Past version: Effective from 10 Dec 2018 to 16 Jul 2019
Immediately upon such breach under Rule 8.1.2:—
(1) each Novated Contract for the purchase of securities between CDP and the Defaulting Clearing Member in relation to a Customer Account and any right of the Defaulting Clearing Member to receive compensation for corporate action entitlement under Rule 6.5.4(2) in respect of that Novated Contract shall be terminated. In respect of each such Novated Contract, a new contract (the "New Purchase Contract") shall be deemed to have been made between CDP and the relevant buying customer of the Defaulting Clearing Member, pursuant to which the buying customer shall have:
(a) the obligation to pay the relevant purchase consideration to CDP; and
(b) subject to Rule 8, the right to receive the relevant securities and any compensation for corporate action entitlement under Rule 6.5.4(2) as applicable from CDP;
(2) each Novated Contract for the sale of securities between CDP and the Defaulting Clearing Member in relation to a Customer Account and any obligation of the Defaulting Clearing Member to make compensation for corporate action entitlement under Rule 6.5.4(1) in respect of that Novated Contract shall be terminated. In respect of each such Novated Contract, a new contract (the "New Sale Contract") shall be deemed to have been made between CDP and the relevant selling customer of the Defaulting Clearing Member, pursuant to which the selling customer shall have:
(a) the obligation to deliver the relevant securities and to make any compensation for corporate action entitlement under Rule 6.5.4(1) as applicable to CDP; and
(3) in respect of Novated Contracts between CDP and the Defaulting Clearing Member in relation to a House Account:
(a) CDP shall be entitled (but not obliged) to set-off any or all Novated Contracts for the sale of a security against any or all Novated Contracts for the purchase of that security, regardless of the Intended Settlement Days for such Novated Contracts;
(b) CDP shall be entitled (but not obliged) to force-sell any or all securities that would have been due from CDP to the Defaulting Clearing Member but for its default at such time and price as CDP may determine. CDP has no liability for any losses to the Defaulting Clearing Member arising from the force-sale of securities. The resulting proceeds of such force-sale shall be held by CDP as Collateral and applied in accordance with these Clearing Rules and the Security Deed; and
(c) any securities due from the Defaulting Clearing Member to CDP regardless of the Intended Settlement Days and if not set-off pursuant to Rule 8.2.2(3)(a) shall be settled in accordance with these Clearing Rules on such day as CDP may determine.
Subject as otherwise provided in these Clearing Rules, the terms of each New Purchase Contract and New Sale Contract shall be on the same terms as its corresponding Novated Contract. For the avoidance of doubt, the termination of each Novated Contract shall be without prejudice to any of the rights or remedies of CDP thereunder and CDP's right to damages in respect of any breach (whether antecedent or otherwise) under each Novated Contract shall not be extinguished.
Amended on 23 January 200923 January 2009, 22 April 201322 April 2013 and 10 December 201810 December 2018.