COBS 14.4.7 Client Money received after the Failure of a third party
(a) Client Money or Relevant Money received by the Authorised Person after the Failure of a third party, that would otherwise have been paid into a Client Account at that Failed third party:
(i) must, if Client Money, not be transferred to the Failed third party unless specifically instructed by the Client in order to settle an obligation of that Client to the Failed third party; and
(ii) must, if Client Money, be, subject to (i), placed in a separate Client Account:
(A) on the written instruction of the Client, transferred to a third party other than the one that has Failed; or
(B) returned to the Client as soon as possible.
(iii) must, if Relevant Money, be placed in a separate Client Account maintained with a third party other than the one which has Failed.
(b) If an Authorised Person receives a mixed remittance after the Secondary Pooling Event which consists of Client Money that would have been paid into a Client Account, a Designated Client Account or a Designated Client Fund Account maintained at the third party that has Failed, it must:
(i) pay the full sum into a Client Account other than one operated at the Failed third party; and
(ii) pay the money that is not Client Money out of that Client Account within one Business Day of the day on which the Authorised Person would normally expect the remittance to be cleared.
(c) Whenever possible the Authorised Person should seek to split a mixed remittance before the relevant accounts are credited.