912AFBAssets holding

912AFB Assets holding

(1) The external MDA custodian must do all things necessary to ensure that:

(a) client portfolio assets it holds, other than when held under Division 2 or 4 of Part 7.8, are held on trust for the client or the client and other clients of MDA services provided by the MDA provider; and

(b) where a client of the MDA service has an entitlement as a client to payment out of a deposit taking facility, the facility is an account that complies with section 981B; and

(c) client portfolio assets held by a person the external MDA custodian directly or indirectly engages are held in a way so that the client of the MDA service or the client and other clients of the MDA service have a beneficial interest in the client portfolio assets (whether directly or indirectly).

Note: Paragraph (c) could be satisfied by a person holding the client portfolio assets on trust for the external MDA custodian who in turn holds the beneficial interest in those assets on trust for the MDA provider who in turn holds the beneficial interest which it has on trust for the client or the clients of the MDA service as a whole.

(2) Paragraphs (1)(a) and (c) do not apply where either of the following apply:

(a) where both of the following apply:

(i) the client portfolio assets are located in a place outside of this jurisdiction where trusts are not known to the law; and

(ii) it is reasonable for the property to be held in accordance with the law in that place;

(b) where both of the following apply:

(i) the client portfolio assets are located in a place outside of this jurisdiction and it is not reasonable for the assets to be held on trust in accordance with the law in that place;

(ii) the external MDA custodian has documented in writing that it is satisfied that the property is held in a manner that, having regard to the relevant laws, provides reasonably effective protection in case of insolvency of the foreign asset holder and the basis on which the external MDA custodian is satisfied.