INMA 5.7.1 Payments to be in accordance with Part 5.7

(1) An investment business firm must have procedures to ensure that every payment out of a client bank account is authorised and made in accordance with this Part.
(2) An investment business firm may pay money out of a client bank account if (and only if):
(a) the money is not client money;
(b) the money has been paid into the account in error;
(c) the money is to be paid into another client money account of the firm;
(d) the money is to be paid immediately to a customer or the duly authorised representative of a customer;
(e) the money is to be paid into:
(i) the customer's own account (not an account that is also in the name of the firm); or
(ii) a client bank account of an eligible third party as part of a transfer or series of transfers to eligible third parties;
(f) the money is to be paid on the instructions, or with the consent, of a customer;

Example

Payment to meet an obligation of the customer for professional fees
(g) the money is to be paid to the firm for the firm's own account, under rule 5.3.1 (Money that is not client money — money payable to firm); or

Guidance for paragraph (g)

An investment business firm may deduct money to pay an investment business firm's commission or fees in relation to a customer from client money received from the customer after the payment has cleared and the client money calculation has been completed. For the calculation see rule 5.9.1.

Note Under rule 5.3.1, money that is (or becomes) payable immediately by the customer to the firm for the firm's own account is not client money.
(h) the money is surplus that is to be paid to the firm under rule 5.9.2(b).
(3) Money paid out of a client bank account by cheque must remain in the account (and must continue to be treated as client money) until the cheque is presented to the customer's bank and cleared by the paying agent.
(4) An investment business firm must not overdraw its client bank account.
(5) An investment business firm must ensure that no payment is made from its client bank account for a customer before sufficient funds have been paid into the account for the customer and have been cleared.
Derived from QFCRA RM/2014-4 (as from 1st January 2015).