Document ID: chunk:federal_register_of_legislation:F2024C00757:reg:1:p8
Version: federal_register_of_legislation:F2024C00757
Segment Type: reg
Provision Reference: reg 1 (pt 8/22)
Character Range: 64935–67866

case of the custodian, the terms of the agreement; and
              (B) in any case, the requirements that the licensee must do all things necessary to ensure under subsections (40C) to (40J) and paragraphs (40K)(a), (c) and (e) are met by the custodian or the sub-custodian in relation to IDPS property held by the custodian or a sub-custodian (except to the extent that the licensee is not complying with a requirement under paragraph (40D)(a) or (b) and the custodian is not aware of any non-compliance);
           other than:
              (C) as disclosed in writing to the licensee; or
              (D) that the custodian reasonably believes are trivial, and
           the custodian acknowledges that it or the sub-custodian must continue to meet those obligations; and
           (iii) to the effect that the custodian must acknowledge to the licensee on request that the IDPS property to which the agreement relates is held for the licensee or the relevant client or clients and notify any other person where the custodian is aware to do so might protect the rights or equitable interest of the licensee or the client or clients that the property is so held, unless the licensee directs in writing otherwise; and
           (iv) specifying how instructions will be given by the licensee to the custodian; and
           (v) to the effect that the custodian must not take or grant a security interest, mortgage, lien or other encumbrance over, or in relation to, the IDPS property held under the agreement unless it is accordance with the agreement and does not cover unpaid fees of the custodian; and
           (vi) specifying how the custodian will maintain records of the IDPS property to which the agreement relates and the transactions in relation to that IDPS property including by whom, when and how transactions were authorised; and
           (vii) specifying procedures for reconciliation each business day or if it is ordinary and reasonable commercial practice to reconcile certain property less frequently, in accordance with that practice, by checking information the custodian is given as to the existence and quantity of the IDPS property against the records of the custodian and for reporting by the custodian concerning the outcomes of the reconciliation in case of any unreconciled matter; and
           (viii) to the effect that the custodian must provide all reasonable access and assistance to any auditor engaged to audit the licensee's financial statements or statements and records concerning clients' holdings or transactions;
           (ix) to the effect that the custodian will provide the licensee with written notice of and contact information for any other person holding IDPS property or to be appointed by the custodian:
              (A) as soon as reasonably practicable; and
              (B) in any event before the property is held, except in exceptional circumstances identified