Safeguarding Shari'a Compliant Financial Instruments (i.e. Custodian)
LR-1.3.26
Safeguarding Shari'a compliant
financial instruments means the safeguarding of Shari'a compliantfinancial instruments for the account of clients.LR-1.3.27
A person does not carry on an activity specified in Rule LR-1.3.26 if the person receives documents relating to a
financial instrument for the purpose of onward transmission to, from or at the direction of the person to whom thefinancial instrument belongs; or else is simply providing a physical safekeeping service such as a deed box.LR-1.3.28
A person does not carry on an activity specified in Rule LR-1.3.26 if a third person, namely a qualifying custodian, accepts responsibility with regard to the
financial instrument .LR-1.3.29
A "qualifying custodian" means a person who is:
(a) a licensee who has permission to carry on an activity of the kind specified in Rule LR-1.3.26; or(b) an exempt person in relation to activities of that kind.LR-1.3.30
A person does not carry on an activity specified in Rule LR-1.3.26 if they are managing a central depository, which is part of an exchange recognised by BMA.
LR-1.3.31
The following are examples of activities, when taken in isolation, are unlikely to be regarded an activity of the kind specified under Rule LR-1.3.26:
(a) providing information as to the number of units or the value of any assets safeguarded; and(b) converting currency.LR-1.3.32
A person undertaking an activity of the kind specified under Rule LR-1.3.26 may also be engaged in the administration of the
financial instruments , including related services such as cash/ collateral management.
