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The Dormant Assets Scheme: a blueprint for expansion

  • United Kingdom
  • Financial services and markets regulation
  • Financial institutions

04-04-2019

The Industry Champions published their report on The Dormant Assets Scheme: A Blueprint for Expansion on 4 April.

Following our participation in the independent Commission on Dormant Assets in 2016 which resulted in the recommendations in March 2017 which preceded the Champions’ report, Eversheds Sutherland acted as sole legal advisers to the Investment and Wealth Management Group, responsible for the recommendations in Chapter 8. Partner Andrew Henderson, assisted by Alicia Kaupp-Roberts, chaired the Legal Experts Group, drawn from all other Groups, which produced the recommendations in Chapter 10 on legislation and regulation.

The Champions agreed four core principles for expansion of the Scheme:

Principle 1: Prioritise reunification efforts - the first priority for all firms participating in the scheme is to seek to reunite owners with their assets. Only when reunification efforts are unsuccessful should assets be redirected to Reclaim Fund Limited.

Principle 2: Maintain a voluntary scheme - participation by firms in the dormant assets scheme is, and should continue to be, voluntary.

Principle 3: Provide full restitution in perpetuity - beneficial owners should continue to be able to reclaim, in perpetuity, the amount that would have been due to them had a transfer into the scheme not occurred.

Principle 4: Tailor definitions of dormancy - due to significant differences in market practice across the four sectors, imposing a single definition of dormancy would be inappropriate and might risk lowering participation rates. Instead, the definition should be calibrated to the nature of the financial product and the experience of customer behaviour.

We look forward to being involved in the next phase of expansion which will involve giving effect to changes in the law.

To read the full report, click here.

To read the summary report and recommendations, click here.

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