CSD-3.8 CSD-3.8 Permissible Use of Customers' Money and Assets by Licensed Clearing House
CSD-3.8.1
Where a member of a
licensed clearing house fails to meet its obligations to thelicensed clearing house , thelicensed clearing house may use any money or assets deposited or paid in respect of or in relation to contracts of customers of the member and held by thelicensed clearing house , including any money deposited in the trust account and any assets deposited in the custody account referred to in rule CSD-3.7.3 (b), to meet the obligations of the member to thelicensed clearing house , if thelicensed clearing house has reasonable grounds for forming an opinion that:(a) The failure of the member to meet the member's obligations is directly attributable to the failure of any of the customers of the member to meet that customer's obligations under anymarket contract ; and(b) The failure to use the money or assets to meet the obligations of the member may jeopardize the financial integrity of thelicensed clearing house .CSD-3.8.2
A
licensed clearing house shall notify the CBB prior to using any such money or assets in the circumstances specified in Paragraph CSD-3.8.1.Amended: April 2016CSD-3.8.3
A
licensed clearing house shall, in so far as any money which has been deposited in a trust account, or any asset which has been deposited in a custody account, ensure that it is used only in respect of or in relation to contracts of a customer of the member; or in accordance with its business rules.CSD-3.8.4
Where a
licensed clearing house uses money and assets in contravention of Paragraph CSD-3.8.3, it shall:(a) In the case of money, repay the money to the trust account referred to in rule CSD-3.7.3 (b); or(b) In the case of assets:i. Return the asset to the custody account referred to in rule CSD-3.7.3 (b); orAmended: April 2016