Regulatory Alerts2020-07-22
Directive on Trust Accounts by Capital Market Operators
The Securities and Exchange Commission mandates that Capital Market Operators open, maintain, and operate designated Trust Accounts to securely hold client investment funds separate from proprietary accounts. Managing banks and custodians must ensure all receipts and disbursements are clearly attributed to individual clients, promptly report misuse to the regulator, and supply requested data upon request. These accounts are legally protected from the operator’s bankruptcy or liquidation proceedings, with strict non-compliance triggering specific regulatory sanctions.
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