INMA 5.5.4 Requirements before firm can pay client money into client bank accounts

(1) An investment business firm must not pay client money, or permit client money to be paid, into its client bank account unless:
(a) under the law applying to the money and the bank account, the money will be taken to be segregated from, and will not form part of, the firm's assets in its insolvency;
(b) after making an appropriate assessment, the firm is satisfied, on reasonable grounds, that the bank is suitable to hold the money in the account; and
(c) the bank has given the confirmation required by subrule (3).
(2) In assessing whether an eligible bank is suitable to hold the money in the account, the firm must take into account all the relevant circumstances, including:
(a) the bank's credit rating, capital and financial resources;
(b) the regulatory and insolvency regimes of the jurisdiction in which the bank is located;
(c) the bank's reputation; and
(d) the bank's regulatory status and history.
Note Eligible bank is defined in rule 5.2.3; jurisdiction is defined in the glossary.
(3) The bank must give the firm the confirmation in writing. The confirmation must state:
(a) that all money standing to the credit of the account is held by the firm as trustee;
(b) that the bank is not entitled:
(i) to combine the account with any other account; or
(ii) to exercise any right of set-off or counterclaim or any security interest against money in the account for any debt or other obligation owed to it on any other account of the firm; and
(c) that the name of the account includes the words 'client bank account' and sufficiently distinguishes it from an account that holds money belonging to the firm.
Derived from QFCRA RM/2014-4 (as from 1st January 2015).