Protection of client assets

Principle #3

Implementation guidance

3.1 Safekeeping of client assets

 
 
 

Protect any assets held on customers’ behalf. This applies to investment gold that has been purchased but not yet collected or delivered. It applies to gold that is being delivered to customers. And it applies to cash held for customers, before, during or after a gold purchase or sale.

A provider must ensure adequate protection of customers’ gold holdings and other assets, including cash held on behalf of customers.

Keep client assets safe:

  • Safeguard your customers’ assets held on their behalf. This could include cash held on their behalf before final settlement of a transaction or gold held in custody for your customer in the short or long term.

Put operational measures in place:

  • Establish adequate operational procedures such as access controls or record-keeping in order to protect your customers’ assets against misuse, fraud, or operational loss.

Safeguard ownership rights:

  • Make adequate arrangements to safeguard your customers’ ownership rights in all of their assets, e.g. in case of company insolvency. 

3.2 Insurance

 
 
 

Procure adequate insurance of business operations and gold holdings to protect customers directly and indirectly. This is especially relevant when safekeeping client assets, such as gold or cash. It is also important to procure insurance so as to satisfy any claims incurred.

Insure the gold in your custody:

  • Adequately insure all gold holdings with cover for loss, damage and theft.

Confirm logistics insurance:

  • Make sure that gold in transit to your customers is adequately insured by you, as the provider, or by the logistics company.

Safeguard your company’s operations:

  • Take out and maintain appropriate general insurance policies, such as liability cover.
  • Consider procuring additional insurance cover, such as against cyber attacks, as required.