Compliance Lab Topic

No Custody

Learn the rule boundary, apply the review habit, and complete the topic quiz to update your lab mastery score.

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Plain-English Definition

What it means

No custody means the worker or system must not take possession or control of client funds, assets, passwords, checks, transfer authority, or account access unless specifically permitted by role and process.

Why It Matters

What it protects

It protects clients from unauthorized control and protects the firm from serious custody violations, theft risk, and improper asset handling.

Mechanics

How it works

Check whether the action involves holding client property, directing movement of assets, accessing credentials, or controlling funds. If custody risk appears, stop and escalate.

Applied Example

How it shows up

A client offers login credentials or asks the worker to move money directly. The learner should not accept credentials or control funds. The request must be routed through approved procedures.

Practice Frame

What to do

Refuse improper custody, explain the safe process, direct the client to approved channels, and document or escalate the event.

Common Mistakes

What to avoid

  • Accepting passwords.
  • Holding checks or funds improperly.
  • Moving assets outside approved workflow.
  • Treating convenience as permission.

Compliance Frame

How to review it

Ask: Am I gaining control over client property, access, or movement of assets?

Review Habit

What to remember

Never solve convenience problems by taking control you are not authorized to have.

Topic Checklist

Before you mark this complete

  • Define the compliance concept in plain English.
  • Identify what client, account, communication, product, or process risk is present.
  • Name the control: disclose, document, approve, restrict, pause, or escalate.
  • Confirm whether the current facts are complete enough to act.
  • Choose the safest next step and explain why.

Ready Check

Complete this short quiz to save your score on this device and update your Compliance Lab progress. Scores are stored in this browser, so clearing site data or switching devices may reset them.