Regulations for Fund Management Companies

How should customer monies received by a fund manager be handled?

Funds Management Companies must not commingle monies received on account of its customer with other funds, or use the monies as margin or guarantee for, or to secure any transaction of, or to extend the credit of, any person other than the customer.

The holder must, no later than the business day immediately following the day on which the holder receives money on account of its customer or is notified of the receipt of such money (whichever is later) —

  1. deposit the money in a trust account or other account into which
    1. the retail customer directs that the moneys be deposited;
    2. to which the retail customer has legal and beneficial title; and
    3. which is maintained with a specified financial institution; and;
  2. pay the money to the customer;

  3. deposit the money with an approved clearing house, a recognised clearing house, a member of an organised market or a member of a clearing facility; or

  4. with the exceptions that a capital markets services holder licence may hold moneys received on account of its customer on trust for the customer, to invest the money in
    1. any Government securities;
    2. any debt instrument of the government of the country of an organised market on which the holder normally transacts its business; or
    3. any other securities or instrument as the Authority may from time to time determine.