• COBS 14.1 COBS 14.1 Client Assets

    • COBS 14.1.1 Application

      This section applies to an Authorised Person which:

      (a) holds or controls Client Assets;
      (b) Provides Custody or Arranges Custody; or
      (c) holds or controls Relevant Money.

    • COBS 14.1.2 COBS 14.1.2


      • Guidance

        1. Principle 9 of the Principles for Authorised Persons (Customer assets and money) in GEN 2.2.9 requires an Authorised Person to arrange proper protection for Clients' Assets and Relevant Money where the Authorised Person is responsible for them. An essential part of that protection is that an Authorised Person must properly safeguard Client Assets held or controlled on behalf of a Client in the course of, or in connection with, the carrying on of Investment Business, or properly safeguard Relevant Money in the course of the delivery of Payment Services, in or from the Abu Dhabi Global Market.
        2. An Authorised Person must introduce adequate organisational arrangements to minimise the risk of the loss or diminution of Client Assets and Relevant Money, or of rights in connection with Client Assets and Relevant Money, as a result of, for example, the Authorised Person's or a third party's insolvency, fraud, poor administration, inadequate recordkeeping or negligence.
        3. For the purposes of interpretation of this Chapter by an Authorised Person engaging in Payment Services as part of undertaking the Regulated Activity of Providing Money Services, only those Rules which apply to Relevant Money shall be applicable. References which require the safekeeping of Relevant Money in a Client Account do not result in a Payment Service User becoming a Client of a Payment Service Provider.

    • COBS 14.1.3 General Requirements

      (a) An Authorised Person which holds or controls Client Money or Relevant Money must comply with the provisions of Rule 14.2 (the "Client Money Rules") in relation to that Client Money or Relevant Money, as applicable, and have systems and controls in place to be able to evidence compliance with the Client Money Rules.
      (b) An Authorised Person which also holds or controls Client Investments, Provides Custody or Arranges Custody must also comply with Chapter 15.
      (c) An Authorised Person must have systems and controls to ensure that Client Assets and Relevant Money are identifiable and secure at all times.
      (d) Where the Authorised Person holds a mandate, or similar authority over an account with a third party, in the Client's own name, its systems and controls must:
      (i) include a current list of all such mandates and any conditions placed by the Client or by the Authorised Person on the use of the mandate;
      (ii) include the details of the procedures and authorities for the giving and receiving of instructions under the mandate; and
      (iii) ensure that all Transactions entered into using such a mandate are recorded and are within the scope of the authority of the Employee and the Authorised Person entering into such Transactions.

    • COBS 14.1.4 COBS 14.1.4 Holding or Controlling Client Assets or Relevant Money

      Client Assets or Relevant Money are held or controlled by an Authorised Person if they are:

      (a) directly held by the Authorised Person;
      (b) held in an account in the name of the Authorised Person; or
      (c) held by a Person, or in an account in the name of a Person, controlled by the Authorised Person.

      • Guidance

        1. The Regulator would consider a Person to be controlled by an Authorised Person if that Person is inclined to act in accordance with the instructions of the Authorised Person.
        2. The Regulator would consider an account to be controlled by an Authorised Person if that account is operated in accordance with the instructions of the Authorised Person.