Entire Section

  • COB A5.7 COB A5.7 Payment of Client Money to a Third Party Agent

    • COB A5.7.1

      (1) Subject to COB Rule A5.7.3, an Authorised Firm may only pass, or permit to be passed, a Segregated Client's Money to a Third Party Agent if:
      (a) the Client Money is to be used in respect of a Transaction or series or Transactions for that Client;
      (b) the Client Money is to be used to meet an obligation of that Client; or
      (c) the Third Party Agent is a Bank or a Regulated Financial Institution which is authorised to accept or take Deposits.
      (2) In respect of (1)(a) and (b), an Authorised Firm must not hold any excess Client Money with the Third Party Agent longer than necessary to effect a Transaction or satisfy the Client's obligation.
      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]
      [Amended] DFSA RM66/2009 (Made 1st August 2009). [VER16/08-09]

    • COB A5.7.2 COB A5.7.2

      When an Authorised Firm opens a Client Account with a Third Party Agent it must obtain, within a reasonable period, a written acknowledgement from the Third Party Agent stating that:

      (a) all Money standing to the credit of the account is held by the Authorised Firm as agent and that the Third Party Agent is not entitled to combine the account with any other account or to exercise any charge, mortgage, lien, right of set-off or counterclaim against Money in that account in respect of any sum owed to it on any other account of the Authorised Firm; and
      (b) the title of the account sufficiently distinguishes that account from any account containing Money that belongs to the Authorised Firm, and is in the form requested by the Authorised Firm.
      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

      • COB A5.7.2 Guidance

        The DFSA would consider twenty days as being a reasonable period for an Authorised Firm to receive a written acknowledgement from the Third Party Agent.

        Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

    • COB A5.7.3

      If the Third Party Agent does not provide the acknowledgement referred to in COB Rule A5.7.2 within a reasonable period, the Authorised Firm must refrain from making further deposits of Client Money with that Third Party Agent and withdraw any Client Money standing to the credit of that Client Account.

      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]