Watson Day Chartered Surveyors

Client Money Protection

CLIENT MONEY HANDLING PROCEDURE  

This document summarises Watson Day’s Client Money Handling procedures and internal controls designed to follow best practice and RICS regulations.  It should be read in conjunction with the RICS Professional Standard, Client Money Handling, 1st Edition October 2019. As this document is designated a Professional Standard (PS) it must be followed.  

There are two categories of money – Client Money and Office Money.  

The RICS Definition of client money– Money of any currency (whether in the form of cash, cheque, draft or electronic transfer) that: · An RICS-regulated firm holds for or receives on behalf of another person, including money held by a regulated firm as stakeholders; and · Is not immediately due and payable on demand to the RICS-regulated firm for its own account; but · Excluding fees paid in advance for professional work agreed to be performed, and clearly identifiable as such, unless the fees are for works undertaken as ap property agent as defined by the rules of the RICS Client Money Protection Scheme for Property Agents.  

The RICS Definition of office money – Money of any currency belonging wholly to the RICS-regulated firm or its principals. (Examples of office and client money can be found in Appendix A of the PS.  

1. Receipting Client Money

All client money held or received by WD must be banked in either: (A) the WD general client bank account (settlement account); or (B) the designated discrete account for that client. (Client accounts are under the exclusive control of WD and are covered by the RICS Client Money Protection Scheme).  

• a) a general client bank account is a client bank account which holds pooled client money for multiple clients .  
• b) A designated discrete bank account is a bank account set up to hold client money for a single client. The name of the client will be incorporated into the account name.  

Money receipted is to be promptly allocated by the Accounts Dept to the correct client within the client account on the business day of receipt. (“Promptly” is defined in the PS as seven days from receipt). Post is opened in the presence of two members of staff. Cheques received are to be logged on the “Cheques in Post” sheet before being given to the Accounts Dept and banked on the day of receipt unless there are extenuating circumstances in which case the cheques are to be locked aware securely until being banked. If an unknown sum is received that cannot be allocated due to insufficient information, it must be allocated to the Client settlement Account until it can be identified. Amounts that cannot be identified are to be returned to the sender within one month. Cash receipts are not accepted.        

2. Payment of Client Money

Accounts Dept staff are responsible for administering payments to clients and where appropriate their contractors. Prior to adding payments to the online banking system, checks must be made to determine that sufficient funds are held by the relevant client. All payment requests from contractors, service providers etc must be supported by an invoice and authorised in writing on the documentation by a partner. Payments loaded onto the banking platform by Account Dept staff are to be authorised by two Partners before payment. Supporting documentation is provided to the Partner in the form of scanned copies of authorised invoices, client statements etc, together with the corresponding bank payment schedule to enable comparison. Client Account cheque books and bank line log-in devices must be kept in a locked drawer with a key held only by a Partner.  

Fraud avoidance – there are increasing email fraud attempts to impersonate clients to divert monies. If a client requests changes to their bank accounting details by email or by letter, this must be verified independently with them by phone call with a subsequent confirmation back to them by letter or email –check the email address against those held for them. If an employee of the client is requesting the change, for example by phone, ensure that the verification is with a known Principal.  

3. Bank Reconciliation

Bank reconciliations are performed on a monthly basis on all accounts. Per RICS regulations a three-way reconciliation must be performed between the bank statement, general ledger and individual client ledger cashbooks. All bank reconciliations are reviewed and signed off by a Partner.  

4. Providing Information to Clients about Monies Held on Their Accounts

Client monies are the property of the client and are payable to them at their request. Each client will receive client money information at a monthly or quarterly frequency by arrangement.  

5. Interest and Bank Charges

Any interest earned on the client account accrues to that account and belongs to the client. Similarly, any charges for that account are charged to that account. Our client account system currently does not charge for normal BACS credits and payments. Charges are only usually applicable if on the rare occasion we are instructed to make a CHAPS payment.