7. An association shall not place a security in the custody of an entity referred to in paragraph 6(1)(b) unless the association has entered into a written custodial agreement with that entity.
8. An association shall, on a daily basis, deposit any net amount received by the association as a result of any security transaction in an account kept by the association
(a) in the association;
(b) with a financial institution that is authorized to accept deposits by a law of the jurisdiction where the financial institution is carrying on business;
(c) with a trust company that is authorized to hold money in trust by a law of the jurisdiction where the trust company carries on business;
(d) with the government of the jurisdiction in which the association is carrying on business, or with an agency thereof that is authorized to act as a custodian of securities; or
(e) with CDS Clearing and Depository Services Inc.
- SOR/94-78, s. 1;
- SOR/2010-285, s. 2.
REGISTRATION OF A SECURITY
9. (1) Subject to subsections (2) and (3), an association shall ensure that every security is registered in the association’s name in the register of the entity that issued the security.
(2) Subsection (1) does not apply in respect of a security that
(a) cannot be registered in the association’s name for any reason that is beyond the control of that association;
(b) is under the control of the government of a jurisdiction in which the association is carrying on business;
(c) is held by the association as collateral or for safekeeping;
(d) is registered in the name of a nominee of the association or of an entity referred to in paragraph 6(1)(b);
(e) is held under a book entry certificateless or immobilization system; or
(f) is held temporarily by an agent of the association, a liquidator, a trustee or the issuer of the security for purposes of reorganization, amalgamation, liquidation or voting.
(3) Where a security is otherwise protected against loss, fraud, theft and destruction, the association may hold the security
(a) in bearer form; or
(b) in registered form in a name other than the association’s name.
BONDING AND INSURANCE
10. (1) An association shall acquire and at all times maintain one or more bonds issued by an entity authorized to insure risks under the laws of the jurisdiction in which the entity carries on business to indemnify the association for any loss in respect of assets owned or held by that association arising out of a dishonest or criminal act of an officer or employee of that association.
(2) An association shall, in respect of assets owned or held by the association, acquire and at all times maintain one or more insurance policies to indemnify that association for loss arising out of damage to, or the destruction or mysterious disappearance of, those assets or out of any other usual contingency.
- Date modified: