Markets in Financial Instruments and Miscellaneous Provisions Act 2007

11.

Amendments to Investment Intermediaries Act 1995.

11.— Section 52 of the Investment Intermediaries Act 1995 (as amended by the Investor Compensation Act 1998) is amended—

( a) in subsection (2)( c) and ( d), by deleting “, controlled” in each of the 2 places in which it appears,

( b) in subsection (7)( a), ( b) and ( c) by deleting “, controlled” in each of the 3 places in which it appears, and

( c) by inserting the following after subsection (9):

“(10) For the purposes of this section, an investment business firm is deemed to hold client money where—

( a) the money has been lodged on behalf of a client of the firm to an account with a credit institution or relevant party in the name of the firm or of any nominee of the firm, and

( b) the firm has the capacity to effect transactions on that account.

(11) For the purposes of this section, an investment business firm is deemed to hold client investment instruments where the firm—

( a) has been entrusted by or on account of a client with those instruments, and

( b) either—

(i) holds those instruments, including by way of holding documents of title to them, or

(ii) entrusts those instruments to any nominee,

and the firm has the capacity to effect transactions in respect of those instruments.

(12) In this section—

( a) ‘nominee’ means a person acting on behalf of an investment business firm as nominee, custodian, or otherwise, and includes an eligible custodian and a nominee company, and

( b) ‘relevant party’ means an exchange, clearing house, intermediate broker, OTC counterparty or investment business firm.”.