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  • Transfer of Money to Eligible Third Parties

    • C4-3.3.11

      Category 4 investment firms may only pay, or permit to be paid, client money into an account other than the client bank account if that account is an eligible third party.

      Added: January 2022

    • C4-3.3.12

      Eligible third parties are recognised exchanges, clearing houses and third-party intermediaries (such as brokers), that are duly authorised or licensed by the appropriate regulatory oversight body.

      Added: January 2022

    • C4-3.3.13

      For the purposes of C4-3.3.11, the category 4 investment firm must assess the suitability of an eligible third party before allowing it to hold or control client money. This assessment must include, at a minimum, the information included below:

      (a) The eligible third party’s credit rating, capital and financial resources;
      (b) The regulatory and insolvency regimes of the jurisdiction in which the eligible third party is located;
      (c) The eligible third party’s reputation;
      (d) Its regulatory status and history; and
      (e) The other members of the eligible third party’s group and their activities.
      Added: January 2022

    • C4-3.3.14

      Category 4 investment firms may allow an eligible third party, such as an exchange, a clearing house or an intermediate broker, to hold or control client money, only if the licensee transfers the client money:

      (a) For the purpose of a transaction for a client through or with that eligible third party; or
      (b) To meet a client’s obligations to provide collateral for a transaction.
      Added: January 2022

    • C4-3.3.15

      Category 4 investment firms must not hold money other than client money in a client bank account unless it is:

      (a) A minimum sum required to open the account or to keep it open;
      (b) Money temporarily held in the account in accordance with the mixed remittance requirements in Paragraph C4-3.3.17; or
      (c) Interest credited to the account which exceeds the amount due to clients as interest and which has not yet been withdrawn by the licensee.
      Added: January 2022

    • C4-3.3.16

      Category 4 investment firm may pay into a client bank account money of its own to protect client money if it is prudent to do so, and that money will then become client money for the purposes of the client asset protection rules in this Module until the licensee retrieves it.

      Added: January 2022

    • C4-3.3.17

      If a category 4 investment firm receives a mixed remittance (that is part client money and part other money), it must:

      (a) Pay the full sum into a client bank account; and
      (b) Pay the money that is not client money out of the client bank account within one business day.
      Added: January 2022

    • C4-3.3.18

      Category 4 investment firms should not hold excess client money in its client transaction accounts with intermediate brokers, settlement agencies or over the counter (OTC) counterparties; it should be held in a client bank account.

      Added: January 2022