Find out how this modification works and how to take advantage of it.
How this modification works
This modification will enable Child Trust Funds (CTFs) providers to move matured CTFs to a protected account (a matured CTF account or protected ISA) or by bulk transfer to a new provider, when reasonable steps have been carried out to contact the client, but the client is deemed a gone away or uncontactable.
Under the unmodified rules, CTF providers are prevented from moving the matured CTF to a protected account until they have received instructions from their client. However, this may be problematic if the client is uncontactable for example, mailings are returned, or no contact is received from the client and it practicable to assume the client is 'gone away'.
HMRC legislation requires CTF providers to move any dormant CTFs to a protected account, which can either be a matured CTF account or a protected ISA, but our requirements under COBS 8.1.1 R, COBS 8.1.2R and COBS 8.1.3R may make this difficult unmodified.
What this modification means for firms
We acknowledge that the rules unmodified may prevent CTFs to carry out its obligations under HMRC legislation in response to dormant CTFs. This modification means the requirements in COBS 8.1.2R and 8.1.3R only apply once the firm is able to contact the client. This modification should ensure that the firm is able to provide (or continue to provide) services in relation to a non-contactable client’s CTF investments for what could be a protracted period during which the firm is unable to satisfy the client agreement requirements in COBS 8.1.
This modification is valid for 5 years from the start date of the direction unless subsequently withdrawn.
How to use this modification
You can take advantage of this modification by consent by:
- Submitting your notification application to us via our Connect[2] system. You can access Connect by signing in to My FCA[3] with your existing details. Please see our user guide[4] to assist with your submission.
- We will then write to you to confirm that the modification has been granted and publish each modification direction we grant on our website.