ARLA Propertymark says there has been a breakthrough on the banking clampdown on pooled client accounts – a pain in the neck for agents for some time.
Banks have been judging letting agencies as higher risk when applying to open PCAs if those agents are not registered with HMRC for Anti-Money Laundering supervision.
However, letting agents aren’t even required to register with HMRC for AML supervision unless they deal with one or more transactions above 10,000 euros per month.
This means many agents are being penalised by banks despite abiding by HMRC rules.
Now an announcement from ARLA says: “We are pleased to announce that … improved guidance has been published in order to make it easier for letting agents to meet their legal obligations.”
ARLA says that while the new guidance is not legally binding, it does receive HM Treasury approval and is therefore an important step forward for hundreds of letting agents across the UK.
The revised 2020 guidance now acknowledges the distinction between the AML and CMP requirements for letting agents.
An ARLA statement says: “This means that banks should be considering whether the customer is subject to the AML regulations, but crucially also other regulatory or professional conduct obligations such as client identification rules, professional conduct rules relating to dealing with funds in PCAs or client money protection regulations.”
It continues: “Propertymark will continue to work with agents who encounter difficulties with banks in setting up client accounts, but the improved guidance should make it easier for letting agents to obtain PCAs going forward.”
Timothy Douglas, the association’s policy and campaigns manager says: “We know that many agents have found it very difficult to open client accounts with no legal requirement for all letting agents to register with HMRC for AML supervision. Consequently, this makes it very difficult for letting agents to adhere to the Client Money Protection rules.
“With the legal requirements on letting agents being made clearer to banks, they should now be able to distinguish between the two sets of regulations whilst taking reasonable measures to establish and document the purpose of the Pooled Client Accounts.”
This post has originally been featured in Letting Agent Today.