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Definition

safeguarding and administering investments (commonly known as 'custody') is a regulated activity under article 40 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544 (RAO).

Safeguarding and administering investments consists of both of the following:

1. •

   safeguarding of assets belonging to another, and

2. •

   the administration of those assets.

Arranging custody (for one or more other persons to carry on that activity) is also a regulated activity in its own right under SI 2001/544, art 40.

The activity relates to assets which are designated investments (ie securities or contractually-based investments).

Administering an investment would include, for example, crediting income arising out of an investment to the beneficiary's account; however, it is important that discretion is not exercised in the carrying out of the activities, otherwise the actions will fall within another regulated activity (that of advising on investments, or managing investments), and separate permission will be required. Safeguarding an investment is holding it in safe custody, eg looking after a share certificate.

The Client Assets Sourcebook

The Client Assets Sourcebook