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 Firmmay only pass, or permit to be passed, a Segregated Client's Moneyto a Third Party Agentif:(a) the Client Moneyis to be used in respect of a Transactionor series or Transactionsfor that Client;(b) the Client Moneyis to be used to meet an obligation of that Client; or(c) the Third Party Agentis a Bankor a Regulated Financial Institutionwhich is authorised to accept or take Deposits.(2) In respect of (1)(a) and (b), an Authorised Firmmust not hold any excess Client Moneywith the Third Party Agentlonger than necessary to effect a Transactionor satisfy the Client'sobligation.
COB A5.7.2 COB A5.7.2
Authorised Firmopens a Client Accountwith a Third Party Agentit must obtain, within a reasonable period, a written acknowledgement from the Third Party Agentstating that:(a) all Moneystanding to the credit of the account is held by the Authorised Firmas agent and that the Third Party Agentis not entitled to combine the account with any other account or to exercise any charge, mortgage, lien, right of set-off or counterclaim against Moneyin 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 Moneythat belongs to the Authorised Firm, and is in the form requested by the Authorised Firm.
COB A5.7.2 Guidance
The DFSA would consider twenty days as being a reasonable period for an
Authorised Firmto receive a written acknowledgement from the Third Party Agent.
Third Party Agentdoes not provide the acknowledgement referred to in COB Rule A5.7.2 within a reasonable period, the Authorised Firmmust refrain from making further deposits of Client Moneywith that Third Party Agentand withdraw any Client Moneystanding to the credit of that Client Account.