Document ID: chunk:federal_register_of_legislation:F2024C00757:reg:1:p14
Version: federal_register_of_legislation:F2024C00757
Segment Type: reg
Provision Reference: reg 1 (pt 14/22)
Character Range: 80676–83533

as custodial staff; and
       (d) resources are made available to custodial staff to the extent necessary for them to adequately perform their duties as custodial staff.
    (40K) The licensee must:
       (a) if the licensee has engaged a custodian, also comply with subsections (40E) to (40J) as if any sub-custodian were the custodian, except to the extent that, in relation to IDPS property outside of this jurisdiction, it is not reasonably practicable for the licensee to do all things necessary to ensure that the sub-custodian does a particular thing; and
           Note:    For example, if the custodian engaged a sub-custodian, the licensee would need to do all things necessary to ensure that the requirements of subsections (40E) to (40J) were satisfied in relation to the custodian, the sub-custodian and their custodial staff, subject to the exception in relation to property outside this jurisdiction.
       (b) keep for 7 years records demonstrating how it complies with subsections (22) and (40C) to (40J) and paragraph(40K)(a); and
       (c) set out in writing and implement a reasonable process to monitor and assess the performance, by any custodian it engages, of its obligations as a custodian and must do all things necessary to ensure that a custodian it engages sets out in writing and implements a reasonable process to monitor and assess the performance of its obligations by any sub-custodian; and
       (d) not permit a custodian it engages 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:
           (i) determining which account to use; and
           (ii) monitoring performance by the issuer of the account of the issuer's obligations in relation to that account; and
           (iii) taking action in case of failure of the issuer of the account of the issuer's obligations in relation to that account; and
       (e) ensure that it keeps records of the IDPS property in a way that enables the holding of the IDPS property to be conveniently and properly audited by an auditor of the IDPS operator and do all things necessary to ensure that any custodian or sub-custodian keeps such records in relation to any IDPS property that is held by the custodian or the sub-custodian; and
       (f) set out in writing and implement a reasonable process for determining if it should hold IDPS property or engage a custodian, unless either choice is determined by its contractual obligations, and if it is to engage a custodian, which person will be the custodian and on what terms. The process must involve the application of a reasonable written policy approved by the directors which addresses potential conflicts of interest and other considerations