8.6B Application of Collateral
Without prejudice and subject to the other provisions of these Clearing Rules, in particular Rule 7.9.1:(1) where a Clearing Member has failed promptly to discharge any of its obligations to CDP, CDP may apply Collateral, including without limitation letters of credit procured by the Clearing Member to be issued to CDP, deposited or provided by the Clearing Member, except where such margins or other Collateral were deposited solely in relation to a Customer Account;(2) notwithstanding Rule 8.6B.1(1), where a Clearing Member has failed promptly to discharge any of its obligations to CDP, and CDP has reasonable grounds for forming an opinion that the failure is directly attributable to the failure of any Customer Account holder to meet its obligations, CDP may apply:(a) margins or other Collateral, (including without limitation letters of credit procured by the Clearing Member to be issued to CDP) deposited or provided by the Clearing Member solely in relation to Customer Accounts provided that the conditions in the SFA are satisfied; and(b) any qualifying letters of credit deposited with or provided to CDP by a Trading Member sponsored by the Clearing Member, provided that the Clearing Member's default is attributable to such Trading Member's act or omission.
In exercising its powers under Rule 8.6B.1, CDP may liquidate any non-cash Collateral deposited with it by a Clearing Member. Such Clearing Member shall be liable to CDP for any costs and expenses incurred in connection with the liquidation. CDP shall not be liable for any losses to any person arising from such liquidation.
The Clearing Member shall not take any action or do anything that will directly or indirectly interfere with, prohibit, restrict or inhibit the ability of CDP to so apply such Contributions, margins or other Collateral and CDP shall, except where it has acted in bad faith, be under no liability to the Clearing Member or any other person whatsoever in so applying such Contributions, margins or other Collateral and the Clearing Member shall fully indemnify and keep indemnified CDP and hold CDP harmless against any such liability.
Where the Clearing Member has failed to settle its financial obligations to SGX-DC, CDP shall be entitled to retain any Collateral deposited or provided by the Clearing Member which have not been utilised pursuant to this Rule 8.6B, except where such Collateral were deposited with or provided to CDP solely in relation to Customer Accounts.