COBS 15.5 COBS 15.5 Holding or Arranging Custody with Third-Party Agents
COBS 15.5.1(a) Before an Authorised Person holds a Safe Custody Investment with a Third-Party Agent or Arranges Custody through a Third-Party Agent, it must undertake an assessment of that Third-Party Agent and have concluded on reasonable grounds that the Third-Party Agent is suitable to hold those Safe Custody Investments.(b) An Authorised Person must have systems and controls in place to ensure that the Third-Party Agent remains suitable.(c) When assessing the suitability of the Third-Party Agent, the Authorised Person must ensure that the Third-Party Agent will provide protections equivalent to the protections conferred in this section.
An Authorised Person must be able to demonstrate to the Regulator's satisfaction the grounds upon which the Authorised Person considers the Third-Party Agent to be suitable to hold Safe Custody Investments.
When assessing the suitability of a Third-Party Agent, an Authorised Person must have regard to:(a) its credit rating;(b) its capital and financial resources in relation to the amount of Safe Custody Investments held;(c) the insolvency regime of the jurisdiction in which it is located;(d) its arrangements for holding the Investments;(e) its regulatory status, expertise, reputation and history;(f) its Group structure;(g) its use of agents and service providers; and(h) any other activities of the agent.