1.5.1 Fidelity Fund Maintained by Exchange
(1) The Exchange is required under the Act to establish and maintain a fidelity fund consisting of such amount as prescribed by MAS to:
(a) compensate any Person (other than an Accredited Investor) who suffers pecuniary loss through the Defalcation committed by a Member that is a CMS licence holder, or any of its directors, officers, employees or representatives, in respect of any money or other property that was entrusted to or received by the Member or any of its directors, officers, employees or representatives, for or on behalf of the Person, or by reason that the Member was a trustee of the money or other property; or
(b) pay to a liquidator, official assignee or trustee in bankruptcy of a Member, that is a CMS licence holder, that is being wound up or the subject of bankruptcy proceedings respectively, to make up or reduce the deficiency arising because the available assets of the Member are insufficient to satisfy any debts arising from its trading activities that have been proved in the liquidation or bankruptcy of the Member.
"Defalcation" refers to the misapplication, including misappropriation, of any property as contemplated under the Act.
(2) Pursuant to Rule 1.5.1(1), the fidelity fund will not be applied in the event of a Bank Trading Member's defalcation, winding up or bankruptcy.