COBS 14.2.7 Appointment of a Third-Party Agent

Past version: effective from 21/10/2015 - 20/10/2015
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(a) An Authorised Person may pay, or permit to be paid, Client Money to a Third-Party Agent in accordance with Rule 14.2.8(a) only where it has undertaken a prior assessment of the suitability of that Third-Party agent and concluded on reasonable grounds that the Third-Party Agent is suitable to hold that Client Money in a Client Account.
(i) When assessing the suitability of the Third-Party Agent, the Authorised Person must ensure that the Third-Party Agent will provide protections equivalent to the protections conferred by this section.
(ii) An Authorised Person must have systems and controls in place to ensure that the Third-Party Agent remains suitable.
(b) An Authorised Person must be able to demonstrate to the Regulator's satisfaction the grounds upon which the Authorised Person considers the Third-Party Agent to be suitable to hold that Client Money.
(c) When assessing the suitability of a Third-Party Agent, an Authorised Person must have regard to:
(i) its credit rating;
(ii) its capital and financial resources in relation to the amount of Client Money held;
(iii) the insolvency regime of the jurisdiction in which it is located;
(iv) its regulatory status and history;
(v) its Group structure; and
(vi) its use of agents and service providers.