3.7A Relationship Between Clearing Member and Trading Member
3.7A.1 Settlement Timelines
Unless the Trading Member has in place arrangements to settle Exchange Trades with its Clearing Member on a delivery-versus-payment basis through the CDP Settlement Facility, the Clearing Member must make payment (whether of sale proceeds, Cash Settlement Amounts, corporate action entitlements or compensation for corporate action entitlements) or deliver securities to a Trading Member in respect of any Exchange Trade, by such time as to enable payment or delivery by the Trading Member to the Trading Member's customers within any timelines specified in the SGX-ST Rules, save that a Clearing Member may:(1) withhold payment of sale proceeds to a selling Trading Member until the selling Trading Member has made delivery of securities; and(2) withhold delivery of securities or the payment of any Cash Settlement Amount, corporate action entitlements or compensation for corporate action entitlements to a buying Trading Member until payment by the buying Trading Member has been received.
3.7A.2 Force Sale
Subject to Rules 3.7A.3 and 3.7A.4, if a buying Trading Member fails to meet any of the timelines set out in the SGX-ST Rules for payment to its Clearing Member, the Clearing Member shall force-sell the securities of the buying Trading Member on the following Market Day.
Rule 3.7A.2 does not apply if the Clearing Member has allowed the buying Trading Member to effect a corresponding sale position after the purchase but not later than the Intended Settlement Day of the Exchange Trade for such purchase.
If the Clearing Member reasonably expects full payment from the buying Trading Member, the Clearing Member may defer force-sale for up to two Market Days.
A Clearing Member exercising its discretion under Rule 3.7A.4 must not engage in imprudent credit practices.
The following rules apply to all force-sales by a Clearing Member:(1) The Clearing Member has discretion as to the price and volume put up for sale, at any time;(2) The Clearing Member need not give notice of the force-sale to the Trading Member;(3) The Clearing Member is not liable to the Trading Member for any loss or damage arising out of the exercise of its discretion; and(4) The Clearing Member may recover the losses and expenses incurred in the force-sale from the Trading Member.