Commentary on provisions of Act Section 22: Client money protection schemes: approval and designation
This section amends the Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2018 (the Approval Regulations).
	Subsection (2) provides that the definition of client money does not include any money that has already been protected through a Government approved tenancy deposit scheme.
	Subsection (3) amends Regulation 4 of the Approval Regulations (amendments to an approved scheme) to clarify that the consent of the Secretary of State would not be required if the amendment had been made by the scheme administrator in accordance with a notice served on the scheme administrator by the Secretary of State pursuant to Regulation 8 of the Approval Regulations.
	Subsection (4) (a) to (c) amends Regulation 5 of the Approval Regulations (Conditions which must be satisfied before approval may be given) to provide that client money protection schemes can allow limits per individual claimant and scheme aggregate limits up to such an amount as the Secretary of State considers appropriate, which would be intended to be no less than the scheme's maximum probable loss. It also provides that client money protection schemes are not required to provide cover for risks that the Secretary of State consider it inappropriate for the scheme to insure against.
	Subsection (4)(d) provides that for a transitional period of 12 months until 1 April 2020 property agents are permitted to join a scheme if they are making all efforts to apply for a client account with a bank or building society authorised by the Financial Conduct Authority but have not yet obtained one.
	Subsection (5) amends Regulation 8 of the Approval Regulations (conditions with which scheme administrators must comply) to clarify that a certificate confirming a property agent's membership of the scheme must be provided as soon as reasonably practicable after that agent joins a scheme or after the scheme rules are amended. This certificate includes information on the individual claimant and scheme aggregate limits and details of where to find information on excluded risks.
	Subsection (5) also provides that the Secretary of State may serve a notice on the scheme administrator requiring that person to amend the scheme rules to replace the limits per individual claimant or scheme aggregate limits with such an amount as the Secretary of State considers appropriate, or to amend the risks covered. Any such notice needs to be complied with within 30 days or such a longer period as the Secretary of State may specify.
	Subsection (5)(c) provides that the scheme administrator must maintain insurance that covers any foreseeable liability and that is appropriate with regard to the size and number of scheme members and the amount of client money held by these members. It also clarifies that the Secretary of State must approve the renewal of the scheme's insurance to ensure continued compliance with the obligation to maintain cover which is appropriate.