Common use of Custody of Funds Clause in Contracts

Custody of Funds. All monies, approved debt securities and other property that CIF receives from Client or from any other person (including the HKSCC, SEOCH, HKCC and any other clearing house) for the Account shall be held by CIF as trustee, segregated from its own assets and be paid into a Segregated Bank Account as defined in Securities and Futures Ordinance as soon as practicable and in any event within two bank trading days after its receipt, and that all monies, approved client’s property so held by CIF shall not form part of its assets for insolvency or winding up purposes but shall be returned to Client promptly upon the appointment of a provisional liquidator, liquidator or similar officer over all or any part of CIF ’s business and assets. CIF shall be entitled and is hereby authorized to hold any monies held by CIF on behalf of the Client whether for the Account or otherwise, in a bank account whether situated in Hong Kong or not. The Client acknowledges that any monies deposited by it with CIF in respect of transactions on exchanges in the United States of America will be transferred to a bank situated in the United States of America. CIF confirms that any such bank has, or will have, acknowledged that: - all money standing to the credit of the account is held by CIF as trustee and the bank is not entitled to combine the account with any other account or to exercise any right of set-off or counterclaim against monies in such account in respect of any liability owed by CIF to such bank; and - the title of the account sufficiently distinguishes it from any account containing monies that belong to CIF. The Client acknowledges and agrees that, except insofar as CIF is obliged to do so under the rules and regulations of any regulatory authority or other body to whose jurisdiction CIF is subject, if a bank, broker, exchange, clearing house or other person to whom CIF has paid all or part of the Client’s money in accordance with the operation and maintenance of the Account hereunder, fails to discharge its obligations to CIF in respect of such monies, CIF shall not be liable, and shall not be obliged to render performance, to the Client in respect thereof.