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A Client Money Account (CMA) is an account opened by a UK and European Economic Area regulated firm to hold money that belongs to one or more of that institution’s clients.
In the case of a CMA, the firm acts as a trustee of the account, but the funds still belong entirely to the client(s). Money in a CMA is held separately from the firm’s own funds, so that there is no co-mingling of client money with money belonging to the firm itself. CMAs must also always be clearly identified, so that there is no potential for confusion between client funds and the funds of the firm.
Client money accounts are useful in a variety of instances, including when fintech companies are holding funds on behalf of clients of their own or when funds need to be held in a trust. Accountants and solicitors (or lawyers), may also need CMAs to keep funds on behalf of clients.
In some cases, these accounts are regulated by the UK’s Financial Conduct Authority (FCA). CMAs may also be regulated by individual regulatory body’s specific to an industry—for example, a CMA for an accountant could be subject to regulation by the Association of Chartered Certified Accountants (ACCA) or the Institute of Chartered Accountants in England and Wales (ICAEW), among others. The same is true for other professions, too: if members of a given profession have client money accounts, then those CMAs are subject to profession-specific regulation.
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