✔ Records must be available at any time to show the exact assets held on
behalf of clients, in specific client accounts.
✔ Records must be accurate, documenting specific financial instruments
and funds held, with a complete audit trail.
✔ Firms must have regular reconciliations between internal accounts and
third parties managing client funds.
✔ Client funds must be held separately from those of the investment firm.
✔ Client funds held by a third party must be easily identifiable from the
financial instruments belonging to the investment firm.
✔ Firms must put in place adequate organisational arrangements to
minimise the risk of the loss to the client.
✔ Information on client assets and client investments in financial
instruments must be immediately available to regulators and insolvency
practitioners on request.
✔ Records should include internal accounts, documents about where client
funds are held, details of accounts with third parties, details of
companies conducting outsourced activities. Contact details for
individuals handling client accounts at third party companies, should also
✔ Firms must not use financial instruments on behalf of clients in a
country that does not regulate the safekeeping of assets.
✔ Client funds have to be deposited with a central bank, credit institution,
authorised bank or recognised money market fund.
✔ Clients must give consent to have their funds placed in a money market
✔ Only 20% of client funds can be placed with subsidiaries of the same
✔ One individual should be appointed with overall responsibility for
compliance obligations relating to client assets.
✔ External auditors should review the systems and procedures in place at
least once a year.
✔ Firms providing execution and
research services need to price
each service separately.
✔ Research payment accounts
should only be funded by a
specific research charge to the
✔ Client charges should be based
on budgets set by the
✔ Client charges for research
should not be linked to the
volume and value of
✔ Firms should draw up a
governance document, which
outlines specific requirements
on research spending.
✔ Reports from third parties,
paid for by a corporate issuer
to promote new issuances
are permitted as a minor
non-monetary benefit. This
needs to be disclosed to
✔ Third parties may not allocate
“valuable” resources to an
investment firm for research