Working with government to make the most of people’s unclaimed assets
03 March 2017
We have been working with the Government to widen the scope of the Dormant Asset Scheme (“DAS”), which could potentially free up billions of pounds for good causes.
It’s a unique project, where we are able to offer creative solutions and options aiming to increase funds going to good causes, delivering a practical and commercial solution for dormant assets across the market.
What is the Dormant Asset Scheme?
The Scheme, set up by the Dormant Bank and Building Society Accounts Act 2008, currently enables banks and building societies to pass dormant, or unused, accounts to a corporate body called the Reclaim Fund Limited. The intention is that those funds may then be used for good causes. So far, the DAS has resulted in nearly £1bn of assets being transferred.
Widening the asset classes that can be transferred could free up many billions more for good causes.
Following the success of the DAS, but noting its limited scope, the Government has now set itself two further broad objectives:
- To encourage the Financial Services industry to improve current tracing efforts, so that there is a much greater likelihood that people will be reunited with their assets.
- Where dormancy does exist, enable those assets to be made available for good causes, while protecting the right of people to reclaim the value of those assets.
To consider these objectives and recommend how a wider set of asset classes could be included, the Government established the Dormant Asset Commission (or “DAC”) and it is the Commission that has provided Government with its recommendations for the industry.
What does this mean for financial services firms?
While the recommendations made by the DAC are to maintain the voluntary nature of the scheme, they have potentially wide reaching implications for the Financial Services industry in the UK. It will especially impact firms with high numbers of untraceable or unresponsive clients.
Financial Services firms need to review the DAC report and consider how they and their stakeholders, such as customers or shareholders may be impacted, if the recommendations are implemented, as achieving Government’s objectives will involve significant change.
At their most complex, some recommendations will require changes to existing regulations and trust law. Even facilitating “easy wins” is likely to require legislation, both of which could alter the legal and regulatory landscape for Financial Services.
So, how has PwC been helping the Dormant Asset Commission?
Our team of experts, with technical knowledge of the different asset classes, and commercial, legal, regulatory, tax, and operational experts advised on the implications of extending the Scheme. We delivered detailed insight into defining some of the issues that needed to be addressed, such as the practical, regulatory and legal implications of transferring and holding assets from unit trusts.
We are now advising the Government on the options put forward by the Commission, focusing on the practicalities of implementation from a commercial and technical point of view. If you would like to understand more about what we are doing, or how it may affect you, please contact Mark Batten or James Ferris.