Document ID: chunk:federal_register_of_legislation:F2023C00928:reg:8:p16
Version: federal_register_of_legislation:F2023C00928
Segment Type: reg
Provision Reference: reg 8 (pt 16/34)
Character Range: 53011–55945

interests of each client.
              (16) The licensee must not permit a custodian or a sub-custodian to be involved in discretionary decisions concerning a deposit account unless the licensee is satisfied that the custodian or sub-custodian has set out in writing and implements reasonable processes for:

                  (a) determining which account to use; and

                  (b) monitoring performance by the issuer of the account of the issuer's obligations in relation to that account; and

                  (c) taking action in case of failure of the issuer of the account of the issuer's obligations in relation to that account.

              (17) The licensee must ensure that it keeps records of client portfolio assets in a way that enables the holding of those assets to be conveniently and properly audited by an auditor of the MDA service and do all things necessary to ensure that any custodian or sub-custodian keeps such records in relation to any asset that is held by the custodian or sub-custodian.
              (18) The licensee must:

                  (a) review the appropriateness of the written policies and processes it is required to have under subsection (15) and any written processes it relies on to comply with subsection (16) at least once in every 13 months; and

                  (b) if directed by ASIC in writing, arrange for a report on the effectiveness or reasonableness of the processes or policies to be prepared and given to ASIC.

              (19) A licensee that engages a custodian to hold client portfolio assets must ensure that:

                  (a) if the licensee holds a beneficial interest in the client portfolio assets on behalf of the client, it has a written agreement with the custodian that meets the requirements of paragraphs (c) to (e) except:

                     (i) to the extent that, in relation to client portfolio assets held outside of this jurisdiction, the licensee holds documents that demonstrate that it is not reasonably practicable to engage another person to hold client portfolio assets who is willing to include such matters in the agreement; or
                     (ii) where the custodian is controlled by the licensee and the licensee is liable to its client for the acts and omissions of the custodian as if they were the acts or omissions of the licensee; and
                  (b) if the licensee does not hold a beneficial interest in the client portfolio assets on behalf of the client:
                     (i) it has a written agreement with the custodian that meets the requirements of paragraphs (c) to (e); and
                     (ii) it does all things necessary to ensure that the custodian has a written agreement with each person that the custodian engages to hold client portfolio assets and the written agreement meets the requirements of paragraphs (c) to (e) as if the person were the custodian and the