Whole Section

  • Rule 6B — Collateral

    • 6B.1 Trust Arrangements

      • 6B.1.2

        CDP shall have the right to commingle any or all Collateral held by it or otherwise provided to it by Clearing Members, except where such Collateral is held by or otherwise provided to CDP solely in respect of Customer Accounts, in the same bank account or custodian account.

        Added on 21 January 201321 January 2013 and amended on 10 December 201810 December 2018.

      • 6B.1.1

        Subject to all rights and remedies of CDP against or in respect of Collateral under these Clearing Rules, the Security Deed and the SFA, Collateral held by or otherwise provided to CDP shall be held on trust by CDP for the benefit of:

        (1) Clearing Members, except where such Collateral is held by or otherwise provided to CDP solely in respect of Customer Accounts; and
        (2) the relevant customers of the Clearing Member pursuant to the SFA where such Collateral is held by or otherwise provided to CDP solely in respect of Customer Accounts.

        Added on 21 January 201321 January 2013.

    • 6B.2 Security Deed to be executed by Clearing Member

      • 6B.2.1

        Prior to CDP commencing any clearing activities in respect of any Clearing Member, the Clearing Member shall execute and deliver a Security Deed in the form and on terms prescribed by CDP, setting out the terms under which its Collateral are provided to, and held by, CDP.

        Added on 21 January 201321 January 2013.

    • 6B.3 General Lien and Right to Set-Off

      • 6B.3.2

        Without prejudice to the generality of the foregoing, in addition to any Security Interest or other right or remedy which CDP may have under these Clearing Rules, contract, law or equity, and subject to any applicable restrictions pursuant to the provisions of the SFA and/or imposed by the Authority, CDP may at any time consolidate any or all accounts, notwithstanding that any relevant positions remain open, of the Clearing Member and set-off and/or transfer and/or apply any Collateral in such accounts towards satisfaction of any liabilities of the Clearing Member to CDP, whether or not:

        (1) such Collateral and liabilities are denominated in the same currency; and
        (2) such liabilities are due, owing or incurred, or joint or several.

        Added on 21 January 201321 January 2013.

      • 6B.3.1

        Without prejudice and in addition to any Security Interest or other right or remedy which CDP may have under these Clearing Rules, contract, law or equity, and subject to any applicable restrictions pursuant to the provisions of the SFA and/or imposed by the Authority, CDP shall have a lien on all Collateral deposited with or provided to CDP and on any other monies and/or assets of the Clearing Member which may be or become available to CDP.

        Added on 21 January 201321 January 2013.

    • 6B.4 Collateral Deposit

      • 6B.4.1

        A Clearing Member shall deposit or otherwise provide to CDP such Collateral, in such acceptable form and denomination as may be prescribed by CDP from time to time, subject to such terms and conditions prescribed by CDP from time to time.

        Added on 21 January 201321 January 2013.

    • 6B.5 Collateral Withdrawal

      • 6B.5.1

        Where any obligation under these Clearing Rules, the Security Deed, or as may otherwise be owing to CDP remains outstanding on the part of a Clearing Member, such Clearing Member shall have no right to withdraw any Collateral or request for the repayment of any credit balance held with or subject to the control of CDP without CDP's prior consent.

        Added on 21 January 201321 January 2013.

      • 6B.5.2

        Any withdrawal of Collateral consented to by CDP under these Clearing Rules shall not be deemed to be a release of the existing or future Security Interest over any remaining Collateral held with or subject to the control of CDP, other than the withdrawn Collateral.

        Added on 21 January 201321 January 2013.

      • 6B.5.3

        A request for withdrawal of Collateral may only be made by a Clearing Member subject to Rule 6B.5.1. A Third Party may not withdraw or request for the withdrawal of any Collateral held with or subject to the control of the CDP, other than through the Third Party's Clearing Member. All Collateral permitted by the CDP to be withdrawn shall be returned only to the Clearing Member.

        Added on 21 January 201321 January 2013.

    • 6B.6 Valuation of Collateral

      • 6B.6.1

        CDP shall value Collateral deposited with or provided to CDP as it deems appropriate. CDP shall, at its sole discretion, determine

        (1) what monies and assets are acceptable as Collateral;
        (2) when any monies and/or assets cease to be acceptable as Collateral; and
        (3) the valuation to be attributed thereto.

        Added on 21 January 201321 January 2013.

      • 6B.6.2

        If any Collateral deposited or provided by any Clearing Member is found in any way to be unacceptable by CDP, CDP shall have the right to immediately give a zero value to such Collateral for the purposes of satisfying such Clearing Member's obligations under these Clearing Rules or as may otherwise be owing to CDP, pursuant to which such Collateral was deposited or provided.

        Added on 21 January 201321 January 2013.

      • 6B.6.3

        Following revaluation of any Collateral deposited with or provided to CDP, where such Collateral is found to be insufficient to meet any obligation of the Clearing Member under these Clearing Rules or as may otherwise be owing to CDP, pursuant to which such Collateral was deposited or provided, the Clearing Member shall deposit with or provide to CDP such additional Collateral as may be required to meet such obligation, within such time as CDP may require.

        Added on 21 January 201321 January 2013.

      • 6B.6.4

        In the event of any dispute as to any matters covered under this Rule, CDP's decision shall be final and binding.

        Added on 21 January 201321 January 2013.

    • 6B.7 Investment and Use of Collateral

      • 6B.7.1

        CDP may invest, manage and use Collateral in such manner as it shall deem fit provided that:

        (1) Collateral solely in respect of Customer Accounts shall be invested in accordance with these Clearing Rules, the Security Deed and the SFA; and
        (2) CDP shall not use any Collateral received and notified to it as Collateral solely in respect of Customer Accounts, to settle any obligations that are incurred in relation to any House Account, except in accordance with these Clearing Rules, the Security Deed and the SFA.

        Added on 21 January 201321 January 2013.

      • 6B.7.1A

        Each Clearing Member shall secure contractual waivers in favour of the Clearing Member from its customers waiving their respective rights to all interest and investment earnings from the Collateral held with or otherwise provided to CDP solely in respect of Customer Accounts, in the form and manner as may be prescribed by the CDP, as may be necessary to give effect to CDP's rights in relation to interest and fees under Rule 6B.8.

        Added on 22 April 201322 April 2013.

      • 6B.7.2

        All Collateral deposited or provided by each Clearing Member to CDP shall be subject to these Clearing Rules, the Security Deed and the SFA (each as amended or supplemented from time to time). Each Clearing Member shall ensure that all Collateral deposited or provided to CDP are deposited or provided only on the foregoing basis and shall also ensure that, prior to depositing or providing any Collateral to CDP for the account or for the contracts of any person, such person has been notified of and has accepted the foregoing.

        Added on 21 January 201321 January 2013.

    • 6B.8 Interest and fees

      • 6B.8.1

        The Clearing Member shall pay CDP such administrative fees as may be prescribed by CDP and notified to the Clearing Member from time to time for the investment and management of the Collateral. Administrative fees may be deducted from the interest on the Collateral payable to the Clearing Member by CDP pursuant to this Rule 6B.8 or paid directly to CDP as determined by CDP.

        Added on 21 January 201321 January 2013.

      • 6B.8.2

        Unless otherwise provided for in these Clearing Rules, CDP shall pay the Clearing Member interest on the Collateral at such rate and in such manner as prescribed by CDP and notified to a Clearing Member.

        Added on 21 January 201321 January 2013.

      • 6B.8.3

        Except as set forth in this Rule, CDP shall have no obligation to make payment of any other fees, interest and investment earnings arising from or in connection with the Collateral to any person.

        Added on 21 January 201321 January 2013.

    • 6B.9 Safekeeping Indemnity

      • 6B.9.1

        Any Collateral accepted by CDP shall be, where necessary, deposited with the appropriate custodian(s) designated by CDP for safekeeping in a CDP account designated for House Accounts or in a CDP account designated for Customer Accounts, as the case may be, and CDP shall retain control over such Collateral.

        Added on 21 January 201321 January 2013.

      • 6B.9.2

        CDP shall not have any obligation or responsibility to preserve, protect, collect or realise, and under no circumstances shall CDP be liable for any loss or diminution in value or depreciation in or in connection with, the Collateral maintained pursuant to this Rule.

        Added on 21 January 201321 January 2013.

      • 6B.9.3

        A Clearing Member who maintains Collateral with CDP shall indemnify and hold CDP harmless from any loss, damage, costs, charges and/or expenses of whatsoever nature and howsoever arising ("Loss") suffered or incurred by CDP to any designated custodian which may result from or arise with respect to:

        (1) any act, delay or omission in connection with Collateral (whether by such Clearing Member or CDP) deposited with such designated custodian; or
        (2) any contract or agreement between CDP and any designated custodian, or any representation, warranty or undertaking given by CDP to any designated custodian, in relation to or otherwise in connection with Collateral deposited with such designated custodian,

        PROVIDED THAT this indemnity shall not cover any Loss and/or liability of CDP attributable or referable to the gross negligence or wilful misconduct of CDP or any of CDP's officers, agents and/or employees.

        Added on 21 January 201321 January 2013.

      • 6B.9.4

        If any loss of Collateral occurs, or any Collateral becomes unavailable to CDP such that any obligation of the Clearing Member under these Clearing Rules or as may otherwise be owing to CDP, pursuant to which such Collateral was deposited or provided, cannot be fully met as determined by CDP, the Clearing Member shall deposit with or provide to CDP such additional Collateral as may be required to meet such obligation within such time as CDP may require.

        Added on 21 January 201321 January 2013.

    • 6B.10 Regulatory Information

      • 6B.10.1

        Clearing Members shall provide CDP with any information necessary in relation to such Collateral deposited with or provided to CDP to enable CDP to meet its reporting obligations to the Authority and/or other relevant governmental or regulatory authorities or for any other regulatory purposes including but not limited to withholding tax purposes.

        Added on 21 January 201321 January 2013.