8.1.3. Meaning of "hold" and "control"
Client Assets are held or controlled by an Authorised Firm if they are:
- (a) directly held by the Authorised Firm;
- (b) held in an account in the name of the Authorised Firm;
- (c) held by a Person, or in an account in the name of a Person, controlled by the Authorised Firm; or
- (d) held in the Client’s own name, but the Authorised Firm has a mandate from the Client to manage those assets on a discretionary basis.
Guidance: Examples of Client Assets controlled by an Authorised Firm
For the purposes of COB 8.1.3, the AFSA would consider:
(i) a Person to be controlled by an Authorised Firm if that Person is inclined to act in accordance with the instructions of the Authorised Firm;
(ii) an account to be controlled by an Authorised Firm if that account is operated in accordance with the instructions of the Authorised Firm; and
(iii) if an Authorised Firm has a discretionary portfolio mandate from a Client, even though the assets are to be held in the name of the Client (for example, under a power of attorney arrangement), the Authorised Firm controls those assets as it can execute transactions relating to those assets, within the parameters set out in the mandate, in which situation the rules on mandates in COB 8.4 shall apply.