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571I PDFTitle:SECURITIES AND FUTURES (CLIENT MONEY) RULESGazette Number:L.N. 202 of 2002; L.N. 12 of 2003
Section:5Heading:Payment of client money out of segregated accountsVersion Date:01/04/2003


(1) A licensed corporation or an associated entity of a licensed corporation that holds any amount of client money of the licensed corporation in a segregated account shall retain it there until it is-

        (a) paid to the client of the licensed corporation, being the client on whose behalf it is being held;
        (b) subject to subsection (3), paid in accordance with a written direction;
        (c) subject to subsections (2) and (3), paid in accordance with a standing authority;
        (d) required in order to meet the client's obligations to meet settlement or margin requirements in respect of dealing in securities or futures contracts carried out by the licensed corporation on behalf of the client of the licensed corporation, being the client on whose behalf it is being held; or
        (e) required to pay money that the client of the licensed corporation, being the client on whose behalf it is being held, owes-
          (i) to the licensed corporation in respect of the carrying on by the licensed corporation of any regulated activity for which it is licensed; or
          (ii) to the associated entity in respect of the receipt or holding of client money for or on behalf of the client by the associated entity.
(2) A licensed corporation or an associated entity of a licensed corporation shall not pay any amount of client money of the licensed corporation under subsection (1)(c) if-
        (a) to do so would be unconscionable; or
        (b) the standing authority authorizes payment to an account in Hong Kong of-
          (i) the licensed corporation or associated entity in circumstances other than those set out in subsection (1)(d) or (e); or
          (ii) any corporation with which the licensed corporation is in a controlling entity relationship or in relation to which the associated entity is a linked corporation,
          and that account is not a segregated account.
(3) Neither a licensed corporation nor an associated entity of a licensed corporation as referred to in subsection (1) may pay, or permit to be paid, any client money of the licensed corporation to-
        (a) any of its officers or employees; or
        (b) any officer or employee of any corporation with which the licensed corporation is in a controlling entity relationship or in relation to which the associated entity is a linked corporation,
unless that officer or employee is the client on whose behalf such client money is being held.