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Money received on account of customer

Securities and Futures (Licensing and Conduct of Business) Regulations

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—(1) The holder of a capital markets services licence —(a)shall treat and deal with all moneys received on account of its customer as belonging to that customer;(b)must, where the holder is a member of an approved clearing house or a recognised clearing house —(i)deposit all moneys received on account of a retail customer in respect of any OTC derivatives contract entered into by the holder on behalf of, or with, the retail customer in a trust account;(ii)deposit all moneys received on account of a retail customer in respect of any capital markets products other than an OTC derivatives contract entered into by the holder on behalf of, or with, the retail customer in —(A)a trust account that is maintained in accordance with regulation 17; or (B)any other account —(AA)into which the retail customer directs that the moneys be deposited;(BB)to which the retail customer has legal and beneficial title; and(CC)which is maintained with a specified financial institution; and(iii)deposit all moneys received on account of a customer who is not a retail customer in —(A)a trust account that is maintained in accordance with regulation 17; or(B)any other account into which that customer directs that the moneys be deposited;(ba)must, where the holder is not a member of an approved clearing house or a recognised clearing house —(i)deposit all moneys received on account of a retail customer in —(A)a trust account that is maintained in accordance with regulation 17; or(B)any other account —(AA)into which the retail customer directs that the moneys be deposited;(BB)to which the retail customer has legal and beneficial title; and(CC)which is maintained with a specified financial institution; and(ii)deposit all moneys received on account of a customer who is not a retail customer in —(A)a trust account that is maintained in accordance with regulation 17; or(B)any other account into which that customer directs that the moneys be deposited; and(c)shall not commingle moneys received on account of its customer with other funds, or use the moneys as margin or guarantee for, or to secure any transaction of, or to extend the credit of, any person other than the customer.(2) The holder must, no later than the business day immediately following the day on which the holder receives money received on account of its customer or is notified of the receipt of such money (whichever is later) —(a)deposit the money in a trust account or other account in accordance with paragraph (1)(b) or (ba), as the case may be;(b)pay the money to the customer;(c)deposit the money in accordance with regulation 19; or(d)invest the money in accordance with regulation 20.(3) Moneys received by a holder who is a member of an approved clearing house or a recognised clearing house on account of the holder’s customers must not be commingled or deposited in the same trust account, except that —(a)moneys received by the holder on account of retail customers in respect of OTC derivatives contracts entered into by the holder on behalf of, or with, retail customers may be commingled or deposited in the same trust account; and(b)moneys received by the holder on account of retail customers in respect of any capital markets products other than an OTC derivatives contracts entered into by the holder on behalf of, or with, retail customers, and all moneys received by the holder on account of customers other than retail customers, may be commingled or deposited in the same trust account.(4) Moneys received by a holder who is not a member of an approved clearing house or a recognised clearing house on account of the holder’s customers may be commingled or deposited in the same trust account.(5) Where a holder who is a member of an approved clearing house or a recognised clearing house accepts from a customer any moneys deposited or paid for or in relation to an OTC derivatives contract, the holder must —(a)inform the customer that the customer may request the holder to separate the books for any money deposited or paid for or in relation to the contracts of the customer from the books for moneys 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;(b)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 —(i)the consequences of the holder becoming insolvent if the customer makes the request mentioned in sub-paragraph (a);(ii)the consequences of the holder becoming insolvent if the customer does not make the request mentioned in sub-paragraph (a); and(iii)the differences between the consequences mentioned in sub-paragraphs (i) and (ii).(6) In this regulation —“business day” means the business day of the holder or, if the custodian with whom the trust account is maintained is closed for business on that day and the holder is unable to deposit the money in the trust account, the next business day of the custodian;“specified financial institution” means any of the following:(a)a bank that holds a licence under section 7 or 79 of the Banking Act 1970;(b)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;(c)a finance company licensed under the Finance Companies Act 1967;(d)a corporation incorporated, formed or established outside Singapore, which is licensed, registered, approved or otherwise regulated as a bank under the law of the foreign country or territory in which it is incorporated, formed or established.

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