Past version: Effective up to 25 Apr 2013
7.20.5.1 The government securities and Common Stocks (collectively, "Securities") accepted by Clearing House as margin shall be deposited with the appropriate custodian(s) designated by the Clearing House for safekeeping in a Clearing House account for House Contracts or in a Clearing House account for Customers' Contracts, as the case may be, and the Clearing House shall retain control over the Securities as a part of the margin of such Clearing Member.
7.20.5.2 The Clearing House shall not have any obligation or responsibility to preserve, protect, collect or realise, and under no circumstances shall the Clearing House be liable for any loss or diminution in value or depreciation in or in connection with, the Securities maintained pursuant to this rule.
7.20.5.3 A Clearing Member who maintains Securities with the Clearing House pursuant to this rule shall indemnify and hold the Clearing House harmless from any loss, damage, costs, charges and/or expenses of whatsoever nature and howsoever arising ("Loss") suffered or incurred by the Clearing House to any designated custodian which may result from or arise with respect to:
a. any act, delay or omission in connection with Securities (whether by such Clearing Member or the Clearing House) deposited with such designated custodian; or
b. any contract or agreement between the Clearing House and any designated custodian, or any representation, warranty or undertaking given by the Clearing House to any designated custodian, in relation to or otherwise in connection with Securities deposited with such designated custodian,
PROVIDED THAT this indemnity shall not cover any Loss and/or liability of the Clearing House attributable or referable to the gross negligence or wilful misconduct of the Clearing House or any of the Clearing House's officers, agents and/or employees.
7.20.5.4 Each Clearing Member shall pay the Clearing House for all fees, expenses, charges and costs incurred by the Clearing House in relation to its acceptance of Securities prescribed under this rule as the Clearing House may determine from time to time, and shall make such deposits of margins (in such form as may be acceptable to the Clearing House) as may be required by the Clearing House by reason of any depreciation in the market value of such Securities.
7.20.5.5 If a Clearing Member defaults in fulfilling its obligations to the Clearing House in accordance with the provisions of these Rules, the Securities maintained in the Clearing House's account may be disposed of, without notice, in any manner deemed appropriate by the Clearing House and the proceeds from the sale of the Securities deposited for the Customer Contracts shall be applied against the margin requirements or any other obligations of the Clearing Members' Customer Accounts, and the proceeds from the sale of Securities deposited for House Contracts shall be applied against the margin requirements or any other obligations of the House Account and then for Customers.
Added on 27 March 200627 March 2006.