Document ID: chunk:federal_register_of_legislation:F2024L00375:body:0:p3
Version: federal_register_of_legislation:F2024L00375
Segment Type: other
Provision Reference: 
Character Range: 5233–8040

services licensee must do all things necessary to ensure that if custodial property is not held separately from property in which the financial services licensee or the person holding the custodial property has an interest and separately from the property of any other person other than the client:
(a) the financial services licensee has put in place and keeps for 7 years after it was last relied on, a written policy in relation to not holding custodial property separately which sets out its reasons why that policy is appropriate having regard to any extent to which it might expose its clients to the risks arising from the custodial property not being held separately and its duties to each client; and
(b) the financial services licensee reviews the policy at least every 13 months, prepares a written record of the outcome of the review and keeps that record for 7 years; and
(c) adequate records are kept at all times showing each client's entitlement to property that includes the custodial property not held separately; and
(d) reconciliation procedures are performed on each business day in relation to the custodial property not held separately or if because of the nature of the property, it is ordinary and reasonable commercial practice in the place where the property is located to reconcile property of that kind less frequently, as frequently as would be performed in accordance with that practice; and
(e) not holding the custodial property separately does not restrict the ability of the financial services licensee to meet any obligation it has to act on directions of the client to exercise powers the holder has in relation to the property, including in relation to voting rights; and
(f) if the property that includes the custodial property is not sufficient to meet the entitlements of all persons in relation to that property, the insufficiency ceases by the second business day after the insufficiency arises, whether through the provision of additional property by the financial services licensee or otherwise.
(7) If the financial services licensee holds custodial property, it must:
(a) have an organisational structure that supports compliance with subsection (5)(b); and
(b) segregate custodial staff from persons performing other functions, in a way that minimises the potential for conflict, if a conflict of interest exists or might arise between:
(i) their duties as custodial staff; and
(ii) the interests served or advanced by persons who perform duties to make investment decisions, trading decisions or other discretionary decisions resulting in the transfer or disposal of custodial property other than discretionary decisions in relation to holding a deposit account with a corporation that is regulated for the taking of deposits where the balance of the deposit