Document ID: chunk:federal_register_of_legislation:F2023C00928:reg:8:p18
Version: federal_register_of_legislation:F2023C00928
Segment Type: reg
Provision Reference: reg 8 (pt 18/34)
Character Range: 58421–61532

protect the rights or equitable interest of the licensee or the client that the assets are 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 client portfolio assets 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 client portfolio assets to which the agreement relates and the transactions in relation to those assets 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 assets less frequently, in accordance with that practice, by checking information the custodian is given as to the existence and quantity of client portfolio assets 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; and
                     (ix) to the effect that the custodian will provide the licensee with written notice and contact information of any other person holding client portfolio assets or to be appointed by the custodian:
                         (A) as soon as reasonably practicable; and
                         (B) in any event before the assets are held, except in exceptional circumstances identified in the agreement; and
                     (x) to the effect that the licensee may terminate the agreement without:
                         (A) payment other than in relation to entitlements previously accrued or the reasonable expenses involved in transfer of the assets to the licensee or another custodian; and
                         (B) limiting any right to damages the licensee may have under the agreement, including recovering expenses referred to in sub‑subparagraph (A) if the custodian is in breach;

                     if the licensee has reasonable grounds for believing that:

                         (C) there is or has been an act or omission of the custodian or a sub-custodian that results in the custodian being in breach of the agreement; and
                         (D) as a result of the act or omission, to a material extent the custodian or a sub-custodian is not complying with or is unlikely to comply with the requirements that the licensee must do all things necessary to ensure under subsections (5) to (13), paragraph (15)(b) and subsection (17) are met by the custodian or the sub-custodian in relation