AUSTRALIA: ASIC’s Client Money Reporting Rules Finalised

Tuesday October 10 2017

On the 10^th of October 2017, ASIC published a set of Client Money Reporting Rules 2017 which will impose record-keeping, reconciliation and reporting obligations on Australian financial services (AFS) licensees that hold ‘derivative retail client money’ within the meaning of the Corporations Act, unless the client money relates to a derivative that is traded on a fully licensed domestic market, such as ASX 24.

The Rules have been formulated in accordance with recommendations made in Consultation Paper 291 Reporting rules: Derivative retail client money (CP 291).

The reporting requirements hold that :

1. financial services licensee must at all times keep accurate records of the amount of Reportable Client Money it has received from, on behalf of, or for the benefit of a person and is required under Division 2 of Part 7.8 of the Act to hold in a Client Money Account for that person.
2. A financial services licensee must at all times keep accurate records of the total amount of Reportable Client Money it has received from, on behalf of, or for the benefit of all persons and is required under Division 2 of Part 7.8 of the Act to hold in a Client Money Account for those persons.
3. A financial services licensee must retain records made under sub-rules (1) and (2) for at least 7 years from the date the record is made

Violation of such rules will lead to the incurrence of a Maximum Penalty worth $1,000,000.

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