Singapore legislation
Regulation 26
of Securities and Futures (Licensing and Conduct of Business) Regulations
Regulation 26
Duties of holder on receipt of customer’s assets
Subregulation 1
The holder of a capital markets services licence shall —
deposit a customer’s assets —
in the case of a retail customer —
in a custody account held on trust for the customer that is maintained in accordance with regulation 27; or
in any other account —
(AA)into which the customer directs that the assets are to be deposited;
(BB)to which the customer has legal and beneficial title; and
which is maintained with a specified custodian; and
in the case of any other customer —
in a custody account held on trust for the customer; or
in any other account into which the customer directs that the assets be deposited;
ensure that the customer’s assets are not commingled with any other assets; and
make arrangements for a custodian to maintain the custody account.
Subregulation 2
The holder must, no later than the business day immediately following the day on which the holder receives customer’s assets or is notified of the receipt of such assets, whichever is later —
deposit the assets in a custody account or other account in accordance with paragraph (1)(a);
return the assets to the customer; or
deposit the assets in accordance with regulation 30.
Subregulation 3
In paragraph (2), “business day” means the business day of the holder or, if the custodian with whom the custody account is maintained is closed for business on that day and the holder is unable to deposit the assets in the account, the next business day of the custodian.
Subregulation 4
A customer’s assets may be commingled with the assets of another customer and deposited in the same custody account.
Subregulation 5
Where a holder who is a member of an approved clearing house or a recognised clearing house receives from a customer any assets deposited or paid for in relation to an OTC derivatives contract, the holder must —
inform the customer that the customer may request the holder to separate the books for any assets deposited or paid for or in relation to the contracts of the customer from the books for assets deposited or paid for or in relation to the contracts of any other customer or customers of the holder, subject to additional costs that may be imposed by the holder on the customer;
inform the customer of the additional costs that the holder will impose on the customer if the customer makes the request mentioned in sub-paragraph (a); and (c)inform the customer of —
the consequences of the holder becoming insolvent if the customer makes the request mentioned in sub-paragraph (a);
the consequences of the holder becoming insolvent if the customer does not make the request mentioned in sub-paragraph (a); and
the differences between the consequences mentioned in sub-paragraphs (i) and (ii).
Subregulation 6
In paragraph (1), “specified custodian” means —
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;
a finance company licensed under the Finance Companies Act 1967;
a depository agent within the meaning of section 81SF of the Act for the custody of securities listed for quotation or quoted on the Singapore Exchange Securities Trading Limited or deposited with the Central Depository (Pte) Ltd;
an approved trustee for a collective investment scheme within the meaning of section 289 of the Act; (f)any person licensed under the Act to provide custodial services; or
a custodian outside Singapore which is licensed, registered or authorised to act as a custodian in the country or territory where the account is maintained.