Client Money

Client money refers to funds held by a firm on behalf of its customers, which must be kept separate from the firm’s own money to ensure protection if the firm fails or becomes insolvent.

Under UK regulation (notably the FCA’s CASS rules), firms such as brokers, investment managers, and insurance intermediaries are required to segregate client money into dedicated client accounts, maintain clear records, and perform daily reconciliations.

The aim is to safeguard clients’ assets and ensure prompt repayment or transfer if the firm cannot continue trading.

Example:

A UK investment platform receives £10,000 from a customer to buy shares. The funds are placed in a ring-fenced client money account until the trade settles, ensuring they cannot be used for the firm’s own expenses.

Used in:

Financial services, investment management, and regulated firms under the FCA’s Client Assets Sourcebook (CASS).