BANK 4.5.9 Holding eligible financial collateral

(1) Eligible financial collateral must be held by:
(a) the banking business firm;
(b) a branch (in or outside the QFC) of the firm;
(c) an entity that is a member of the financial group of which the firm is a member;
(d) an independent custodian; or
(e) a central counterparty.
(2) The holder of cash collateral in the form of a certificate of deposit or bank bill issued by a banking business firm must keep possession of the instrument while the collateralised exposure exists.
(3) If the collateral is held by an independent custodian or central counterparty, the firm must take reasonable steps to ensure that the holder segregates the collateral from the holder’s own assets.
(4) If collateral is held by a branch of a banking business firm and the branch is outside the QFC, the agreement between the firm and the party lodging the collateral must require the branch to act in accordance with the agreement.
Derived from QFCRA RM/2014-2 (as from 1st January 2015).