Entire Section

  • COB A5.11 COB A5.11 Reconciliation

    • COB A5.11.1 COB A5.11.1

      (1) An Authorised Firm must maintain a system to ensure that accurate reconciliations of the Client Accounts are carried out at least every 25 days.
      (2) The reconciliation must include:
      (a) a full list of individual Segregated Client credit ledger balances, as recorded by the Authorised Firm;
      (b) a full list of individual Segregated Client debit ledger balances, as recorded by the Authorised Firm;
      (c) a full list of unpresented cheques and outstanding lodgements;
      (d) a full list of Client Account cash book balances; and
      (e) formal statements from Third Party Agents showing account balances as at the date of reconciliation.
      (3) An Authorised Firm must:
      (a) reconcile the individual credit ledger balances, Client Account cash book balances, and the Third Party Agent Client Account balances;
      (b) check that the balance in the Client Accounts as at the close of business on the previous day was at least equal to the aggregate balance of individual credit ledger balances as at the close of business on the previous day; and
      (c) ensure that all shortfalls, excess balances and unresolved differences, other than differences arising solely as a result of timing differences between the accounting systems of the Third Party Agent and the Authorised Firm, are investigated and, where applicable, corrective action taken as soon as possible.
      (4) An Authorised Firm must perform the reconciliations in (3) within 10 days of the date to which the reconciliation relates.
      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

      • COB A5.11.1 Guidance

        When performing the reconciliations, an Authorised Firm should:

        a. include in the credit ledger balances:
        i. unallocated Client Money;
        ii. dividends received and interest earned and allocated;
        iii. sale proceeds which have been received by the Authorised Firm and the Client has delivered the Investments or the Authorised Firm holds or controls the Investment; and
        iv. Money paid by the Client in respect of a purchase where the Authorised Firm has not remitted the Money to the counterparty or delivered the Investment to the Client; and
        b. deduct from the credit ledger balances:
        i. Money owed by the client in respect of unpaid purchases by or for the Client if delivery of those Investments has been made to the Client; and
        ii. Money remitted to the Client in respect of sales transactions by or for the Client if the Client has not delivered the Investments.
        Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

    • COB A5.11.2 COB A5.11.2

      An Authorised Firm must ensure that the process of reconciliation does not give rise to a conflict of interest.

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

      • COB A5.11.2 Guidance

        When performing reconciliations, an Authorised Firm should maintain a clear separation of duties to ensure that an employee with responsibility for operating Client Accounts, or an employee that has the authority to make payments, does not perform the reconciliations under COB Rule A5.11.1

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

    • COB A5.11.3

      (1) Reconciliation performed in accordance with COB Rule A5.11.1 must be reviewed by a member of the Authorised Firm who has adequate seniority.
      (2) The individual referred to in (1) must provide a written statement confirming the reconciliation has been undertaken in accordance with the requirements of this section.
      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

    • COB A5.11.4 COB A5.11.4

      The Authorised Firm must notify the DFSA where there has been a material discrepancy with the reconciliation which has not been rectified.

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

      • COB A5.11.4 Guidance

        A material discrepancy includes discrepancies which have the cumulative effect of being material, such as longstanding discrepancies.

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