C4-3.3.4
(a) Undertake an appropriate risk assessment of that custodian and document the same;
(b) That the client will assume the unsecured credit risk of the custodian or third party with whom the licensee places the client assets that it holds;
(c) If applicable, that client assets may be held in a jurisdiction outside the Kingdom of Bahrain;
(d) Agree with the client the details of any claims or set offs which the 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 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; and
(e) Obtain clients’ consent in writing for the arrangements for custody in a document which gives clear information on:
i. The terms governing the way in which the client assets will be held and the obligations and responsibilities of the licensee and/or of the third-party custodian (where applicable), the clients (including the terms for the restitution of the financial instruments );
ii. The risks involved; and
iii. Whether interest on client money held is payable to the client and, if so, the terms and frequency of such payments.
Added: January 2022