Document ID: chunk:federal_register_of_legislation:F2024L00375:body:0:p10
Version: federal_register_of_legislation:F2024L00375
Segment Type: other
Provision Reference: 
Character Range: 23409–26328

sub-custodian is authorised to engage another person to hold the custodial property to which the agreement relates and providing that any such engagement must be either:
(i) under a written agreement meeting the requirements of subsections (2) to (4) (including this subparagraph and subparagraph (ii)) as if that other person were the sub-custodian and the sub-custodian were the financial services licensee, except to the extent that, in relation to assets held outside of this jurisdiction, the sub-custodian has provided written reasons to the financial services licensee as to why it reasonably considers that it is not practicable to engage a person that is willing to include such matters in the agreement; or
(ii) an arrangement with a related body corporate of the sub-custodian, where the sub-custodian has a written agreement with the financial services licensee that it is liable to the financial services licensee for the acts and omissions of the related body corporate as if those acts and omissions were the acts or omissions of the sub-custodian; and
(n) to the effect that the sub-custodian must establish and maintain business continuity arrangements that are reasonable for a business of the nature, scale and complexity of the sub-custodian's business; and
(o) to the effect that the sub-custodian must not disclose any confidential information relating to the custodial property, apart from any disclosure to ASIC or as required or permitted by law or by the financial services licensee in writing.
(3) The financial services licensee must ensure that the agreement with the sub-custodian has reasonable liability provisions and does not include provisions that exclude the liability of the sub-custodian for direct loss that it would have if the exclusion were not included except in particular circumstances that the financial services licensee considers to be reasonable and contains, if appropriate, reasonable indemnity provisions in relation to losses caused to the financial services licensee or to its client or clients by the sub-custodian's acts and omissions that relate to that agreement.
(4) A financial services licensee who arranges for a sub-custodian to hold custodial property must:
(a) not permit, under the agreement with the sub-custodian or otherwise, the granting of a security interest, mortgage, lien or other encumbrance in favour of the sub-custodian or its associates unless the financial services licensee reasonably believes for reasons it has recorded in writing that any conflict that may arise as a result of the security interest, mortgage, lien or encumbrance will not materially increase the risks that the sub-custodian will fail to meet its obligations; and
(b) keep the written record of reasons for 7 years after the security interest, mortgage, lien or encumbrance has ceased.
              (5) A financial services licensee that complies with this section