증권 및 선물(고객 자금) 규칙 / Securities and Futures (Client Money) Rules

4 Securities and Futures (Client Money) Rules
4.1 The Client Money Rules prescribe the manner in which licensed corporations and their associated entities should deal with client money received or held in Hong Kong.
Requirements are specified for payment of client money into segregated accounts and payments out of the accounts, for the treatment of interest earned and for reporting non-compliance.

Application
4.2 The Client Money Rules have been made by the SFC under s. 149, SFO, and apply to client money of a licensed corporation that is received or held by or on behalf of:
(a) the licensed corporation in the course of conducting a regulated activity; or

(b) its associated entity in relation to that activity.

4.3 The Client Money Rules do not apply to client money of a licensed corporation that:
(a) is received or held outside Hong Kong by the licensed corporation or its associated entity while it remains outside Hong Kong;

(b) has at any time been received or held in Hong Kong by the licensed corporation or its associated entity, once that money has been transferred outside Hong Kong in accordance with the Client Money Rules; or

(c) is held in a bank account by the client in his own name.

Sources of client money
4.4 Under the Client Money Rules, client money to be safeguarded includes all amounts received by the licensed corporation or its associated entity, from or on behalf of clients (see Note below), less amounts due from the clients and any proper charges due.
Note: Section 4(3), Client Money Rules lists money received in respect of Type 1, Type 2, Type 3 and Type 8 regulated activities as well as all other amounts received from or on behalf of clients.

Mode of treatment of client money on receipt
4.5 The licensed corporation or any associated entity receiving or holding client money should have one or more segregated accounts, each of which should be designated as a trust or client account, maintained with an AFI or any other person approved by the SFC.

4.6 Within one business day of receiving the above money, the licensed corporation or associated entity should pay the money:
(a) into a segregated account;

(b) to the client directly;

(c) in accordance with a written direction; or

(d) in accordance with a standing authority.

4.7 It shall hold the money in the segregated account until it has to make payment:
(a) to the client;

(b) in accordance with a written direction;

(c) in accordance with a standing authority;

(d) to meet settlement or margin requirements in respect of dealing in securities or futures

contracts; or

(e) to meet amounts due from the client to the licensed corporation or associated entity in respect of any of the corporation’s licensed regulated activity.

4.8 Payments in accordance with a standing authority are subject to the obligation of the licensed corporation or associated entity not to pay out client money received or held in a segregated account, in the same way as it may not deal with client securities or securities collateral as specified in section 3.12 above.

4.9 Interest received on client money held is primarily due to the client unless otherwise agreed in writing.

4.10 The requirements in respect of standing authorities are exactly the same as those for client securities and securities collateral, including the renewal by notification from the licensed corporation and the simplification of the rules for professional investors (“PIs”). (Refer to sections 3.5 to 3.6 above.)

4.11 The licensed corporation or associated entity is required to pay any money held in a segregated account that is not client money out of the account within one business day of being aware of the fact.

4.12 A licensed corporation or associated entity which becomes aware of a failure to meet the requirements to open a segregated account, to pay money into the account or to retain money in the segregated account as specified must report the fact to the SFC within one business day after becoming aware of such failures.

4.13 A failure by a licensed corporation or associated entity to comply with the requirements to pay money into or out of a segregated account in the manner specified, without reasonable excuse or with an intention to defraud, is an offence and the offender is liable to pay penalties and to imprisonment on conviction.

Revision question:
Question 8: What event will trigger a duty for a licensed corporation to make a report to the SFC under the Client Money Rules? What are the likely consequences?
Answer 8: If the licensed corporation or associated entity becomes aware of a failure to open a segregated account, pay money into the account or retain the money in the segregated account as specified, it must report the matter to the SFC within one business day after becoming aware of such failures. It is an offence to have failed to comply with the requirements as described above and the failure to do so will attract penalties.

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