Dormant Assets Scheme expanded - a new awakening

The Dormant Assets Act 2022 has now received Royal Assent. A separate piece of secondary legislation will be needed, though, before a date is set for the measures to come into effect.

As we reported last year, the Dormant Asset Scheme - established by the Dormant Bank and Building Society Accounts Act 2008 and launched in 2011 – is being expanded to include the insurance, pensions, investment and wealth management, and securities sectors.

This is expected to unlock a further £880 million of dormant assets – these are accounts that have been open but unused for at least 15 years and with which the provider has been unable to reunite the owner. See our earlier article for more detail regarding the Scheme.

The expansion is likely to be widely welcomed by investment firms that face problems with “Gone Aways” (ie, clients or fund investors that have lost contact and cannot be traced). However, changes to the FCA Rules (in particular, we expect, to the CASS and COLL Sourcebooks) are needed before investment firms are able to use the Dormant Assets Scheme, so they must await publication of the proposed rule changes. In addition, firms will first need to enter into an agreement with the operator of the scheme, Reclaim Fund Ltd.

The Government has announced that it will launch a public consultation in the summer to look at what causes in England should benefit from this additional money - proposals are likely to include boosting investment in youth programmes, social enterprises and money management support.

Up to now, the Dormant Assets Scheme has so far unlocked the following amounts to benefit social and environmental initiatives across the UK:

• £700 million in England
• £67.2 million in Scotland
• £37.7 million in Wales
• £22.4 million in Northern Ireland.