From Andrew GreenIt’s about time to set the record straight: if a valuation fee is paid to the broker or packager, permission to hold client money is required. The statements below are taken directly from the FSA’s website. Q: When is money received and held by mortgage intermediaries considered to be client money? A: Client money is money of any currency which, in the course of carrying on mortgage mediation activity, an intermediary receives and holds on behalf of a client, either in a bank account or in the form of cash. Client money would include, for example, money received and held to pay a valuation or survey fee to a valuer or surveyor. However, if an intermediary simply receives a cheque made payable to a third party valuer or surveyor, that will not be client money. Finally, money that is due and payable to an intermediary – for example, an administration or brokerage fee – is not client money. Q: What does a mortgage intermediary need to be able to hold client money? A: A mortgage intermediary that wants to hold client money must have permission from us to hold client money as part of its Part IV Permission as set out in AUTH 3.14; meet the higher capital requirements set out in PRU 9.3.30R; and hold the higher PII excess required by PRU 9.2.18R. (Where the firm seeks to have a higher PII excess than set out in PRU 9.2.18R, there is an additional capital requirement as well – see PRU 9.2.21R and 9.2.22R). I trust this clears up the issue.