S.L. 590.1 Art. 12Assets held under control not subject to the rights of creditors of the subject person.     Cap. 12.

(1) The creditors of a subject person shall have no claim or right of action on or against the assets held under the control of the subject person for and on behalf of and in the interest of any client and such assets shall not be affected in any manner by the provisions of laws and regulations in force regulating the insolvency or bankruptcy of the subject person.

(2) In the event of any such insolvency or bankruptcy or related order or resolution, or in the event that the competent authority so requires, the subject person or any administrator or receiver or other officer appointed to represent it by any court or otherwise, shall on demand of any client or of the competent authority, immediately transfer the control, possession and title to all assets held by or in the name of the subject person on behalf of the client to another subject person or to such other person as may be instructed by the client or by the competent authority.

(3) In the event that any assets held under the control of the subject person are, at the request of any creditor of the subject person, made subject to any precautionary or executive act or warrant granted by any Court in terms of the Code of Organization and Civil Procedure, the client on whose behalf such assets are being held or the competent authority may, by application to the Court, request the release of the assets from such act or warrant and the Court shall, on the production of evidence as it may deem fit, accede to the application without undue delay.

(4) Security interests, liens or rights of set-off over assets belonging to a client and enabling a third party to dispose of the client’s assets in order to recover debts that do not relate to the client or provision of services to the client are not permitted except where this is required by the applicable law in a third country jurisdiction in which the assets belonging to the client are held.

(5) Where a subject person is obliged to enter into agreements that create such security interests, liens or rights of set-off, it shall disclose that information to clients indicating to them the risks associated with those arrangements.

(6) Where security interests, liens or rights of set-off are granted by the subject person over assets belonging to the client, or where the subject person has been informed that they are granted, these shall be recorded in the client’s contracts and the subject person’s own accounts to make the ownership status of the client’s assets clear, such as in the event of an insolvency.