Singapore legislation
Regulation 17
of Securities and Futures (Licensing and Conduct of Business) Regulations
Regulation 17
Maintenance of trust account with specified financial institutions
Subregulation 1
The holder of a capital markets services licence shall maintain a trust account in which it deposits moneys received on account of its customer with —
a bank that holds a licence under section 7 or 79 of the Banking Act 1970;
a merchant bank that holds a merchant bank licence, or is treated as having been granted a merchant bank licence, under the Banking Act 1970; or
a finance company licensed under the Finance Companies Act 1967.
Subregulation 2
Without prejudice to paragraph (1) and subject to the customer’s prior written consent, the holder may, for the purpose of depositing moneys received on account of its customer (other than moneys received from, or on account of, its retail customer in respect of OTC derivatives contracts that are entered into by the holder with the retail customer) which are denominated in a foreign currency in a trust account, maintain the trust account with a custodian outside Singapore which is licensed, registered or authorised to conduct banking business in the country or territory where the account is maintained.
Subregulation 3
A holder of a capital markets services licence must, before opening a trust account for the purposes of depositing moneys received on account of its customers, assess, and satisfy itself of, the suitability of the financial institution or custodian with which the trust account is to be opened.
Subregulation 4
A holder of a capital markets services licence must periodically assess, and satisfy itself of, the suitability of any financial institution or custodian that maintains the holder’s trust accounts in which moneys received on account of the holder’s customers are deposited.
Subregulation 5
The holder must keep, for the period specified in section 102(3) of the Act, records of the grounds on which the holder satisfied itself of the financial institution’s or custodian’s suitability at each assessment under paragraph (3) or (4).
Subregulation 6
Paragraph (3) does not apply to trust accounts opened by the holder before 8 October 2018.