IMEB 4.2.1 Firm-related distribution events — order of distribution

(1) After the occurrence of a firm-related distribution event in relation to a firm (whether the firm is incorporated in the QFC or otherwise), the firm must distribute client money as follows:
(a) all client money held in any client bank account must be pooled and distributed—
(i) first to pay for costs attributable to the distribution of the client money in accordance with subparagraphs (ii) and (iii); and
(ii) secondly for clients (other than clients who are insurers and who are acting as such) for whom the money is held on a proportionate basis in accordance with the amount of their respective valid claims against the firm for money owed to them by the firm that is client money; and
(iii) thirdly for insurers mentioned in subparagraph (ii) according to their respective interests;

Note INMA, rule 5.10.4 applies if a firm that is incorporated in the QFC does not have sufficient amounts of client money in the client bank accounts to satisfy the claims under this paragraph.
(b) after satisfaction of all claims in paragraph (a)—
(i) if a liquidator, receiver, administrator, or trustee in bankruptcy has been appointed over the firm, the excess must be distributed in accordance with applicable insolvency or bankruptcy laws; and
(ii) in all other cases, the excess must be distributed in accordance with the direction of the Regulatory Authority.
(2) However, any distribution of client money under subrule (1) is subject to the deduction of any fees payable to an insolvency practitioner or other similar official that has responsibility for distributing such client money.
Amended by QFCRA RM/2014-3 (as from 1st January 2015)