S.L. 590.1 Art. 22Subject person may delegate functions and duties to entrust assets to another subject person.        Cap. 386.

(1) A subject person may delegate part of the functions and duties under regulation 14 to another subject person which is qualified and competent to take the control of clients’ assets;

and may place, entrust or deposit all or part of a client’s assets held under control with such other subject person.

(2) The liability of the subject person for its own acts or omissions shall not be affected or reduced as a result of the subject person delegating functions and duties, or entrusting all or part of the assets belonging to a client, to another subject person.

(3) Where the subject person delegates or entrusts functions, duties or assets in terms of sub-regulation (1) to a person which is a group company, without prejudice to the liability of such person, the subject person shall be liable for any loss or prejudice suffered by the clients as a result of the acts, omissions or insolvency of such person.

(4) Where the subject person delegates or entrusts functions, duties or assets in terms of sub-regulation (1) to a person which is not a group company, without prejudice to the liability of such person, the subject person shall be liable for any loss or prejudice suffered by the clients as a result of the acts or omissions of such person unless the subject person can prove that such person was and remains qualified and competent to carry out the functions and duties delegated and that the subject person exercised reasonable care to oversee that the functions and duties delegated were undertaken by such person competently.

(5) The liability of the subject person under sub-regulations

(3) and (4) may be varied or reduced with the written consent of the client and in accordance with the terms and conditions of the agreement entered into with the client, the conditions of any licence and such other requirements as may be laid down by the competent authority:

Provided that the subject person discloses fully to the client any risks that may be associated with the nature of the arrangements whereby control is to be exercised and that the agreement with the client shall clearly define the extent of liability of the subject person.

(6) Where the subject person delegates or entrusts functions, duties or assets in accordance with specific written instructions from the client, the subject person shall not be liable for any loss or prejudice suffered by that client as a result of the acts or omissions of the person to whom functions, duties or assets are delegated or entrusted as requested by the client.

(7) For the purposes of this regulation, "group company" in relation to a subject person means any body corporate which is the subject person’s subsidiary or parent company or a subsidiary of the subject person’s parent company, and the terms "parent" and

"subsidiary" shall be construed in accordance with article 2(2) of the

Companies Act.