HC Deb 24 July 1991 vol 195 cc720-1W
Mr. Cousins

To ask the Secretary of State for Trade and Industry what regulation exists with regard to the handling of client money by members of the Law Society, estate agents, mortgage brokers, accountants and members of the Investment Brokers Registration Council; and whether he proposes to make changes in such regulations.

Mr. Redwood

[holding answer 18 July 1991]: The main provisions affecting the handling of client money by members of the Law Society are those of the Solicitors' Accounts Rules 1986, made by the Law Society under the Solicitors Act 1974. There are no plans to amend these.

The Estate Agents (Accounts) Regulations 1981, made under the Estate Agents Act 1979, regulate the handling of client money by estate agents. No changes are proposed.

Persons authorised to carry on investment business under the Financial Services Act 1986 are subject to regulations made under it by the Securities and Investments Board and/or to the rules of the regulatory bodies recognised under the FSA, in respect of client money for FSA-regulated investment business. I understand the SIB intends to introduce revised regulations later this year.

There are no statutory rules governing the handling of client money by mortgage brokers in their capacity as such. But many mortgage brokers are subject to the FSA regulations because they also conduct regulated investment business.

There are no statutory rules governing the handling of client money by accountants in their capacity as such. However, the Institute of Chartered Accountants in England and Wales is introducing rules for its members' general business which will come into force next year. They will be closely modelled on those made under the FSA which already apply, in respect of such business, to accountants carrying on FSA-regulated investment business.

I assume that the hon. Member refers to the Insurance Brokers Registration Council. The council has rules governing the handling of client money by registered brokers. Amendments are in the first instance a matter for the council, although the rules are subject to approval by order under the Insurance Brokers (Registration) Act 1977. Registered brokers authorised by the council to conduct investment business under the FSA are not permitted to handle client money connected with such business.