensation for loss of Client Money8.
8.1

Liability for loss of Client Money
In the event that a Member fails to account for Client Money to a person entitled toit whilst remaining an RICS Registered Firm (each Member having a primary duty tomake full restitution as set out in Rule 2.3), the Scheme Administrator shall, out of
the Scheme Funds, make good the Member's liability to that person or persons assoon as reasonably practicable on the terms set out in Rules 8 – 11.

8.2 The Scheme Administrator shall, usually on an annual basis prior to thecommencement of each Financial Year of the Scheme:

8.3

adetermine the relevant limits and risks in respect of which cover is to beprovided, further details of which are explained in Rule 9 below, andbobtain insurance cover under Rule 10 accordingly.

No amount payable shall be subject to a deduction of a fee by the Scheme
Administrator and no Client claimant shall be made to bear all, or any part of any,
excess amount which may be applicable to the insurance cover obtained under Rule10.

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Client Money Protection

9.

Compensation Limits

9.1

The Scheme provides for members of the public who are Clients of Members of the
Scheme to be reimbursed for any pecuniary direct loss of Client Money. It does notcover any indirect or consequential loss which a Client may suffer.

9.2

The Scheme is designed to offer some protection to Clients where all other avenues
have been exhausted, as explained in Rules 2.3 and 8.1. (Each Member has a
primary duty to make full restitution, as set out in Rule 2.3.) Any Client considering
making a Claim should in the first instance, explore all other avenues, principallyby seeking restitution from the defaulting Member, as is reasonable in all thecircumstances. Possible sources of restitution may include financial indemnity
insurance maintained by the Member or access to other assets of the Member.

9.3

The Scheme Administrator may determine, as it thinks appropriate, any or all of thefollowing: limits per claim: a cap on liability of the Scheme as a whole in respect ofany single Financial Year of the Scheme and/or coverage of, or exclusion of, certain
risks. Details of the current limits, caps and relevant risks (the "Compensation
Limits") are set out in the Annex to these Rules as amended by the Scheme
Administrator from time to time. Any aggregate cap set as a Compensation Limit
shall be determined by the Scheme Administrator with the intention that it shall be inexcess of the maximum probable loss which the Scheme Administrator reasonably
expects might arise for the Scheme.

9.4

The Scheme Administrator shall maintain policies and procedures with a view tomitigating the risk of losses for Clients exceeding any Compensation Limits it setspursuant to Rule 9.3. The Scheme Administrator may impose, whether through the
RICS Rules of Conduct or by individual notification, controls with a view to ensuringthat the prospect of a Member losing Client Money in excess of the Compensation
Limits set by the Scheme Administrator under Rule 9.3 is sufficiently remote.

9.5

The Compensation Limits set pursuant to Rule 9.3 shall be reviewed, alongside
the adequacy of insurance cover under Rule 10.5, periodically as the Scheme
Administrator considers appropriate in all the circumstances. They will be reviewed
in respect of each forthcoming Financial Year of the Scheme by the Scheme
Administrator prior to the commencement of that Financial Year and should any
exceptional circumstances arise to which Rule 10.5 refers. Should the Scheme
Administrator determine to change the limits and/or risks covered within theCompensation Limits, the Scheme Administrator will update the Annex to theseRules and Scheme's Website promptly and any changes will also be notified to
Scheme Members promptly so that, if they wish to review their status as an RICS
Registered Firm, and consequently their membership of the Scheme, they will havethe opportunity to do so, and to make alternative arrangements to join another
Property Agents Client Money Protection Scheme.

9.6

In no circumstances may the individual limit, aggregate limit or risks covered within
the Compensation Limits be amended retrospectively. Any adjustments shall only
apply with effect from a date on or after the date of the adjustment as published on
the Scheme's Website and notified to Scheme Members.

10.

Insurance cover

10.1 The Scheme Administrator shall, in respect of each Financial Year of the Scheme,
secure insurance cover with an Insurer that:acovers any foreseeable liability which may arise in connection with failure of
Scheme Members to account for Client Money to persons entitled to thatmoney under Rules 8 and 9; andb

is appropriate with regard to the size and number of Scheme Members and theamount of Client Money held by Scheme Members.

10.2 The insurance cover obtained for a Financial Year shall be determined by the
Scheme Administrator with the intention that it shall be sufficient to allow the10

Effective from 1 April 2019

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Scheme to pay out in the case of maximum probable loss which the Scheme
Administrator might reasonably expect might arise in the particular Financial Year.
10.3 The Scheme Administrator shall ensure that the terms for compensation under
Rules 8 and 9 of the Scheme and the terms for the insurance cover obtained under
this Rule 10 are consistent with each other. Liability of the Scheme to pay a Claim
only arises in relation to a risk in respect of which such insurance cover has beenobtained.
10.4 Adequacy of insurance cover shall be monitored periodically during each Financial
Year as the Scheme Administrator thinks appropriate in all the circumstances.
(Should exceptional circumstances arise during any Financial Year such that the
Scheme Administrator reasonably considers that the insurance cover is, or may
become, inadequate for the purposes set out in Rule 10.1, it may determine to seekchanges to the insurance cover in respect of the remainder of that then current
Financial Year.)

11.

Claims procedures

11.1 This Rule sets out the process for making Claims for compensation under the
Scheme and the procedures that will apply in relation to the investigation anddetermination of such Claims and any complaints under the Scheme.
11.2 Claims for compensation for loss of Client Money shall be made in accordance withsuch procedures as the Scheme Administrator may determine and notify to Scheme
Members from time to time.
11.3 Conditions are kept to the minimum but two important conditions are thataa Member must report any known or suspected loss to the Scheme
Administrator as soon as possible after a Member becomes aware of it. Even
if the Member does not know the full extent or details of the Client loss, theMember should advise the Scheme Administrator as soon as it becomes awareof the problem.

b

where fraud or dishonesty is suspected, then the details must also be reported
to the police and other relevant authorities.

11.4 In respect of a Claim or a potential Claim, a Member must:aSubmit a notice in writing of any potential claim as soon as practicable giving all
reasonable and necessary information assistance and proof of any Claim as the
Scheme Administrator may reasonably require;bagree to cooperate fully with any investigation by the Scheme Administrator or
their nominated representative;cagree to onsite visits to the addresses in which their records and accounts
showing all dealings with Client Money are held;dproduce, in response to all reasonable requests by the Scheme Administrator,
all records and/or documents relating to matters pertinent to the Scheme for
the Scheme Administrator and any nominated representative;erespond to all communications promptly when requested to do so by the
Scheme Administrator;fmake every reasonable effort to minimise any Client Money loss and to takeappropriate measures immediately if they are required to reduce any Claim; andggive the Scheme Administrator all reasonable assistance which may reasonably
be required to pursue compliance with the terms of the Rules.

11.5 Claims will only be accepted by the Scheme Administrator in respect of a Member
which occurred during such time as the Member is a Member of the Scheme.
11.6 The Scheme Administrator shall accept notification of Claims for compensation
under the Scheme for twelve months after the date on which the circumstances
giving rise to a Claim occurred.

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Client Money Protection

11.7 Any Claims should be submitted in writing to the Head of Registration andCompliance, RICS Regulation, 55 Colmore Row, Birmingham B3 2AA. The Scheme
Administrator will acknowledge receipt of any Claim within seven working days.
11.8 Upon receipt of all information needed to substantiate a Claim, the Scheme
Administrator hopes to be able to settle the claim quickly. Clients who are claimants
will be kept informed of progress and advised of any reasons for any delay in theprocess. The Scheme Administrator will only make payment of any Claim to a Client
once it has followed the terms of the claims procedure set out in this Rule and theInsurer has paid out to the Scheme Administrator in respect of that Claim under theterms of the insurance cover obtained under Rule 10.
11.9 Upon payment of any Claim to a Client by the Scheme Administrator out of the
Scheme Funds, the debt/loss will be assigned to the RICS for them to pursue
any recovery against the firm or persons responsible. The Scheme Administrator
may require payment by a Member into the Scheme of an amount additional to its
Levies which is equal to the detriment suffered by Scheme Funds as a result of theMember's failure to comply with any conditions in these Rules.
11.10 The Scheme Administrator shall maintain a Claims complaints handling policy which
it shall apply in the event of any complaints arising from Clients who make Claims
under the Scheme. Details of the Claims complaints handling policy shall be madeavailable on request to Scheme Members and Clients.

General matters
12.

Duration of the Scheme

12.1 The Scheme Administrator shall continue to offer the Scheme for so long as RICS,
at its discretion and for any reason, decides to do so and provided that appropriate
insurance cover can be obtained for the purposes of Rule 10 and renewed on anannual basis which matches the liability for loss of Client Money pursuant to Rules 8
and 9.
12.2 The Scheme Administrator may at its discretion determine to close the Scheme witheffect from the Scheme Closure Date having given due written notice to Scheme
Members and having provided details of the plans for an orderly closure of the
Scheme.
12.3 The Scheme Administrator may determine to close the Scheme should it fail toobtain the type and amount of insurance pursuant to Rule 10 in respect of any
prospective renewal of the Scheme's insurance for the forthcoming Financial Year of
the Scheme.
12.4 The Scheme Administrator shall not accept any new member or any membershiprenewal once it has determined to close the Scheme and, in any event, on no
occasion after the Scheme Closure Date.

13.

Scheme Administrator

13.1 The first Scheme Administrator is RICS itself.
13.2 RICS may determine to appoint an alternative Scheme Administrator, in which event
it shall notify Scheme Members and update the Website accordingly.

14.

Rule Amendments

14.1 These Rules are the rules in force as at 1 April 2019. These Rules replace the termsof any rules and other documents in respect of the Scheme issued prior to 1 April
2019 (including The RICS Clients' Money Protection Scheme Firms' Guide and The
RICS Clients' Money Protection Scheme Clients' Guide, each dated 1 February2011).

12

Effective from 1 April 2019

rics.org/regulation

14.2 The Scheme Administrator may revise the terms of any Compensation Limits as
it considers it appropriate on the basis set out in Rule 9.3 and the adequacy of
the insurance cover on the basis set out in Rule 10.4 as it considers it appropriate
from time to time. These provisions will be reviewed by the Scheme Administrator
prior to the commencement of each Financial Year of the Scheme and should any
exceptional circumstances arise during a Financial Year.
14.3 The Rules may also be amended as determined by the Scheme Administrator in any
other respect.
14.4 If and when the Rules are amended Members shall be notified promptly before theRule changes come into force and they shall be made available on the Scheme's
Website. Scheme Members should ensure that at all times they are referring to themost up to date copy of the Rules of the Scheme.

Effective from 1 April 201913

Client Money Protection

Annex: Compensation Limits
This Annex sets out the current Compensation Limits for the purposes of Rule 9.3.
1

Direct loss: Rule 9 makes it clear that the Scheme provides for reimbursement only
in respect of direct loss of client money and covers no indirect or consequential loss.
In addition there are specific exclusions as follows. These are determined by the
Scheme Administrator for the purposes of Rule 9.2 and as set out in this document.

2

Limit per claim: £50,000

3Cap on liability of the Scheme as a whole in respect of any single Financial
Year: £10,300,000.
This amount is not however exclusively for payment of claims in respect of Surveying
Services Client Money Protection Claims: it also includes any amount payable
in respect of TDS Claims (for which there is a specific lower maximum limit of£3,000,000) to which Appendix 3 refers and any amount payable in respect ofProperty Agent Client Money Protection Claims to which Appendix 2 refers.

4

Risks covered / excluded

Exclusions from cover are as follows:a

Loss of client money that is jointly held by a Client and a Scheme Member
where the Client has contributed to such loss. However this exclusion will not
apply to innocent Clients.

b

Loss arising or occurring elsewhere than in the United Kingdom of Great Britain
and Northern Ireland, the Channel Islands or the Isle of Man.

c

Loss of any consequential nature including but not limited to loss of potential
income interest and dividends not realised by the Client because of a loss
covered by the Scheme.

dPenalties, fines or similar impositions.

eLosses arising due to the failure of any bank or deposit taker in which a Client
Money Account is heldfLoss due to investment, where the investment is specifically agreed in writing
with the clientg

Loss of investment incomehLoss or damage directly or indirectly occasioned by, happening through or in
the consequence of war, invasion, acts of foreign enemies, hostilities (whether
war be declared or not), civil war rebellion, revolution, insurrection, military or
usurped power or confiscation or nationalisation or acquisition or destructionof or damage to property by or under the order of any government or public or
local authority.

iLoss, damage, cost or expense of whatsoever nature directly or indirectly
caused by resulting from or in connection with any act of terrorism regardlessof any other cause or event contributing concurrently or in any sequence to theloss.

Loss, damage, costs or expense of whatsoever nature directly or indirectly causedby, or resulting from or in connection with any action taken in controlling, preventing,expressing or in any way relating to any act of terrorism.
For this purpose, an "act of terrorism" means an act including but not limited tothe use of force or violence and/or the threat thereof, or any person or group(s)of persons, whether acting alone or on behalf of or in connection with anyorganisation(s) or government(s) committed for political, religious, ideological or similar
purposes including the intention to influence any government and/or put the public, or
any section of the public, in fear.

14

Effective from 1 April 2019

rics.org/regulation

Appendix 2: Rules of the RICS
Client Money Protection Scheme
for Property AgentsThis Appendix sets out the rules ("the Rules") of the RICS Client Money Protection
Scheme for Property Agents ("the Scheme").
These Rules set out the specific provisions which apply in relation to Client Money heldby Property Agents in respect of letting agency work and property management work in
England. It therefore concerns client money held in connection with business activities
when acting as residential letting agents in England.
These Rules are additional to the RICS Rules of Conduct which apply to an RICS
Registered Firm.

Table of Contents
Rules of the RICS Client Money Protection Scheme for Property Agents ����������� 16
Scheme Membership ����������������������������������������������������������������������������������������� 20
Client money ������������������������������������������������������������������������������������������������������ 22
Compensation for loss of Client Money �������������������������������������������������������������� 23
General matters ������������������������������������������������������������������������������������������������� 25

Effective from 1 April 201915

Client Money Protection

Rules of the RICS Client Money Protection Scheme
for Property Agents1.
1.1

Defined Terms
In these Rules relating to the RICS Client Money Protection Scheme for Property
Agents, the following terms and expressions shall have the following meanings(unless the context otherwise requires):"the Act""Certificate""Claim""Client"

the Housing and Planning Act 2016
in respect of a Scheme Member, acertificate confirming its membership of
the Scheme issued in accordance with Rule4
a claim for compensation by a Client of a
Member under the Scheme in accordancewith the claims procedures in Rule 11
a member of the public which is a client of
an RICS Registered Firm which is a Memberof the Scheme
A member of the public includes any
person, firm, trust, body corporate or otherorganisationin respect of the Scheme, moneya.

received by the Member in the courseof English letting agency work within
the meaning of Section 54 of the
Housing and Planning Act 2016, orEnglish property agency work within
the meaning of Section 55 of that Act;andb.

held on behalf of another person"Client Money"

but excluding any money held in accordancewith an authorised tenancy deposit schemewithin the meaning of Chapter IV of Part 6of the Housing Act 2004 (see Section 212 ofthat Act)in respect of the Scheme, an account which:"Client Money Account""Client Money Levies"

16

Effective from 1 April 2019a.

does not contain any sums other than
the whole or any part of client money
paid into it, or such sums of money as
may be necessary to replace any sum
which by error has been withdrawn
from the account, together with
accrued interest on such amounts; andb.

includes in its title the word "client"or an appropriate abbreviation of thatword

and whether such account is held in
the name of the Registered Firm or awholly owned subsidiary company of theRegistered Firm, or a sister company of
the Registered Firm that holds money inrespect of the Registered Firmin respect of the Scheme, levies paid by aMember of the Scheme pursuant to Rule 5

rics.org/regulation"Closing Date""Commencement Date""Compensation Limits""Financial Year""Insurer""Member" or "Scheme Member"the date on which the Scheme ceases
to provide client money protection for
Property Agents in accordance with theterms of the Scheme, and so the date on
which the Scheme is closed in accordancewith Rule 12
the date on which the Scheme commences
to provide client money protection for
Property Agents in accordance with theterms of the Scheme
the compensation limits determined by
the Scheme Administrator on the basis set
out in Rule 9.3, and set out in the Annex tothese Rules, as amended by the Scheme
Administrator from time to timein respect of the Scheme, each period of
twelve months beginning on 1 April
CMP Insurance PCC Limited of PO Box
155, Mill Court, La Charroterie, St Peter
Port, Guernsey GY1 4ET, a subsidiary of
the RICS which is an insurer authorised by
the Guernsey Financial Services Authority,or such other insurer as the Scheme
Administrator may from time to time selectas an appropriate insurer for providing
insurance cover, as required pursuant toRule 10a member of the Scheme

Effective from 1 April 201917

Client Money Protection

in respect of the Schemea.

a person who engages "in English
letting agency work" within themeaning of Section 54 of the Act.
"Letting agency work" means things
done by a person in the course of abusiness in response to instructions
received from:i. a prospective landlord seeking tofind another person to whom to let
housing, orii. a prospective tenant seeking to findhousing to rent
but does not include any of thefollowing things when done by a person
who does nothing else within the above
descriptions:"Property Agent"––publishing advertisements ordisseminating information;––

providing a means by which aprospective landlord or a prospective
tenant can, in response to an
advertisement or dissemination of
information, make direct contact witha prospective tenant or prospective
landlord;––

providing a means by which aprospective landlord and a prospective
tenant can communicate directly witheach other"English letting agency work” means
letting agency work that relates tohousing in Englandorb.

a person who engages in "English
property management work" within themeaning of Section 55 of the Act.
"English property management work"means things done by a person in thecourse of a business in response to
instructions received from the client
wherei. the client wishes the person to arrange services, repairs, maintenance,
improvements or insurance in respectof, or to deal with any other aspect ofthe management of, premises on theclient's behalf, andii. the premises consist of housing in
England, let under a tenancy.
other than a person who engages inthat work in the course of the person's
employment under a contract of
employment.

18

Effective from 1 April 2019

rics.org/regulation"Property Agents Client Money Protection
Scheme""Regulations""RICS""RICS Registered Firm""RICS Rules of Conduct""RICS Registration Renewal Date""Scheme""Scheme Administrator""Scheme Funds""Scheme Website"a scheme which enables a person on whose
behalf a Property Agent holds money to becompensated if all or part of that money is
not repaid in circumstances in which thescheme applies, this meaning being given
as set out in Section 133(4) of the Act, andwhich is approved by the Secretary of Stateof the Ministry of Housing, Communities
and Local Government, and complies withthe terms of the Regulations
the Client Money Protection Schemes
Property Agents (Approval and Designationof Schemes) Regulations 2018 (SI 2018 No.
751) as amended
The Royal Institution of Chartered
Surveyorsa firm which is registered with RICS for
regulation and which is therefore subject to
the RICS Rules of Conduct
the RICS rules of conduct as determinedby the RICS from time to time and anyother applicable mandatory requirements
set out by RICS , and any other specificand individual requirements notified toany particular RICS Registered Firm as
appropriate
in respect of a Member, the date in eachyear on which its registration as an RICS
Registered Firm is due for renewal, as
notified by RICS
the "RICS Client Money Protection Scheme
for Property Agents" which is approved asa Property Agents Client Money Protection
Scheme by the Secretary of State of the
Ministry of Housing, Communities andLocal Government for the purposes of theRegulations
the person appointed to administer the
Scheme in accordance with Rule 13
funds held by the Scheme Administrator
in respect of its functions as Scheme
Administrator of the Scheme, including theproceeds of insurance cover maintainedby the Scheme pursuant to Rule 10, anyother funds deriving from Levies received
from Scheme Members and any other coverheld in respect of the Scheme provided
that this calculation of Scheme Funds is
intended only for the purposes of assessing
the amount of funds available to meetclaims liability for loss of Client Money under
Rule 8. It shall in no way imply any ring
fencing of such funds, which shall otherwise
remain Scheme Administrator's monies
for it to apply as it thinks appropriate in all
circumstances at its discretion
the website maintained by the Scheme
Administrator in respect of the Scheme atrics.org/clientmoneyprotectionscheme

Effective from 1 April 201919

Client Money Protection2.
2.1

Scheme purpose and approval
The main purposes of the Scheme are:ato allow RICS Registered Firms which are Property Agents to offer client money
protection in accordance with the Rules; andb

to compensate Clients of an RICS Registered Firm for the losses of its Clientsresulting from of the RICS Registered Firm failing to account for Client Money(as defined in paragraph 1.1) to the person entitled to it in accordance with theRules.

2.2 The Scheme only applies to Registered Firms with respect to their Property Agent
activities in England.
2.3 The Scheme is designed to give some protection to members of the public bymaking funds available for their reimbursement when all other avenues havebeen exhausted. RICS Registered Firms which are members of the Scheme canthemselves receive no financial benefit or protection under the Scheme. In the eventof a loss, the primary duty is on the defaulting RICS Registered Firm to make full
restitution from its own resources (whether by paying the loss out of its own assets
or its own relevant insurance cover or otherwise). It is only in cases where the firm
concerned is unable to make full restitution that the Scheme can take effect and so
its Clients may consider whether they can make a claim under Rule 11.
2.4 The Scheme has been approved by the Secretary of State of the Ministry of
Housing, Communities and Local Government and complies with the terms of the
Client Money Protection Schemes Property Agents (Approval and Designation of
Schemes) Regulations 2018 ("the Regulations").
2.5 Any questions relating to the terms of the Rules of the Scheme, Scheme
Membership and claims under the Scheme, should be referred to the Scheme
Administrator.

Scheme Membership3.
3.1

Participation by RICS Registered Firms
Membership of this Scheme forms part of the package of provisions which apply to
RICS Registered Firms.

3.2 Each RICS Registered Firm which is a Property Agent which holds Client Moneymust, as part of its RICS registration, become a Member of the Scheme. Each RICS
Registered Firm is subject to the general rules applicable to RICS Registered Firms
and in addition, in respect of Client Money (as defined in Rule 1.1) held as a Property
Agent, the specific provisions set out in these Rules which form the Property Agents
Client Money Protection Scheme offered by RICS.
3.3

When seeking to become an RICS Registered Firm and thereafter on each RICS
Registration Renewal Date, the Scheme Administrator shall review the RICS
Registered Firm's eligibility to be a Member of the Scheme and its continued
membership of the Scheme.

4.
4.1

Issue of Membership Certificate
Coverage for a Member under the terms of the Scheme shall continue for such time
as a Certificate continues to be an issue in respect of the Member.

4.2 A Certificate of Membership shall be issued:a20

Effective from 1 April 2019

in the case of a firm which is an RICS Registered Firm as at theCommencement Date, as soon as practicable after the Commencement Date;andrics.org/regulationbin respect of a firm which becomes registered as an RICS Registered Firm
after the Commencement Date, as soon as practicable after the date of its
registration.

4.3

The Scheme Administrator shall review a Member's continued membershipof the Scheme on an annual basis. If, in respect of a Member at its particular
RICS Registration Renewal Date, RICS intends to terminate its status as an RICS
Registered Firm and/or to rescind its Member's Membership Certificate, RICS
shall notify the Member accordingly. Unless otherwise specifically so notified, theMembership Certificate issued under paragraph 4.2 shall continue in full force andeffect.

4.4

The Certificate of Membership issued to a Member should be displayed by theMember at each of the Member's premises at which the agent deals face to facewith persons using or proposing to use the Member's services as a Property Agent;
and at a place in each of those premises where the Certificate is likely to be seen bysuch persons, In addition, the Member will make available a copy of the Certificate
on the Member's website (if any). The Member must produce a copy of theCertificate to any person who may reasonably request a copy of it, free of charge.

5.
5.1

Scheme Levies
Levies are payable by a Member for the duration of its Scheme Membership.

5.2 The rate or amount of the Levies in respect of each Financial Year of the Scheme
will be published on the Scheme's Website and notified to the then current Scheme
Members in good time before the commencement of the Financial Year to which
they relate.
5.3

Each Member must pay the Levy for Scheme Membership of such amount as isdetermined by the Scheme Administrator and notified to the Member promptly.
The amount of the Levy for a Member will be invoiced as part of the invoice forlevies payable for RICS Registered Firm status on each RICS Registration Renewal
Date. The Levy paid as at the RICS Registration Renewal Date is intended to be
the Levy for the forthcoming twelve month period after that Renewal Date. It isnoted however that the Financial Year of the Scheme will likely differ from the twelve
month period which will apply to each Member of the Scheme. Should the Scheme
Administrator determine that the Levies determined pursuant to Rule 5.2 in respectof a forthcoming Financial Year of the Scheme (or part of a Financial Year) arematerially higher than were contemplated when a Member's Levy was invoiced in
respect of a period which in part falls in that Financial Year or should the insurance
cover be revised during the course of the Financial Year, the Scheme Administrator
may at its discretion issue an additional invoice for an additional amount of Levy.

5.4

Payment of any Levy invoiced must be made by a Member as a precondition for its
Certificate remaining in full force and effect for the purposes of Rule 4.

6.
6.1

Termination of Membership
Membership of the Scheme shall be coterminous with the duration of a Member's
registration as an RICS Registered Firm and for so long as it remains a Property
Agent. A Member which fails or is reasonably aware that it may fail to meet any ofthe qualifying conditions to be an RICS Registered Firm, or ceases to be a Property
Agent, must notify the Scheme Administrator promptly.

6.2 Membership of a Member will cease if:athe Member ceases to be an RICS Registered Firm.

Deregistration as an RICS Registered Firm shall be determined pursuant to theterms of the RICS Rules of Conduct and will result in cancellation of the firm's
membership of the Scheme with effect from the date that the firm is deregistered.

Effective from 1 April 201921

Client Money Protectionb

the Scheme Administrator (at its sole discretion) determines, whether at
the firm's RICS Registration Renewal Date or otherwise, not to continue aMember's membership of the Scheme.

6.2 Should membership of a Member be terminated, the Scheme Administrator willcancel the Member's Certificate promptly by notice in writing to the Member.
Cancellation of membership of the Scheme will mean that protection under the
Scheme will cease with effect from the date that membership is cancelled. In
the event that membership is cancelled, a former member must stop using and/or remove where displayed any RICS branded material relating to the Scheme
including, but not limited to, the Certificate of membership.
6.3

In the event of the Scheme's closure pursuant to Rule 12, the Member must notify its
clients promptly and seek replacement coverage by an alternative Property Agents
Client Money Protection Scheme.

Client money
7.
7.1

Client Money must be held in a Client Money Account with a bank or building
society authorised by the Prudential Regulatory Authority (PRA), the Bank ofEngland and the Financial Conduct Authority (the FCA).

7.2

A Scheme Member must:

7.3

7.4

22

Effective from 1 April 2019

Handling of Client Moneyamaintain one or more Client Money Accounts into which all Client Money of theMember is paid;ba Client Money Account must be designated as such and easily distinguishedfrom other accounts of the Member;c

all clients of the Member must be advised that Client Money will be held in a
Client Money Account and be notified of the details of that account;dconfirm in writing with the bank with which it holds a Client Money Account thatthe bank acknowledges that monies in the Client Money Account must not be
combined with, or transferred to, any other account maintained by the Member,and the bank shall not be entitled to exercise any right of set up or counterclaim
against money in that Client Money Account in respect of any sum owed to it inrespect of any other account of the Member firm;ekeep records and accounts which show all dealings with Client Money, anddemonstrate that all Client Money held by the firm is held in a Client Money
Account.

As regards handling Client Money, a Scheme Member must:a

have and comply with written procedures for handling Client Money, whichmust comply with any RICS requirement to which Rule 7.4 refers;bpublish their procedures for handling Client Money on their website (if any);cprovide a copy of their procedures for handling Client Money to any person
who may reasonably require a copy, free of charge;dkeep records and accounts that show all dealings with Client Money;erepay any Client Money, including where feasible any interest earned, without
delay if there is no longer any requirement to retain that money or the relevantclient requests it; andfhold and maintain professional indemnity insurance cover that is appropriate for
the Member's size, income, type of work and the amount of Client Money held.

In addition to the specific provisions set out in Rules 7.1, 7.2 and 7.3, the Scheme
Administrator may from time to time issue advice and guidance as to how RICS
Registered Firms should best comply with RICS Rules of Conduct, which may
include guidance to, or prescription of additional required procedures for, RICS

rics.org/regulation

Registered Firms which are members of the Scheme relating to key aspects of bestpractice as to the handling of Client Money.

Compensation for loss of Client Money8.
8.1

Liability for loss of Client Money
In the event that a Member fails to account for Client Money to a person entitled toit whilst remaining an RICS Registered Firm (each Member having a primary duty tomake full restitution as set out in Rule 2.3), the Scheme Administrator shall, out of
the Scheme Funds, make good the Member's liability to that person or persons assoon as reasonably practicable on the terms set out in Rules 8 – 11.

8.2 The Scheme Administrator shall, usually on an annual basis prior to thecommencement of each Financial Year of the Scheme:

8.3

9.

a

determine the relevant limits and risks in respect of which cover is to beprovided, further details of which are explained in Rule 9 below, andbobtain insurance cover under Rule 10 accordingly.

No amount payable shall be subject to a deduction of a fee by the Scheme
Administrator and no Client claimant shall be made to bear all, or any part of any,
excess amount which may be applicable to the insurance cover obtained under Rule
10.

Compensation Limits

9.1

The Scheme provides for members of the public who are Clients of Members of the
Scheme to be reimbursed for any direct pecuniary loss of Client Money. It does notcover any indirect or consequential loss which a Client may suffer.

9.2

The Scheme is designed to offer some protection to Clients where all other avenues
have been exhausted, as explained in Rules 2.3 and 8.1. (Each Member has a
primary duty to make full restitution, as set out in Rule 2.3.) Any Client considering
making a Claim should in the first instance, explore all other avenues, principallyby seeking restitution from the defaulting Member, as is reasonable in all thecircumstances. Possible sources of restitution may include financial indemnity
insurance maintained by the Member or access to other assets of the Member.

9.3

The Scheme Administrator may determine, as it thinks appropriate, any or all of thefollowing: limits per claim: a cap on liability of the Scheme as a whole in respect ofany single Financial Year of the Scheme and/or coverage of, or exclusion of, certain
risks. Details of the current limits, caps and relevant risks (the "Compensation
Limits") are set out in the Annex to these Rules as amended by the Scheme
Administrator from time to time. Any aggregate cap set as a Compensation Limit
shall be determined by the Scheme Administrator with the intention that it shall be inexcess of the maximum probable loss which the Scheme Administrator reasonably
expects might arise for the Scheme.

9.4

The Scheme Administrator shall maintain policies and procedures with a view tomitigating the risk of losses for Clients exceeding any Compensation Limits it setspursuant to Rule 9.3. The Scheme Administrator may impose, whether through the
RICS Rules of Conduct or by individual notification, controls with a view to ensuringthat the prospect of a Member losing Client Money in excess of the Compensation
Limits set by the Scheme Administrator under Rule 9.3 is sufficiently remote.

9.5

The Compensation Limits set pursuant to Rule 9.3 shall be reviewed, alongside
the adequacy of insurance cover under Rule 10.5, periodically as the Scheme
Administrator considers appropriate in all the circumstances. They will be reviewed
in respect of each forthcoming Financial Year of the Scheme by the Scheme
Administrator prior to the commencement of that Financial Year and should any
exceptional circumstances arise to which Rule 10.5 refers. Should the Scheme
Administrator determine to change the limits and/or risks covered within theCompensation Limits, the Scheme Administrator will update the Annex to these

Effective from 1 April 201923

Client Money Protection

Rules and Scheme's Website promptly and any changes will also be notified to
Scheme Members promptly so that, if they wish to review their status as an RICS
Registered Firm, and consequently their membership of the Scheme, they will havethe opportunity to do so, and to make alternative arrangements to join another
Property Agents Client Money Protection Scheme.
9.6

In no circumstances may the individual limit, aggregate limit or risks covered within
the Compensation Limits be amended retrospectively. Any adjustments shall only
apply with effect from a date on or after the date of the adjustment as published on
the Scheme's Website and notified to Scheme Members.

10.

Insurance cover

10.1 The Scheme Administrator shall, in respect of each Financial Year of the Scheme,
secure insurance cover with an Insurer that:acovers any foreseeable liability which may arise in connection with failure of
Scheme Members to account for Client Money to persons entitled to thatmoney under Rules 8 and 9; andb

is appropriate with regard to the size and number of Scheme Members and theamount of Client Money held by Scheme Members.

10.2 The insurance cover obtained for a Financial Year shall be determined by the
Scheme Administrator with the intention that it shall be sufficient to allow the
Scheme to pay out in the case of maximum probable loss which the Scheme
Administrator might reasonably expect might arise in the particular Financial Year.
10.3 The Scheme Administrator shall ensure that the terms for compensation under
Rules 8 and 9 of the Scheme and the terms for the insurance cover obtained under
this Rule 10 are consistent with each other. Liability of the Scheme to pay a Claim
only arises in relation to a risk in respect of which such insurance cover has beenobtained.
10.4 Insurance cover must be obtained in respect of each Financial Year of the Scheme.
The Scheme Administrator shall use all reasonable endeavours to obtain theapproval of the Secretary of State as to the type and amount of insurance coverobtained in respect of each forthcoming Financial Year in respect of the Scheme ingood time before the commencement of that Financial Year.
10.5 Adequacy of insurance cover shall be monitored periodically during each Financial
Year as the Scheme Administrator thinks appropriate in all the circumstances.
(Should exceptional circumstances arise during any Financial Year such that the
Scheme Administrator reasonably considers that the insurance cover is, or may
become, inadequate for the purposes set out in Rule 10.1, it may determine to seekchanges to the insurance cover and, if so, shall seek the approval of the Secretaryof State as to the revised type and amount of insurance cover to be obtained in
respect of the remainder of that then current Financial Year.)

11.

Claims procedures

11.1 This Rule sets out the process for making Claims for compensation under the
Scheme and the procedures that will apply in relation to the investigation anddetermination of such Claims and any complaints under the Scheme.
11.2 Claims for compensation for loss of Client Money shall be made in accordance withsuch procedures as the Scheme Administrator may determine and notify to Scheme
Members from time to time.
11.3 Conditions are kept to the minimum but two important conditions are thata24

Effective from 1 April 2019a Member must report any known or suspected loss to the Scheme
Administrator as soon as possible after a Member becomes aware of it. Even
if the Member does not know the full extent or details of the Client loss, theMember should advise the Scheme Administrator as soon as it becomes awareof the problem.

rics.org/regulationb

where fraud or dishonesty is suspected, then the details must also be reported
to the police and other relevant authorities.

11.4 In respect of a Claim or a potential Claim, a Member must,:aSubmit a notice in writing of any potential Claim as soon as practicable giving
all reasonable and necessary information assistance and proof of any Claim as
the Scheme Administrator may reasonably require;bagree to cooperate fully with any investigation by the Scheme Administrator or
their nominated representative;cagree to onsite visits to the addresses in which their records and accounts
showing all dealings with Client Money are held;dproduce, in response to all reasonable requests by the Scheme Administrator,
all records and/or documents relating to matters pertinent to the Scheme for
the Scheme Administrator and any nominated representative;erespond to all communications promptly when requested to do so by the
Scheme Administrator;fmake every reasonable effort to minimise any Client Money loss and to takeappropriate measures immediately if they are required to reduce any Claim; andggive the Scheme Administrator all reasonable assistance which may reasonably
be required to pursue compliance with the terms of the Rules.

11.5 Claims will only be accepted by the Scheme Administrator in respect of a Member
which occurred during such time as the Member is a Member of the Scheme.
11.6 The Scheme Administrator shall accept notification of Claims for compensation
under the Scheme for twelve months after the date on which the circumstances
giving rise to a Claim occurred.
11.7 Any Claims should be submitted in writing to the Head of Registration andCompliance, RICS Regulation, 55 Colmore Row, Birmingham B3 2AA. The Scheme
Administrator will acknowledge receipt of any Claim within seven working days.
11.8 Upon receipt of all information needed to substantiate a Claim, the Scheme
Administrator hopes to be able to settle the claim quickly. Clients who are claimants
will be kept informed of progress and advised of any reasons for any delay in theprocess. The Scheme Administrator will only make payment of any Claim to a Client
once it has followed the terms of the claims procedure set out in this Rule and theInsurer has paid out to the Scheme Administrator in respect of that Claim under theterms of the insurance cover obtained under Rule 10.
11.9 Upon payment of any Claim to a Client by the Scheme Administrator out of the
Scheme Funds, the debt/loss will be assigned to RICS for them to pursue any
recovery against the firm or persons responsible. The Scheme Administrator
may require payment by a Member into the Scheme of an amount additional to its
Levies which is equal to the detriment suffered by Scheme Funds as a result of theMember's failure to comply with any conditions in these Rules.
11.10 The Scheme Administrator shall maintain a Claims complaints handling policy which
it shall apply in the event of any complaints arising from Clients who make Claims
under the Scheme. Details of the Claims complaints handling policy shall be madeavailable on request to Scheme Members and Clients.

General matters
12.

Duration of the Scheme

12.1 The Scheme Administrator shall continue to offer the Scheme for so long as RICS,
at its discretion and for any reason, decides to do so and provided that appropriate
insurance cover can be obtained for the purposes of Rule 10 and renewed on anannual basis which matches the liability for loss of Client Money pursuant to Rules 8
and 9.

Effective from 1 April 201925

Client Money Protection

12.2 The Scheme Administrator may at its discretion determine to close the Schemewith effect from the Scheme Closure Date having given due written notice to theSecretary of State and to Scheme Members and having provided details of the plans
for an orderly closure of the Scheme.
12.3 The Scheme Administrator may determine to close the Scheme should it fail toobtain the approval of the Secretary of State to the type and amount of insurance
pursuant to Rule 10 in respect of any prospective renewal of the Scheme's
insurance for the forthcoming Financial Year of the Scheme.
12.4 The Scheme may also be required to be closed should the Secretary of State
withdraw the approval of the Scheme pursuant to Regulation 9 of the Regulations.
12.5 In the event of the Scheme's closure pursuant to the above revisions of this Rule 12,
the Scheme Administrator:awill, in devising its plans for closure of the Scheme, have due regard to the needto enable an orderly transfer of Scheme Members to an alternative Property
Agents Client Money Protection Scheme before the Scheme Closure Date.
(Determination of the Scheme Closure Date shall have due regard to such needto enable the orderly transfer of Scheme Members.)bgive written notice to each Scheme Member of the fact of closure; the reasons
why the Scheme is being closed; and the Scheme Closure Date;cin the written notice to which paragraph (b) refers, set out procedures which
are designed to facilitate the smooth transfer of the Scheme's Members toan alternative designated or approved Client Money Scheme which shall be
intended to be at no additional cost to scheme members before the Scheme
Closure Date.

12.6 The Scheme Administrator shall not accept any new member or any membershiprenewal once it has determined to close the Scheme and, in any event, on no
occasion after the Scheme Closure Date.

13

Scheme Administrator

13.1 As required by the Regulations, the Scheme Administrator shall be independent
from the Scheme Members, offering protections such that:athe Scheme shall not be subject to interference from Members and Members
will not be able to influence the payment of any claims; andbthe decision making process for the appointment of the Scheme Administrator
shall be taken by RICS in accordance with its own procedures and therefore
not subject to the risk of influence of any Members which are subject to apotential Claim or investigation.

13.2 The first Scheme Administrator is RICS itself.
13.3 RICS may determine to appoint an alternative Scheme Administrator, in which event
it shall notify Scheme Members and update the Website accordingly.

14

Rule Amendments

14.1 These Rules are the rules in force as at 1 April 2019.
14.2 The Scheme Administrator may revise the terms of any Compensation Limits as
it considers it appropriate on the basis set out in Rule 9.3 and the adequacy of
the insurance cover on the basis set out in Rule 10.5 as it considers it appropriate
from time to time. These provisions will be reviewed by the Scheme Administrator
prior to the commencement of each Financial Year of the Scheme and should any
exceptional circumstances arise during a Financial Year.
14.3 The Rules may also be amended as determined by the Scheme Administrator in any
other respect, subject to such amendments not prejudicing approval of the Scheme
as a Property Agents' Client Money Protection Scheme by the Secretary of State.

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rics.org/regulation

14.4 If and when the Rules are amended Members shall be notified promptly before theRule changes come into force and they shall be made available on the Scheme's
Website. Scheme Members should ensure that at all times they are referring to themost up to date copy of the Rules of the Scheme.

Effective from 1 April 201927

Client Money Protection

Annex: Compensation Limits
This Annex sets out the current Compensation Limits for the purposes of Rule 9.3.
1

Direct loss: Rule 9 makes it clear that the Scheme provides for reimbursement only
in respect of direct loss of client money and covers no indirect or consequential loss.
In addition there are specific exclusions as follows. These are determined by the
Scheme Administrator for the purposes of Rule 9.2 and as set out in this document.

2

Limit per claim: £50,000

3Cap on liability of the Scheme as a whole in respect of any single
Financial Year:
The Total Aggregate Limit available to pay Claims is£30,300,000.
The initial amount of £10,300,000 is also available to meet any Surveying
Services Client Money Protection Claims payable under the Appendix 1
Scheme and any TDS Claims to which Appendix 3 refers. This initial amountof £10,300,000 can be utilised for any of the three types of cover.
The additional sum of £20,000,000 is only available for Property Agent Client
Money Protection Claims.

4

Risks covered / excluded

Exclusions from cover are as follows:a

Loss of client money that is jointly held by a Client and a Scheme Member
where the Client has contributed to such loss. However this exclusion will not
apply to innocent Clients.

b

Loss arising or occurring elsewhere than in the United Kingdom of Great Britain
and Northern Ireland, the Channel Islands or the Isle of Man.

c

Loss of any consequential nature including but not limited to loss of potential
income interest and dividends not realised by the Client because of a loss
covered by the Scheme.

dPenalties, fines or similar impositions.

eLosses arising due to the failure of any bank or deposit taker in which a Client
Money Account is heldfLoss due to investment, where the investment is specifically agreed in writing
with the clientg

Loss of investment incomehLoss or damage directly or indirectly occasioned by, happening through or in
the consequence of war, invasion, acts of foreign enemies, hostilities (whether
war be declared or not), civil war rebellion, revolution, insurrection, military or
usurped power or confiscation or nationalisation or acquisition or destructionof or damage to property by or under the order of any government or public or
local authority.

iLoss, damage, cost or expense of whatsoever nature directly or indirectly
caused by resulting from or in connection with any act of terrorism regardlessof any other cause or event contributing concurrently or in any sequence to theloss.
Loss, damage, costs or expense of whatsoever nature directly or indirectly
caused by, or resulting from or in connection with any action taken incontrolling, preventing, expressing or in any way relating to any act of terrorism.
For this purpose, an "act of terrorism" means an act including but not limited tothe use of force or violence and/or the threat thereof, or any person or group(s)of persons, whether acting alone or on behalf of or in connection with any

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organisation(s) or government(s), committed for a political, religious, ideologicalor similar purposes including the intention to influence any government and/or
put the public, or any section of the public, in fear.

Effective from 1 April 201929

Client Money Protection

Appendix 3: TDS Deposits
The Dispute Service Limited (TDS) has been appointed by the Secretary of State
for Communities and Local Government under the provisions of Schedule 10 of the
Housing Act 2004 to collect and hold Tenancy Deposits from agents and landlords who
are registered with it as members of the Insurance Based Tenancy Deposit Protection
Scheme (IBTDP) in England and Wales and to distribute such deposits in accordance withany adjudication made by TDS or by the Courts or by any other body appointed by TDS to
adjudicate in such cases.
TDS has a wholly owned subsidiary Tenancy Deposit Scheme Northern Ireland Limited(TDSNI) which has been appointed by Ministers in the Department of Social Developmentin Northern Ireland under The Tenancy Deposit Schemes Regulations (Northern Ireland)2012 to operate both a custodial tenancy deposit protection scheme and an IBTDP
Scheme in Northern Ireland. TDSNI is appointed to collect and hold disputed tenancy
deposits from agents and landlords who are registered with it as members of the IBTDP
Scheme in Northern Ireland and to distribute such deposits in accordance with any
adjudication made by TDSNI or by the Courts or by any other body appointed by TDSNI
to adjudicate in such cases.
RICS has agreed with TDS that Claims by TDS or TDSNI, or their appointed insurer
representatives, made against RICS Members and RICS Registered Firms will be paidin accordance with an insurance policy taken out by RICS, up to an aggregate limitof £3,000,000 in respect of any Financial Year – being each period of twelve months
beginning on 1 April. RICS has made such an appropriate insurance arrangement withCMP Insurance PCC Limited, a subsidiary of RICS which is an insurer authorised by the
Guernsey Financial Services Authority.
It should be noted that the agreement between RICS and TDS for RICS to meet Claims
up to an aggregate limit of £3,000,000 in any one Financial Year is limited to claims forprotected tenancy deposit monies made against RICS Members and RICS RegisteredFirms by TDS or TDSNI and shall not be taken to include any associated legal costs oradvisory costs, damages or interest incurred by TDS or TDSNI or their appointed insurer
representatives.
For any amount over £3,000,000, the claim amount remains with TDS or TDSNI, asappropriate.
RICS may from time to time issue guidance or additional required procedures for RICS
Registered Firms which are members of TDS or TDSNI relating to the above matters if it
thinks it appropriate.

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Effective from 1 April 2019

Confidence throughprofessional standards
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