12A.4.1 The Depository may make an offer of composition to a Depository Agent if the Depository is of the opinion that there has been a violation of these CDP Rules, and the Rule violation is indicated in Schedule A as a compoundable Rule violation. The terms of the offer of composition include payment of a specified sum to the Depository and may include the fulfilment of any accompanying terms that the Depository may prescribe.

12A.4.2 Upon payment of the specified sum and fulfilment of the accompanying terms within the stipulated time, no further proceedings shall be taken against that Depository Agent for that Rule violation.

12A.4.3 Acceptance of the offer of composition by the Depository Agent amounts to an admission of liability and the Depository Agent will be deemed to have committed the conduct described in the offer of composition.

12A.4.4 The Depository retains the discretion to offer composition to a Depository Agent of an amount that is lower or higher than the guidelines that are indicated in Schedule A, except that the amount of composition that the Depository may offer shall not exceed $10,000 for each Rule violation.

12A.4.5 Notwithstanding that a Rule violation is indicated as being compoundable under Schedule A, the Depository retains the discretion not to make an offer of composition to the Depository Agent and instead, to charge the Depository Agent before the Disciplinary Committee.

12A.4.6 If the Depository has made an offer of composition, it will not commence disciplinary proceedings against a Depository Agent until after the stipulated period for the offer lapses.

12A.4.7 If the Depository Agent does not accept the offer of composition or comply with the terms of the composition within the stipulated time as prescribed by the Depository, the Depository may charge the Depository Agent before the Disciplinary Committee.

12A.4.8 For the purposes of determining whether a Rule violation is classified as a first, second, third or subsequent offence under Schedule A, only previous violations under the same Rule will be taken into consideration.