• 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 the licensed clearing house, the licensed 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 the licensed 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 the licensed clearing house, if the licensed 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 any market contract; and
      (b) The failure to use the money or assets to meet the obligations of the member may jeopardize the financial integrity of the licensed 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 2016

    • CSD-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); or
      ii. If the asset cannot be returned to the custody account, deposit an amount of money which is equivalent to the monetary value of the asset at the time of the contravention of rule CSD-3.7.3 (b) in a trust account referred to in rule CSD-3.7.3 (b) for the benefit of the customers of the member.
      Amended: April 2016