• INMA Part 5.3 INMA Part 5.3 Money that is not client money

    • INMA 5.3.1 Money that is not client money — money payable to firm

      (1) Money is not client money of an INMA firm in relation to a customer if it is (or becomes) payable immediately by the customer to the firm for the firm’s own account.
      (2) Without limiting subrule (1), money is payable to the firm for the firm’s own account if it is paid by the customer to the firm, or deducted by the firm from money held by it for the customer, in settlement of:
      (a) a fee or charge that is payable by the customer to the firm;
      (b) an amount payable by the customer to the firm in relation to an amount paid by the firm:
      (i) for the purchase of an investment by or for the customer; or
      (ii) in settlement of a margin payment made for the customer; or
      (c) an amount payable by the customer to the firm for an unpaid purchase of an investment by or for the customer, if the investment has been delivered to the customer or credited to the customer’s account.
      Derived from QFCRA RM/2014-4 (as from 1st January 2015).

    • INMA 5.3.2 Money that is not client money — cheques sent to regulated financial institutions

      (1) Client money of an INMA firm does not include a cheque received from a customer that is payable to a regulated financial institution, if:
      (a) the cheque is not collected or paid in the QFC; but
      (b) the firm sends it to the financial institution, in accordance with the customer's instructions, as soon as practicable (but no later than 2 business days after the day when the firm receives it).
      (2) An investment business firm must make and retain:
      (a) a record of every cheque to which subrule (1) applies; and
      (b) a copy of each such cheque.
      (3) The record of such a cheque must include the following details:
      (a) the customer's name;
      (b) the name of the financial institution;
      (c) the date on which the firm received the cheque;
      (d) the date on which the firm sent it to the financial institution.
      (4) In this rule:

      regulated financial institution means an entity that is not an authorised firm but is authorised or licensed in a jurisdiction other than the QFC to carry on a financial service.
      Derived from QFCRA RM/2014-4 (as from 1st January 2015).

    • INMA 5.3.3 Money that is not client money — money to which client money protection rules do not apply

      Money held by an INMA firm is not client money of the firm if, under Part 5.6 (Disapplication of client money protection rules), the client money protection rules do not apply to the money.

      Derived from QFCRA RM/2014-4 (as from 1st January 2015).

    • INMA 5.3.4 Money that is not client money — money held by QFC bank

      (1) Money held in an account with a QFC bank is not client money of the firm if the firm has notified the customer concerned, in writing, that:
      (a) money belonging to the customer will be held by the QFC bank as a bank and not as trustee; and
      (b) such money will not be subject to the client money protection rules.
      Note QFC bank is defined in the glossary.
      (2) The notification may be in the firm's terms of business.

      Note Under CIPR, Parts 4.4, 5.2 and 5.3, an INMA firm must give a customer a statement, in writing, of the terms and conditions on which the firm will conduct investment and advisory business for the customer.
      Amended by QFCRA RM/2019-4 (as from 1st January 2020).

    • INMA 5.3.5 Money that is not client money — money held in guaranteed account

      (1) Money held in an account with an INMA firm itself is not client money of the firm if:
      (a) all of the firm’s obligations to repay the money to the customer concerned (or to the customer’s order) have been fully, unconditionally and irrevocably guaranteed by an eligible bank; and
      (b) the firm has complied with subrule (2).
      (2) For subrule (1) (b), the firm:
      (a) must notify the customer in writing that:
      (i) the firm’s obligations to repay money belonging to the customer have been fully, unconditionally and irrevocably guaranteed by an eligible bank; and
      (ii) such money is not subject to the client money protection rules; and
      (b) must give the customer a copy of the guarantee from the bank.
      (3) The notification required by paragraph (2) (a) may be in the firm’s terms of business.
      Derived from QFCRA RM/2014-4 (as from 1st January 2015).

    • INMA 5.3.6 Money that is not client money — money from associate

      (1) Money received from an associate of an INMA firm is not client money of the firm.

      Note Associate means another firm in the same corporate group — see the glossary.
      (2) However, money received from an associate of an INMA firm is client money if the associate notifies the firm in writing that the money is to be held by the firm on behalf of a person who is not in the same corporate group as the firm.
      Derived from QFCRA RM/2014-4 (as from 1st January 2015).

    • INMA 5.3.7 Money that is not client money — money for issue or redemption of units in QFC schemes

      (1) Money received by an INMA firm or banking business firm (within the meaning given by BANK) that is the operator of a QFC scheme in a delivery-versus-payment transaction in relation to units in the scheme is not client money of the firm if:
      (a) subject to subrule (2), the firm receives it from a customer in relation to the firm's obligation to issue the units; or
      (b) the money is held in the course of redeeming the units and the proceeds of that redemption are paid to a customer within the time allowed by COLL to do so.
      (2) If the price of the units has not been determined by the close of business on the next business day after the day on which the firm received the money from the customer (or, if the customer paid the money to an approved representative of the firm, the day on which the firm received the money from the representative), subrule (1) does not apply (and the firm must treat the money as client money).
      (3) If the firm draws a cheque to pay the customer under subrule (1) (b) and the cheque is drawn within the time allowed by COLL for paying the customer, rule 5.7.1(3) (Payments to be in accordance with Part 5.7) does not apply.
      Derived from QFCRA RM/2014-4 (as from 1st January 2015).