IMEB 3.3.1 Client money — creation of trust and terms of holding

(1) Client money held by a firm is subject to a trust.
(2) The firm is the trustee of the trust and holds the client money on the following terms:
(a) that the money is held for the purposes, and on the terms, of the client money protection rules and client money distribution rules;
(b) that, subject to paragraph (d), the money is held for clients (other than clients who are insurers and who are acting as such), according to their respective interests in it;
(c) that, after all valid claims under paragraph (b) have been met, the money is held for insurers (that is, clients who are insurers acting as such), according to their respective interests in it;
(d) that, on the failure of the firm, the money will also be held for the payment of costs attributable to the distribution of the client money in accordance with paragraphs (b) and (c);
(e) that, after all valid claims and costs under paragraphs (b) to (d) have been met, the money is held for the firm itself.

Note Client money is defined in rule 1.2.9. Client, client money protection rules and client money distribution rules are defined in the glossary.
Derived from QFCRA RM/2011-3 (as from 1st July 2011)