COBS 14.2.15 Statutory Trusts

Past version: effective from 21/10/2015 - 08/11/2020
To view other versions open the versions tab on the right

(a) An Authorised Person receives and holds Client Money as trustee in accordance with the following requirements in Rule 14.2.15.
(b) The requirements in (a) are:
(i) for the purposes of and on the terms of the Client Money rules and the Client Money Distribution Rules;
(A) where an Authorised Person maintains only a single Statutory Trust as a general pool of Client Money, subject to (ii), for the Clients for whom that money is held, according to their respective interests in it;
(B) where an Authorised Person has established one or more separate Statutory Trusts of Client Money, subject to (ii), each separate Statutory Trust is held for the Clients of the Authorised Person who are beneficiaries of that specific Statutory Trust according to their respective interests in it;
(ii) for the payment of the costs properly attributable to the distribution of the Client Money in accordance with (i), if such distribution takes place following the Failure of the Authorised Person; and
(iii) after all valid claims and costs under (i) to (ii) have been met, for the Authorised Person itself.
(c) The beneficiaries of each separate Statutory Trust are those Clients:
(i) from whom the Authorised Person has received a signed Statutory Trust disclosure document under Rule 14.2.14(e);
(ii) for whom the Authorised Person maintains, previously maintained or is in the process of establishing a margined transaction(s) in the relevant Client Account at the relevant Recognised Clearing House;
(iii) who are interested in a Designated Client Fund Account or Designated Client Account; or
(iv) to whom any Client Equity Balance or other Client Money is required to be segregated for the Client by the Authorised Person in respect of the margined transactions under (ii) from that separate Statutory Trust.
(d) An Authorised Firm which is subject to the Client Money Rules receives and holds Client Money as trustee on the terms in Rule 14.2.14(d), subject to its obligations to hold Client Money as trustee under the relevant instrument of trust.