8.2.2

CDP Clearing Rules

Rule 8 — Default Rules 8.2 Effect of Default on Novated Contracts other than in respect of Marginable Futures Contracts

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

(b) subject to Rule 8, the right to receive the relevant sale consideration from 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, and use the resulting proceeds of any force-sale to satisfy any liabilities that the Defaulting Clearing Member owes to CDP. Where any of those securities are not force-sold by the seventh (7th) Settlement Day after an Event of Default is declared under Rule 8.1.2:

(i) CDP shall, on the next Settlement Day, take the purchase consideration for those securities as a loss suffered by CDP due to the Clearing Member's default;

(ii) CDP shall thereafter have absolute discretion to deal with those securities as it deems appropriate;

(iii) any amount recovered by CDP shall be applied to make good any loss that was suffered by CDP due to the Clearing Member's default and that was not met by the Clearing Fund; and

(iv) any amount that remains thereafter shall be credited to the Clearing Fund in accordance with Rule 7.12.

CDP has no liability for any losses to the Defaulting Clearing Member arising from the force-sale or attempted force-sale of securities; 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 2009 23 January 2009, 22 April 2013 22 April 2013, 10 December 2018 10 December 2018 and 17 July 2019 17 July 2019.