Expansion of the Dormant Assets Scheme by FCA

On Friday, the Financial Conduct Authority (FCA) issued its consultation on the Expansion of the Dormant Assets Scheme.  This follows legislation passed in February 2022 under the Dormant Assets Act 2022.

The Dormant Assets scheme was introduced by the Dormant Bank and Building Society Accounts Act 2008 covering, as you may have guessed, dormant bank and building society accounts.  Dormant funds are passed by banks and building societies to improve and reduce financial exclusion and problem debt, to invest in and break down barriers to work for younger people, and to invest in charities and social enterprises for the good of all.

That said, in 2016 the Independent Commission on Dormant Assets was established to examine how the scheme could be improved and bring new funds in to expand the Dormant Asset Scheme to do more good for society.

The expanded scheme of asset classes now to be considered after consultation between the FCA and the financial services industry, include dormant accounts from:

• Client money 
• Investment assets  
• Insurance funds
• Pensions 
• Securities 

The government estimates this new Act could unlock a further £880 million for good causes.

The consultation with the industry is to consider how the FCA proposes to implement the scheme expansion in practice and what barriers may be faced by the industry in implementing the same to protect investors but also to identify and distribute dormant account assets for the benefit of society.

The consultation period ends on the 17 June 2022.