Rule 2 Settlement Participation

2.1 Use of Settlement Facilities

2.1.1

Settlement Participants have the right to utilise the settlement facilities operated by CDP under these Rules.

Added on 10 December 2018 10 December 2018.

Nothing in these Rules shall prevent CDP from permitting any other person, not being a Settlement Participant, to utilise CDP's settlement facility(ies) and/or system(s) on terms as may be determined by CDP.

Added on 10 December 2018 10 December 2018.

2.2 Compliance

2.2.1

A Settlement Participant shall at all times comply with the Rules and any other conditions or restrictions imposed by CDP from time to time.

Added on 10 December 2018 10 December 2018.

2.3 Payment of Fees

2.3.1

Each Settlement Participant will pay to CDP such fees and charges for the settlement of transactions based on CDP's fee schedules from time to time, and such fines and default interest as may be imposed by CDP from time to time.

Added on 10 December 2018 10 December 2018.

2.4 Systems and Operations

2.4.1

A Settlement Participant must ensure that:

(a) its systems and connections to the CDP's settlement system and facilities operate properly at all times and have adequate redundancy and scalable capacity to accommodate current and anticipated settlement volumes; and

(b) it complies with the terms and conditions in any agreement with, and any other requirements imposed by, CDP for accessing CDP's settlement system and facilities or in relation to settlement under these Rules.

Added on 10 December 2018 10 December 2018.

2.5 Business Continuity Requirements

2.5.1

Settlement Participants must at all times have in place and maintain disaster recovery and business continuity arrangements that are adequate to ensure the timely recovery of its usual operations having regard to the nature and extent of the business carried on by that Settlement Participant and any matters as may be specified by CDP from time to time. CDP may at any time require a Settlement Participant to undertake testing of its disaster recovery and business continuity arrangements at such times and in such manner as may be specified by CDP.

Added on 10 December 2018 10 December 2018.

2.6 Settlement Participants to Reconcile Records

2.6.1

Each Settlement Participant shall, on a daily basis, reconcile its books with CDP's records, in relation (but not limited) to:

(a) all Settlement Instructions that are settled in each settlement run, including the money and securities settled in respect of each Settlement Instruction;

(b) transfers of money and securities into or out of, and the daily closing balance in, the Settlement Participant's Cash Ledger Accounts and Securities Account(s);

If any discrepancy between CDP's and the Settlement Participant's records is noted, the Settlement Participant must inform CDP and if required rectify the discrepancy immediately.

Added on 10 December 2018 10 December 2018.

2.7 Reporting of Adverse Events

2.7.1

A Settlement Participant shall immediately notify CDP if:

(a) it is experiencing an emergency or potentially debilitating situation that threatens its operations, including but not limited to a cyber threat or terror attack;

(b) it is insolvent or wound-up, or has had an insolvency or winding-up application presented, or an order made by a court of competent jurisdiction, or any step is taken or a resolution passed, for its winding-up, dissolution, judicial management or administration; or

(c) it has had any attachment, distress, execution or legal process instituted against its assets, or has had any liquidator, receiver or any similar person appointed (or an application has been made for the appointment of such person) in respect of any of its assets.

Added on 10 December 2018 10 December 2018.

2.8 Suspension or Restriction of a Settlement Participant

2.8.1

CDP may, in its discretion, suspend the settlement of or cancel all or any of a Settlement Participant's Settlement Instructions and/or suspend or restrict the Settlement Participant's participation in settlement if:

(a) the Settlement Participant fails to comply with or is, in the opinion of CDP, in breach of any provision of these Rules or of any agreement, understanding or arrangement which the Settlement Participant has from time to time with CDP;

(b) the Settlement Participant ceases to be, or is suspended in its capacity as, a Clearing Member or Depository Agent;

(c) the Settlement Participant breaches any term, condition or restriction imposed by CDP pursuant to its powers under these Rules;

(d) the Settlement Participant is wound-up;

(e) the Settlement Participant is, in CDP's opinion, in financial or operating difficulty, including but not limited to not meeting cash calls or settlement requirements, being insolvent or being put in judicial management or administration;

(f) the Settlement Participant is, in CDP's opinion, conducting its activities in a manner detrimental to the financial integrity, reputation or interests of CDP, or clearing or settlement facilities established or operated by CDP;

(g) the Settlement Participant is, in CDP's opinion based on the Authority's guidelines on fit and proper criteria, no longer fit and proper to continue participating in settlement;

(h) it is necessary or desirable in the interests of ensuring a safe and efficient settlement facility, or for ensuring the integrity of the market or for proper management of systemic risk, or for investor protection, or it is directed by any authority; or

(i) an Event of Default as set out under the CDP Clearing Rules has occurred in respect of the Settlement Participant who is also a Clearing Member.

Added on 10 December 2018 10 December 2018.

2.8.2

A Settlement Participant that is suspended shall not have any of the privileges of a Settlement Participant during the period of its suspension. A suspended Settlement Participant may be reinstated upon such conditions as CDP may impose.

A Settlement Participant whose settlement activities are restricted by CDP shall have its settlement privileges restricted, as may be specified by CDP during the period of restriction. Failure of the Settlement Participant to comply with any restriction will constitute a breach of this Rule.

Added on 10 December 2018 10 December 2018.

2.8.3

Unless otherwise decided by CDP, a Settlement Participant who is suspended or whose settlement privileges are restricted by CDP continues to be liable to settle any and all Settlement Instructions that are submitted by itself or on its behalf, and continues to be bound by these Rules.

Added on 10 December 2018 10 December 2018.

2.8.4

CDP may notify SGX-ST or any other Exchange of any action or proceedings taken against a Settlement Participant.

Added on 10 December 2018 10 December 2018.

2.8.5

When a Settlement Participant has been suspended or when its settlement activities have been restricted, CDP may designate itself or one or more other Settlement Participants to deal with any Settlement Instructions of the suspended or restricted Settlement Participant in accordance with CDP's direction, and/or require one or more Settlement Participants to assist CDP in the settlement of Settlement Instructions where CDP considers such assistance necessary to facilitate the operation of a safe and efficient settlement system. The relevant Settlement Participant(s) shall render such assistance as CDP may require.

Added on 10 December 2018 10 December 2018.

(b) pay all outstanding charges owing to CDP as at the effective date of resignation;

(c) fulfill all outstanding obligations to CDP; and

(d) until its resignation is effective, continue to comply with these Rules.

Added on 10 December 2018 10 December 2018.

2.11 Disciplinary Action

2.11.1

If CDP is of the opinion that a Settlement Participant has breached any of these Rules, CDP may, in addition to any right to take action under Rule 2.8:

(a) issue a letter of warning to the Settlement Participant; or

(b) impose a penalty, as set out in Schedule A, on the Settlement Participant.

Added on 10 December 2018 10 December 2018.