In recent years, PIMFA has been involved in a number of financial services industry-wide dormant asset initiatives.

The original Dormant Assets Scheme (DAS), defined in the Dormant Bank and Building Society Accounts Act 2008, identified bank accounts as dormant when they had been untouched for at least 15 years, and where the bank or building society had been unable to trace the owner. The Banks and Building Societies could then voluntarily channel the funds from those dormant accounts to the Reclaim Fund, The Reclaim Fund (RFL) is owned by HM Treasury, and authorised and regulated by the FCA. The RFL enables dormant account monies to be used to help social and environmental initiatives across the UK.

HM Treasury consultation on expanding the dormant assets scheme – February 2020

In this consultation paper, HMT sought industry views on expanding the scope of the dormant assets scheme, to include proceeds of life insurance and retirement income policies, shares or units in collective investments, certain investment asset distributions and proceeds, shares and distributions from shares in plcs, and proceeds from corporate actions.

One of the key issues which had prevented the inclusion of dormant shares or units in collective investments from the scheme previously was the question of what to do if the shareholder later comes forward to claim their shares? Should the firm reimburse their client with the value of the share when it was transferred to the DAS, or the current market value of the shares?

Government response to the consultation on expanding the Dormant Assets Scheme – May 2023

In their response, HM Treasury considered the options for reimbursement to clients and concluded that in recognition of the value of providing clarity and transparency to both participants and owners, the government would formalise the most common market practice that provides some entitlement to owners – to align the reclaim values to the value of the shares when they were transferred to the RFL.

Next steps

The government intends to legislate for Scheme expansion when parliamentary time allows. It recognises and welcomes the strong interest in how future dormant assets funding could be spent and is considering whether this is an area that should be reviewed. In the interim, they will continue to support industry, regulators, and RFL as they prepare to join, regulate, and administer an expanded Scheme.