| Rule Violation | Whether composition may be offered | Composition Amount which may be Offered by CDP, where CDP has Determined the Clearing Member to be Liable | Mandatory minimum penalty imposable by the DC | |||
| Rule Chapter/Number | Brief Description of Rule | 1st Violation | 2nd Violation | 3rd Violation | ||
| Rule 6B — Collateral | ||||||
| 6B.4 | Collateral Deposit | |||||
| 6B.4.1 | Clearing Member to deposit with CDP such Collateral, in such form and denomination as may be prescribed by CDP | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 6B.6 | Valuation of Collateral | |||||
| 6B.6.3 | Following revaluation of any Collateral, where such Collateral is found to be insufficient to meet any obligation of the Clearing Member, Clearing Member to deposit with CDP such additional Collateral as may be required to meet such obligation, within such tme as CDP may require | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 6B.7 | Investment and Use of Collateral | |||||
| 6B.7.1A | Clearing Member to secure contractual waivers in favour of the Clearing Member from its customers, waiving their rights to interest and investment earnings from Collateral held with CDP. | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 6B.7.2 | Clearing Member to ensure that all Collateral deposited with CDP are deposited on the basis that such Collateral shall be subject to the Clearing Rules, the Security Deed and the SFA, and that prior to depositing Collateral with CDP for the account or for the contracts of any person, such person has been notified of and has accepted that the Collateral is subject to the Clearing Rules, the Security Deed and the SFA. | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 6B.8 | Interest and Fees | |||||
| 6B.8.1 | Clearing Member to pay CDP such administrative fees as may be prescribed by CDP for the investment and management of the Collateral | Compoundable | $500 | $1,000 | $2,000 | N.A. |
| 6B.9 | Safekeeping Indemnity | |||||
| 6B.9.4 | If any loss of Collateral occurs, or any Collateral becomes unavailable to CDP such that any obligation of the Clearing Member cannot be fully met, Clearing Member to deposit with CDP such additional Collateral as may be required within such time as CDP may require | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
| 6B.10 | Regulatory Information | |||||
| 6B.10.1 | Clearing Member to provide CDP with information in relation to Collateral deposited with CDP for regulatory purposes | Compoundable | $2,000 – $4,000 | $4,000 – $7,000 | $7,000 – $10,000 | N.A. |
Added on 21 January 201321 January 2013 and amended on 22 April 201322 April 2013.