Document ID: chunk:federal_register_of_legislation:C2004A04777:section:5:p14
Version: federal_register_of_legislation:C2004A04777
Segment Type: section
Provision Reference: s 5 (pt 14/16)
Character Range: 83718–86581

broker is required by subsection (4A) to be designated as a clients' segregated account; and

    (b) the account is designated in a way that complies substantially, but not completely, with that requirement;

subsection (4A) is taken to be complied with in relation to the account.".

23. Paragraph 1209(5)(b):

  Omit "the client", substitute "clients only".

24. Subparagraph 1209(5)(d)(iii):

  Omit the subparagraph, substitute:

  "(iii) on deposit at interest with:

      (A) an Australian bank; or

      (B) an approved foreign bank in relation to the broker;".

25. Subsection 1209(5):

  Omit "subsection (11)", substitute "subsection (10)".

SCHEDULE 8—continued

26. After subsection 1209(5):

  Insert:

"(5A) If, under subsection (5), a broker (the 'paying broker') withdraws money from a clients' segregated account and pays it to another broker (the 'receiving broker'):

     (a) the paying broker must ensure that the receiving broker is notified, at the same time as the payment is made or as close to that time as is practicable, of the fact that the money has been withdrawn from a clients' segregated account of the paying broker and should be paid into a clients' segregated account of the receiving broker; and

     (b) on or before the next day after the receiving broker receives the payment, the receiving broker must pay the money into a clients' segregated account of the receiving broker.

"(5B) A notification under paragraph (5A)(a) may be in writing or in an electronic or other form and may convey its message by express words, or by a code or some other means understood by the brokers concerned.".

27. Subsection 1209(8):

  Omit the subsection, substitute:

"(8) A futures broker must not invest an amount pursuant to paragraph (5)(d) by depositing it with a person for that person to invest unless:

  (a) the broker:

        (i) has informed the person that the amount has been withdrawn from a clients' segregated account of the broker and is money to which clients of the broker are entitled; and

        (ii) has obtained from the person a written statement that is signed by the person, sets out the amount and acknowledges that the broker has informed the person as mentioned in subparagraph (i); or

     (b) the investment is made by the broker paying the amount into an account maintained with the person in relation to which the following conditions are satisfied:

        (i) the account is maintained for the sole purpose of having amounts invested in it pursuant to paragraph (5)(d);

        (ii) the broker has informed the person that amounts paid into the account will be amounts withdrawn from a clients' segregated account of the broker and will be moneys to which clients of the broker are entitled;

SCHEDULE 8—continued

        (iii) the broker has obtained from the person a written statement