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“Your Money” Clause in Banking or Investment Agreements
A “Your Money” clause is a contractual provision that governs how a bank, investment firm, or other financial entity holds and manages funds on behalf of a client. It typically appears in agreements involving client money, escrow accounts, or segregated accounts, and is designed to protect both the institution and the client by setting clear rules for fund handling, segregation, and withdrawal.
Key Elements of a “Your Money” Clause
Based on sample clauses from Law Insider Law Insider, a typical “Your Money” clause may include:
Segregation of Funds
The institution will treat any money it holds on your behalf as Client Money and keep it in a segregated bank account (often a pooled client account with one or more third-party banks) to protect it from commingling with the institution’s own funds Law Insider.
No Liability for Third-Party Banks
The institution will not be responsible for the acts or omissions of any third-party bank or credit institution holding your money Law Insider.
Interest Waiver
You waive any entitlement to interest on the held funds, as the institution may not pay interest on such accounts Law Insider.
Transfer Rights
The institution may transfer your money to a third party in the event of a business transfer, subject to applicable regulations Law Insider.
Withdrawal and Access
You retain the right to withdraw or deal with your funds as per the agreement, but certain arrangements (e.g., term deposits) may affect availability in case of insolvency Law Insider.
Retention After Termination
After agreement termination, the institution may retain unclaimed funds for up to six years, provided it has taken reasonable steps to trace and return them