Entire Section

  • COB A5.13 COB A5.13 Client Money Distribution Rules

    • COB A5.13.1

      This section is referred to as the Client Money Distribution Rules and to the extent that these Rules are inconsistent with part 5.52 of the DIFC Insolvency Regulations, and the DIFC Preferential Creditor Regulations, these Rules will prevail.

      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]
      [Amended] DFSA RM144/2014 (Made 24th August 2014). [VER23/08-14]

    • COB A5.13.2 COB A5.13.2

      Following a Distribution Event, the Authorised Firm must distribute Money in the following order of priorities:

      (a) firstly, in relation to Client Money held in a Client Account on behalf of Segregated Clients, claims relating to that Money must be paid to each Segregated Client in full or, where insufficient funds are held in a Client Account, proportionately, in accordance with each Segregated Client's valid claim over that Money;
      (b) secondly, where the amount of Client Money in a Client Account is insufficient to satisfy the claims of Segregated Clients in respect of that Money, or not being immediately available to satisfy such claims, all other Money held by the Authorised Firm must be used to satisfy any outstanding amounts remaining payable to Segregated Clients but not satisfied from the application of (a) above;
      (c) thirdly, upon resolution of claims in relation to Segregated Clients, any Money remaining with the Authorised Firm must be paid to each Client in full or, where insufficient funds are held by the Authorised Firm, proportionately, in accordance with each Client's valid claim over that Money; and
      (d) fourthly, upon satisfaction of all claims in (a), (b) and (c) above, in the event of:
      (i) the appointment of a liquidator, receiver or administrator, or trustee in bankruptcy over the Authorised Firm, payment must be made accordance with the Insolvency Law 2019; or
      (ii) all other Distribution Events, payment must be made in accordance with the direction of the DFSA.
      Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]
      [Amended] DSFA RM185/2016 (Made 7th December 2016). [VER28/02-17]
      [Amended] DFSA RMI289/2020 (Made 16th December 2020). [VER37/02-21]

      • COB A5.13.2 Guidance

        A Segregated Client would not have a valid claim over Client Money held in a Client Account if that Client Account was not established to hold Client Money for that Client.

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

    • COB A5.13.3

      Following a Distribution Event, an Authorised Firm must sell all Collateral and use the proceeds of the sale to satisfy claims made in accordance with COB Rule A5.13.2

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