Financial Crime Compliance Principles for Securities Custody and ...

Financial Crime Compliance Principles for Securities Custody and Settlement

Introduction to ISSA's Examples of Draft Contractual Terms to Support the Implementation of the Principles

May 2017

What is it? The document provides financial institutions with initial guidance on the drafting of contractual terms between Custodians and their regulated Account Holders governing the application of the ISSA Financial Crime Compliance Principles to cross-border securities custody relationships.

What does it provide me with? Conditions governing account relationships between Custodians and Account Holders are extremely diverse and subject to various jurisdictions. Hence, this document does not aspire to provide specimen language, but to inspire approaches that might serve as a starting point for in-house legal teams seeking to amend contractual terms of account to facilitate an application of the Principles. The document includes:  

The meaning of the terms and definitions in the Agreement between the Custodian and its regulated Account Holders Contractual Guidance – Suggested Examples of Draft Language for each Principle contained in the ISSA Financial Crime Compliance Principles: o Policies and Standards (Principles 1- 4) o Account Holder's Assets – Segregated versus Omnibus Accounts (Principle 5) o Segregated Client Accounts (Principles 6 -8) o Omnibus Client and Commingled Accounts (Principles 9 – 16) o Disclosure of Buyers and Sellers (Principle 17) o Management of Conflict of Laws.

Those Principles which may benefit from contractual force have been identified. In each case, different drafting approaches are provided in the form of various examples.

Who should benefit from it? Those financial institutions who are interested to take benefit of suggested examples in order to provide the required support on the drafting of contractual terms with their regulated Account Holders.

Where can I obtain it? The full document is available in the Closed User Group on ISSA's homepage. All ISSA Member institutions have access to this Closed User Group.

Financial Crime Compliance Principles – Introduction to Examples of Draft Contractual Terms, May 2017