Lloyds Banking Group – pooled client accounts

Earlier this year, we were made aware that Lloyds Banking Group were reviewing pooled client accounts held by RICS regulated firms and withdrawing them where the firms anti money laundering (AML) standards were assessed and deemed insufficient for this type of account.

Senior staff at RICS met with Lloyds at the end of November in order to discuss the position and to work together to ensure that RICS regulated firms can continue to protect clients’ money through pooled client accounts.

Lloyds’ position on withdrawing pooled client accounts is due to concerns over compliance with AML regulations. Following a review earlier this year, Lloyds informed us that a number of businesses, including around 20 RICS regulated firms, did not, in their view, have suitable controls in place in respect to anti-money laundering. Unlike many other banks, we also understand Lloyds will not accept being registered with HMRC as automatically meeting their requirements.

We are working with HM Treasury, HMRC and other stakeholders to ensure that HMRC’s role as a supervisor is recognised by the banking community, and also helping to develop guidance for banks on accepting pooled client accounts for those firms undertaking activities that do not fall under the money laundering regulations (which may include some changes to our client money assurance work in due course).

In the meantime, we would encourage all firms banking with Lloyds to respond promptly to requests for information and ensure that submissions reflect the money laundering risks to their businesses. For those firms whose AML controls have only just fallen short of expectations, they will permit those businesses to continue holding pooled client accounts for a limited time (circa 9 months) while those firms enhance their policies.

Lloyds have informed us that they will shortly be contacting those firms which have been impacted, but should you think you may be affected, you should contact your Lloyds Relationship Manager.

RICS regulated members should be aware of the publication of the RICS Professional Statement Countering bribery, corruption, money laundering and terrorist financing which was published in 2019. Following this, we are planning a thematic review of AML protections at RICS regulated firms and will co-ordinate closely with HMRC on this and we will communicate further details early in 2020.

Jonathan Gorvin, Head of Regulatory Policy & Development, RICS