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  • Transfer of Money to Eligible Third Parties

    • CL-1.1.10

      An investment firm licensee 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.

      Amended: January 2016

    • CL-1.1.11

      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 to conduct investment activities.

    • CL-1.1.12

      An investment firm licensee may allow an eligible third party, such as an exchange, a clearing house or an intermediate broker, to hold or control client money:

      (a) The investment firm licensee transfers the client money
      (i) For the purpose of a transaction for a client through or with that eligible third party; or
      (ii) To meet a client's obligations to provide collateral for a transaction;
      (b) In the case of a retail client, that client has been notified in writing that the client money may be transferred to the other person.
      Amended: January 2007

    • CL-1.1.13

      For the purposes of CL-1.1.10, an investment firm licensee 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 in Paragraph CL-6.1.1.

    • CL-1.1.14

      An investment firm licensee 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 rule stated in CL-1.1.16; 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    (c) Interest credited to the account which exceeds the amount due to clients as interest and which has not yet been withdrawn by the investment firm licensee.
      Amended: January 2007

    • CL-1.1.15

      If it is prudent to do so to ensure that client money is protected, an investment firm licensee may pay into a client bank account money of its own, and that money will then become client money for the purposes of the client asset protection rules until the licensee retrieves it.

    • CL-1.1.16

      If an investment firm licensee 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.
      Amended: January 2007

    • CL-1.1.17

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