Document ID: chunk:federal_register_of_legislation:F2023C00928:reg:8:p11
Version: federal_register_of_legislation:F2023C00928
Segment Type: reg
Provision Reference: reg 8 (pt 11/34)
Character Range: 39432–42333

enter into the contract if it has reason to believe that the MDA service is not appropriate to the client's relevant personal circumstances.

912AEC Asset holding
              (1) The licensee must ensure that client portfolio assets of a client are not pooled with any other property to enable an investment to be made or made on more favourable terms.
              (2) The licensee must do all things necessary to ensure that:
                  (a) if it holds client portfolio assets of a client, it holds those assets on trust for the client or the client and other clients of the MDA service it provides unless the client portfolio assets are held under Division 2 or 4 of Part 7.8; and
                  (b) client portfolio assets held by a person the licensee directly or indirectly engages are held in a way so that the client or the client and other clients of the MDA service have a beneficial interest in the client portfolio assets (whether directly or indirectly) unless the assets are held under Division 2 or 4 of Part 7.8.

                  Note: Paragraph (b) could be satisfied by a person holding the client portfolio assets on trust for the licensee and the licensee holding the beneficial interest in those assets on trust for the client or the clients of the MDA services as a whole.

              (3) Subsection (2) does not apply where either of the following apply:

                  (a) where the licensee reasonably considers that both of the following apply:

                     (i) the client portfolio assets are located in a place outside of this jurisdiction where trusts are not known to the law;

                     (ii) it is reasonable for the assets to be held in accordance with the law in that place;

                  (b) where both of the following apply:

                     (i) the client portfolio assets are located in a place outside of this jurisdiction and the licensee reasonably considers that it is not reasonable for the assets to be held on trust in accordance with the law in that place;

                     (ii) the licensee has documented in writing that:

                         (A) it is satisfied that the client portfolio assets are held in a manner that, having regard to the relevant laws, provides reasonably effective protection in case of insolvency of the person holding the property; and
                         (B) the basis on which the licensee is satisfied.
              (4) The licensee must have reasonable procedures for giving instructions to the custodian or where there is no custodian, any custodial staff in relation to client portfolio assets that include how the instructions are given and reasonable controls to ensure that the instructions are properly authorised and carried out.
              (5) The licensee must ensure that it and must do all things necessary to ensure that any person