CSD-4.2 CSD-4.2 Content of Rules of Licensed Clearing Houses and Licensed Central Depositories
CSD-4.2.1
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licensed clearing house andlicensed central depository shall, in line with CBB Law, make provision in itsbusiness rules and to the satisfaction of the CBB for:(a) Continuing requirements for each member, including requirements:(i) Relating to the proper conduct of the member or depository participant when participating in any clearing or central depository facility operated by thelicensed clearing house orlicensed central depository ;(ii) That the member has sufficient financial resources (capital adequacy) to reasonably fulfil all its financial obligations arising out of its activities of any clearing or central depository facility operated by thelicensed clearing house orlicensed central depository ;(iii) That facilitate the monitoring by thelicensed clearing house orlicensed central depository of the compliance of themember ordepository participant with thebusiness rules of thelicensed clearing house orlicensed central depository ; or(iv) That provide for the expulsion, suspension or disciplining of themember ordepository participant for a contravention of thebusiness rules of thelicensed clearing house orlicensed central depository ;(b) The class or classes of transactions that may be cleared, settled, or deposited on any facility that it operates;(c) Matters relating to risks in the operation of any clearing or central depository facility that it operates;(d) The handling of defaults, including the financial resources available to support the default of a member or depository participant, and the taking of proceedings or any other action against a member or depository participant which has failed, or appears to be unable, or is likely to become unable, to meet the member's or depository participant's obligations for all unsettled or openmarket contracts to which themember ordepository participant is a party;(e) The carrying on of business of thelicensed clearing house orlicensed central depository with due regard to the interests and protection of the investing public.(f) The granting of security interests to theclearing house orcentral depository or to othermembers ordepository participants pursuant to the business rules, including a decertification of the collateral charged and the obligations secured;(g) Thedefault rules which provide for the taking of proceeding or other action if amember ordepository participant appears to be unable, or likely to become unable to meet his obligations in respect of all unsettled or openmarket contracts to which he is a party;(h) The rules and procedures governing how losses will be shared in the event that a defaulting firm's collateral fails to cover its exposure, including the maintenance and utilization of the Settlement Guarantee Fund; and(i) The legal relationships between thecentral depository and eachdepository participant, and betweenmembers ordepository participants , inter se.Amended: April 2016CSD-4.2.2
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licensed clearing house orlicensed central depository shall not make any amendment to itsbusiness rules, unless it complies with such requirements as the CBB may prescribe.Amended: April 2016