3.9.1 Qualification Procedures
In order to qualify a Trading Member, a Clearing Member shall:—
(1) inform CDP of such qualification of the Trading Member, and if CDP requests, such details of the Trading Member as CDP may from time to time specify;
(2) pay such administrative fee as CDP may from time to time levy for the processing of such applications;
(3) satisfy CDP that it has in place adequate internal control measures and risk management systems, including automated pre-execution credit control checks, to monitor the Trading Member's Exchange Trades and manage its risk exposure to such Exchange Trades;
(4) enter into a written agreement with the Trading Member setting out the terms and conditions governing their relationship, which shall include without limitation, risk management provisions such as the right to impose trading limits on the Trading Member; and
(5) undertake to inform CDP if it has knowledge or has reasons to believe that a Trading Member qualified by it has defaulted or may default in any of its obligations under the Exchange Trades transacted by the Trading Member; and
(6) have processes in place to minimise and manage any conflicts of interest, including but not limited to separating its front office and back office functions.
Amended on 18 September 201218 September 2012.
3.9.2 Procedures to Cease Qualifying a Trading Member
If a Clearing Member wishes to cease qualifying its Trading Member, it shall:—
(1) give not less than 30 days' written notice (or such shorter period as CDP may from time to time deem acceptable) to CDP of its intention to cease qualifying that Trading Member and the proposed date of cessation, provided always that CDP may waive such notice requirement at any time with respect to any Clearing Member;
(2) satisfy CDP that it has taken before the proposed date of cessation proper steps to disable the Trading Member from entering into Exchange Trades to be qualified by the Clearing Member;
(3) satisfy CDP that it has taken, or will take, proper steps for the orderly clearing and settlement of the Trading Member's Exchange Trades;
(4) comply with any reasonable direction of CDP in relation to the orderly cessation of the qualification of the Trading Member's Exchange Trades; and
(5) take such steps including without limitation, procedural steps (whether of a technical or non-technical nature or otherwise) as CDP may deem appropriate to ensure that none of the Trading Member's Exchange Trade will be cleared and settled through the Clearing Member by the proposed date of cessation.
Amended on 11 January 201111 January 2011
3.9.2A Procedures to Suspend Qualification of a Trading Member
(1) If a Clearing Member wishes to suspend its qualification of a Trading Member, it shall:—
(a) notify CDP of its decision to suspend its qualification of that Trading Member; and
(b) comply with any reasonable direction of CDP in relation to the suspension of the qualification of the Trading Member's Exchange Trades.
(2) A Clearing Member may suspend its qualification of a Trading Member for not more than 30 days. Before the end of the 30-day period, the Clearing Member must notify CDP in writing of its intention to either resume qualification or cease qualification of the Trading Member. Where the Clearing Member intends to cease qualification of the Trading Member, Rule 3.9.2 shall apply.
Added on 11 January 201111 January 2011
3.9.3
Notwithstanding the cessation or suspension of the qualification, the Clearing Member shall clear and settle all the Exchange Trades of the Trading Member which are done right up to the point when the Trading Member has been disabled from entering Exchange Trades to be qualified by the Clearing Member.
Amended on 11 January 201111 January 2011