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  • CL-6 CL-6 Appendix

    • CL-6.1 CL-6.1 Appendix

      • CL-6.1.1

        The minimum information that should be assessed by an investment firm licensee to determine the suitability of an eligible third party should include but not be limited to the following information:

        (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.
        Amended: January 2007

      • CL-6.1.2

        The minimum information that should be notified by the investment firm licensee to its client in respect of its holdings of that client's assets includes but is not limited to the following:

        (a) The basis and terms governing the way in which the client assets will be held;
        (b) That the client is subject to the protection conferred by the client asset protection rules and as a consequence:
        i. The client assets will be held separately from assets belonging to the investment firm licensee; and
        ii. In the event of an investment firm licensees' insolvency, winding-up or other similar event, the client's assets will be subject to the client asset distribution rules.
        (c) Whether interest is payable to the client and, if so, the terms and frequency of such payments;
        (d) That, notwithstanding that the client assets will benefit from the protections conferred by the client asset protection rules, the client will still be taking unsecured credit risk on any bank or third party with whom the investment firm licensee places the client assets that it holds;
        (e) If applicable, that the client assets may be held in a jurisdiction outside the remit of the CBB and that the market practices, insolvency and legal regimes applicable in that jurisdiction may differ from the regime applicable in the CBB;
        (f) If applicable, that the investment firm licensee holds or intends to hold the client money in a client bank account with a designated bank or in a third party account with an eligible third party which is in the same group as the investment firm licensee and the identity of the designated bank or eligible third party concerned;
        (g) If applicable, details about how any client money arising out of Islamic financial business is to be held; and
        (h) Details of any claims or set offs which the investment firm licensee may have in client assets held on behalf of the client in satisfaction of a default by the client or otherwise, and any rights which the investment firm licensee may have to closeout or liquidate contracts or positions in respect of any of the client assets, without the client's prior instruction or consent.
        Amended: January 2007