Rule 6 — Clearing and Settlement between Clearing Members and CDP

6.1 Clearing of Exchange Trades

6.1.1

All Exchange Trades shall be cleared and settled with CDP in accordance with these Clearing Rules.

Amended on 23 January 2009 23 January 2009 and 10 December 2018 10 December 2018.

6.1.2

Only Clearing Members shall be permitted to clear and settle Exchange Trades with CDP.

Amended on 10 December 2018 10 December 2018.

6.1.3 [Rule has been deleted.]

Deleted on 10 December 2018 10 December 2018.

6.1.4 [Rule has been deleted.]

Deleted on 10 December 2018 10 December 2018.

6.2 Clearing and Novation

Amended on 10 December 2018 10 December 2018.

Subject to Rule 6.2.1A, when a transaction between 2 SGX-ST Trading Members is matched on the Trading System, or is reported to SGX-ST pursuant to the SGX-ST Rules on "Direct Business", or is otherwise accepted for clearing by the CDP, the following occurs:—

(1) Where the 2 SGX-ST Trading Members are both Clearing Members, the transaction shall be novated to CDP and Rules 6.2.2, 6.2.3 and 6.2.4 will apply.

(2) Where 1 of the 2 SGX-ST Trading Members is a Trading only Member, the Clearing Member who has qualified the Trading Member shall, as against the Trading Member, assume the rights, duties and obligations of the counterparty SGX-ST Trading Member to the transaction; i.e. the Clearing Member who has qualified the Trading Member shall become the buyer or seller, as the case may be, to the Trading Member. As against the counterparty SGX-ST Trading Member, the Clearing Member who has qualified the Trading Member shall assume the rights, duties and obligations of the Trading Member and the transaction shall thereupon be novated to CDP and Rules 6.2.2, 6.2.3 and 6.2.4 shall apply. Thus, for example:— A, a Trading Member, contracts to buy 1,000 shares and the trade is matched on the Trading System with B, a Clearing Member. The Clearing Member who has qualified A is C. Immediately upon the matching of the trade on the Trading System, the following occurs:—

(a) A's obligation to pay the purchase consideration for 1,000 shares to B is replaced by A's obligation to pay the purchase consideration for 1,000 shares to C and A's right to receive 1,000 shares from B is replaced by A's right to receive 1,000 shares from C.

(b) B's obligation to deliver 1,000 shares to A is replaced by B's obligation to deliver 1,000 shares to C and B's right to receive the purchase consideration for 1000 shares from A is replaced by B's right to receive the purchase consideration for 1,000 shares from C.

(c) C assumes A's obligation to pay the purchase consideration for 1,000 shares to B and acquires the corresponding right to receive 1,000 shares from B.

Thereafter, the transaction between C and B is novated to CDP so that:—

(d) C's obligation to pay the purchase consideration for 1,000 shares to B is replaced by C's obligation to pay the same to CDP; and the corresponding right of C to receive the 1,000 shares from B is replaced by the right of C to receive the 1,000 shares from CDP; and

(e) B's obligation to deliver 1,000 shares to C is replaced by B's obligation to deliver the same to CDP; and the corresponding right of B to receive the purchase consideration for the 1,000 shares from C is replaced by the right of B to receive the purchase consideration from CDP.

(3) Where the 2 SGX-ST Trading Members are Trading only Members, the Clearing Members who have qualified the Trading Members respectively shall assume the rights, duties and obligations of the Trading Members to each other and as against the Trading Member which they have respectively qualified, they shall assume the rights, duties and obligations of the counterparty SGX-ST Trading Member to the transaction. Thereafter the transaction shall be novated to CDP and Rules 6.2.2, 6.2.3 and 6.2.4 will apply. Thus, for example:—

A, a Trading only Member, contracts to buy 1,000 shares and the trade is matched on the Trading System with B, a Trading only Member. The Clearing Member who has qualified A is C. The Clearing Member who has qualified B is D. Immediately upon the matching of the trade on the Trading System, the following occurs:—

(a) A's obligation to pay the purchase consideration for 1,000 shares to B is replaced by A's obligation to pay the purchase consideration for 1,000 shares to C and A's right to receive 1,000 shares from B is replaced by A's right to receive 1,000 shares from C.

(b) B's obligation to deliver 1,000 shares to A is replaced by B's obligation to deliver 1,000 shares to D and B's right to receive the purchase consideration for 1,000 shares from A is replaced by B's right to receive the purchase consideration for 1,000 shares from D.

(c) C assumes A's obligation to pay the purchase consideration for 1,000 shares to D and acquires the corresponding right to receive 1,000 shares from D.

(d) D assumes B's obligation to deliver 1,000 shares to C and acquires the corresponding right to receive the purchase consideration for 1,000 shares from C.

Thereafter, the transactions between C and D are novated to CDP so that:—

(e) C's obligation to pay the purchase consideration for 1,000 shares to D is replaced by C's obligation to pay the same to CDP; and the corresponding right of C to receive 1,000 shares from D is replaced by the right of C to receive 1,000 shares from CDP; and

(f) D's obligation to deliver 1,000 shares to C is replaced by D's obligation to deliver the same to CDP; and the corresponding right of D to receive the purchase consideration for 1,000 shares from C is replaced by the right of D to receive the purchase consideration for 1,000 shares from CDP.

Amended on 3 April 2008 3 April 2008, 23 January 2009 23 January 2009 and 10 December 2018 10 December 2018 .

6.2.1A

For transactions in Marginable Futures Contracts between 2 SGX-ST Trading Members which are reported to SGX-ST pursuant to the SGX-ST Rules on "Direct Business", novation under Rules 6.2.1(1)–(3) shall take place only upon:

(a) where both Clearing Members receive margin call pursuant to the first margin cycle run following the reporting of the trade, the later in time Confirmation by the Clearing Members' Settlement Bank(s) of the Payment Instructions in respect of the margin calls; or

(b) where only one Clearing Member receives margin call pursuant to the first margin cycle run following the reporting of the trade, Confirmation by that Clearing Member's Settlement Bank of the Payment Instruction in respect of that margin call; or

(c) where neither Clearing Member receives margin call pursuant to the first margin cycle run following the reporting of the trade, the end of that margin cycle.

Added on 23 January 2009 23 January 2009. Amended on 26 April 2013 26 April 2013.

6.2.2

Upon novation of an Exchange Trade to CDP:—

(1)

(a) the obligation of the buying Clearing Member to pay the purchase consideration to the selling Clearing Member is replaced by the obligation of the buying Clearing Member to pay the purchase consideration to CDP; and

(b) the right of the buying Clearing Member to receive the securities from the selling Clearing Member is replaced by the right of the buying Clearing Member to receive the securities from CDP; and

(2)

(a) the obligation of the selling Clearing Member to deliver the securities to the buying Clearing Member is replaced by the obligation of the selling Clearing Member to deliver the securities to CDP; and

(b) the right of the selling Clearing Member to receive the sale consideration from the buying Clearing Member is replaced by the right of the selling Clearing Member to receive the sale consideration from CDP.

6.2.3

The obligations and rights in respect of the Novated Contracts:—

(1) between the buying Clearing Member and CDP; and

(2) between the selling Clearing Member and CDP,

are owed by and to the parties as principals to each other notwithstanding that the buying and selling Clearing Members may have acted as agents for their respective customers in executing or clearing and settling the relevant Exchange Trade.

Amended on 23 January 2009 23 January 2009 and 10 December 2018 10 December 2018.

6.2.4

Subject as otherwise provided in these Clearing Rules the terms of the Novated Contracts shall be on the same terms as the relevant Exchange Trade replaced by such Novated Contracts.

Amended on 23 January 2009 23 January 2009.

6.2A Obligations under Novated Contracts

6.2A.1

Save as provided in these Clearing Rules, the obligations in respect of a Novated Contract are due for settlement as follows:

(1) The obligation to make payment for securities and the obligation to deliver securities are due for settlement on the Intended Settlement Day of the Novated Contract and on each Settlement Day thereafter until they are fully settled, save that the obligation to make payment for securities is not due until:

(a) those securities have been made available for delivery in accordance with the CDP Settlement Rules; or

(b) the right to receive those securities is cash settled pursuant to these Clearing Rules.

(2) The obligation to make compensation for corporate action entitlements pursuant to Rule 6.5.4 is due for settlement on such day as CDP shall specify and on each Settlement Day thereafter until they are fully settled.

Refer to Regulatory Notice 6.5.

Added on 10 December 2018 and Amended on 6 September 2021.

6.3 Set-Off of Payment Obligations in respect of Novated Contracts and Determination of Payment Obligations between CDP and Clearing Members

Amended on 10 December 2018 10 December 2018.

6.3.1

A Clearing Member's obligation to make payment to and right to receive payment from CDP in respect of Novated Contracts (including any obligation or right to pay or receive a Cash Settlement Amount or to make or receive compensation of corporate action entitlements as provided in these Clearing Rules) shall be settled by net payment in accordance with these Clearing Rules.

Amended on 23 January 2009 23 January 2009 and 10 December 2018 10 December 2018.

6.3.2

A Clearing Member's obligation to make payment and its entitlement to receive payment in respect of Novated Contracts on any Settlement Day shall be set off for each settlement currency.

The resultant net amount shall be known as the "Final Settlement Balance" for that Settlement Day and currency.

Amended on 23 January 2009 23 January 2009, 25 February 2011 25 February 2011, 26 April 2013 26 April 2013 and 10 December 2018 10 December 2018.

6.3.2A

(1) On each Settlement Day, CDP shall make available to each Clearing Member, a record of the Novated Contracts and the rights and obligations in respect of those Novated Contracts to be settled with CDP (including any obligation or right to pay or receive a Cash Settlement Amount or to make or receive compensation for corporate action entitlements as provided in these Clearing Rules), the Clearing Member's Final Settlement Balance(s), and the status of settlement.

(2) Save for manifest error, the record shall be binding and conclusive on the Clearing Member as to the Novated Contracts to be settled between the Clearing Member and CDP, the details and rights and obligations in respect of such Novated Contracts, the Clearing Member's Final Settlement Balance(s) and the status of settlement.

(3) Notwithstanding any manifest error in the record or any dispute as to the contents stated in the record, payment of each Final Settlement Balance shall be made by or to a Clearing Member in accordance with Rule 6.4. Any moneys to be refunded or deducted shall be refunded or deducted free of interest as soon as practicable after the dispute is resolved.

Added on 10 December 2018 and Amended on 6 September 2021.

6.3.3 [Rule has been deleted.]

Deleted on 10 December 2018 10 December 2018.

6.4 Settlement of Payment Obligations Between Clearing Members and CDP

6.4.1

(1) Unless otherwise notified by CDP to the Clearing Members, settlement of the Final Settlement Balance for each Settlement Day between a Clearing Member and CDP shall, subject to (2), be effected and final upon the execution of all settlement instructions submitted by CDP under the CDP Settlement Rules for settlement between CDP and that Clearing Member in respect of Novated Contracts, in that settlement currency, and which are due to settle on that Settlement Day.

(2) A settlement instruction, if not executed only by reason of there being insufficient securities available, shall not be taken into account for the purposes of (1).

(3) Failure by a Clearing Member to settle a Final Settlement Balance for a Settlement Day, on that Settlement Day, shall constitute a breach by the Clearing Member of these Clearing Rules.

Amended on 25 February 2011 25 February 2011, 26 April 2013 26 April 2013 and 10 December 2018 10 December 2018.

6.4.1A [Rule has been deleted.]

Deleted on 10 December 2018 10 December 2018.

6.4.2 [Rule has been deleted.]

Deleted on 10 December 2018 10 December 2018.

6.4.3 [Rule has been deleted.]

Deleted on 10 December 2018 10 December 2018.

6.4.4

CDP shall be entitled to charge interest on any amount owing to CDP which is not settled when due, at such rate as may be determined by CDP.

Amended on 25 February 2011 25 February 2011 and 10 December 2018 10 December 2018.

6.4.5

Settlement of transactions between Clearing Members and CDP shall be in the currency as determined by CDP.

Added on 10 December 2018 10 December 2018.

6.5 Settlement of Securities in respect of Novated Contracts

Amended on 10 December 2018 10 December 2018.

6.5.1

Settlement of a Clearing Member's right on any Settlement Day to receive securities in respect of Novated Contracts (including any right to receive securities as compensation for corporate action entitlements as provided in these Clearing Rules) shall be effected and final upon CDP crediting such securities into the Clearing Member's Clearing Account.

Amended on 3 April 2008 3 April 2008, 1 July 2008 1 July 2008, 23 January 2009 23 January 2009, 26 April 2013 26 April 2013 and 10 December 2018 10 December 2018.

6.5.1A [Rule has been deleted.]

Deleted on 10 December 2018 10 December 2018.

6.5.1B

On any Settlement Day, if and to the extent that the securities available to CDP are insufficient for CDP to settle its delivery obligations in respect of Novated Contracts that are due for settlement on that Settlement Day, CDP may:

(1) defer any of those delivery obligations, in whole or in part, for settlement on the next Settlement Day; or

(2) cash settle any of those delivery obligations, in whole or in part.

Refer to Practice Note 6.5.1B(2), 6.6.2, 6.7.11 and 8.2.2(3E) and Practice Note 6.5.1B(2).

Added on 10 December 2018 and Amended on 6 September 2021.

6.5.2

(1) Settlement of a Clearing Member's obligation on any Settlement Day to deliver securities in respect of Novated Contracts (including any obligation to deliver securities as compensation for corporate action entitlements as provided in these Clearing Rules) shall be effected and final upon CDP debiting such securities from the Clearing Member's Clearing Account.

(2) Failure by a Clearing Member to deliver securities when due shall subject the Clearing Member to Rule 6.7A.

Amended on 3 April 2008 3 April 2008, 23 January 2009 23 January 2009, 20 November 2009 20 November 2009,26 April 2013 26 April 2013 and 10 December 2018 10 December 2018.

6.5.2A

A Clearing Member shall ensure that the securities required to meet its delivery obligation in respect of Novated Contracts are made available in such manner and by such time as provided in the CDP Settlement Rules to enable the delivery of those securities on the Settlement Day that the obligation is due. Failure by a Clearing Member to comply with this Rule 6.5.2A shall subject the Clearing Member to Rule 6.7.

Added on 20 November 2009 20 November 2009 and amended on 26 April 2013 26 April 2013 and 10 December 2018 10 December 2018.

6.5.2B [Rule has been deleted.]

Deleted on 10 December 2018 10 December 2018.

6.5.2C [Rule has been deleted.]

Deleted on 10 December 2018 10 December 2018.

6.5.3 [Rule has been deleted.]

Deleted on 10 December 2018 10 December 2018.

6.5.4

Subject to Rule 6.5.5:

(1) A Clearing Member that is due to, but does not, deliver securities in respect of Novated Contracts is liable to compensate CDP for corporate action entitlements that accrue on those securities and that a recipient of those securities would have been entitled to receive but for the delivery failure.

(2) A Clearing Member that is due to, but does not receive securities in respect of Novated Contracts is entitled to be compensated by CDP for corporate action entitlements that accrue on those securities and that a recipient of those securities would have been entitled to receive but for the delivery failure.

Added on 10 December 2018 10 December 2018.

6.5.5

Rule 6.5.4 applies only to such types of corporate action entitlements that CDP shall from time to time notify.

Refer to Regulatory Notice 6.5.

Added on 10 December 2018 10 December 2018.

6.5.6

(1) Any compensation under Rule 6.5.4 shall be made in such form and value, and be due by such time, as CDP shall specify.

(2) Where CDP requires any action by a Clearing Member to effect such compensation, the Clearing Member shall do so, and shall obtain all necessary authorisation from its Customer to enable it to do so, by such time as CDP shall specify.

Refer to Regulatory Notice 6.5.

Added on 10 December 2018 10 December 2018.

6.6 CDP'S Obligations in respect of Novated Contracts

Amended on 10 December 2018 10 December 2018.

6.6.1

If and to the extent that the funds or assets available to CDP are insufficient, either in aggregate or in respect of in any settlement currency, to meet CDP's obligations to Clearing Members in respect of Novated Contracts, CDP may upon notice to the relevant Clearing Members defer any of those obligations, in whole or in part, for settlement at such later time as CDP may determine.

Amended on 23 January 2009 23 January 2009, 22 April 2013 22 April 2013 and 10 December 2018 10 December 2018.

6.6.2

Without prejudice to Rule 6.5.1B, if and to the extent that CDP determines that it is not or may not be possible or reasonably practicable to deliver securities in respect of a Novated Contract, CDP may cash settle its obligation to deliver securities, in whole or in part.

Refer to Practice Note 6.5.1B(2), 6.6.2, 6.7.11 and 8.2.2(3E).

Amended on 23 January 2009, 22 April 2013, 10 December 2018 and 6 September 2021.

6.6.3

Without prejudice to Rule 8, CDP will be under no obligation to deliver securities to a Clearing Member in respect of any Novated Contract if the Clearing Member fails to settle any Final Settlement Balance in full, save that where partial payment of the Final Settlement Balance is made, CDP may, but is not obliged to, deliver some of the securities that it would otherwise have been obliged to deliver but for the Clearing Member's failure.

Added on 22 April 2013 22 April 2013 and amended on 10 December 2018 10 December 2018.

6.6.4

Where CDP deems it necessary or desirable for ensuring a fair and orderly market or for ensuring a safe and efficient clearing and/or settlement facility, or for ensuring the integrity of the market or for proper management of systemic risk in the market, CDP may replace an obligation to pay a Final Settlement Balance for a currency with an obligation to pay the Final Settlement Balance in a different currency, at such rate as CDP may determine.

Added on 10 December 2018 10 December 2018.

6.6A [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6.6A.1 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6.6A.2 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6.6A.3 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6.7 Buying-In, Procurement and Cash Settlement

Amended on 20 November 2009 20 November 2009 and 10 December 2018 10 December 2018.

6.7.1 Terminology

For clarity under Rules 6.7 and 6.7A:—

"short Clearing Member" refers to the Clearing Member who fails to comply with the obligation set out in Rule 6.5.2A; and

"selling Clearing Member" refers to the Clearing Member who has sold securities in the buying-in market.

Amended on 3 April 2008 3 April 2008, 20 November 2009 20 November 2009 and 10 December 2018 10 December 2018.

6.7.2 Buying in

(1) If a short Clearing Member fails, on the Intended Settlement Day of a Novated Contract, to make securities available in accordance with Rule 6.5.2A, CDP shall have the discretion but not the obligation to commence buying-in, on the buying-in market, of those securities, on the Clearing Member's behalf, without prior notice to the short Clearing Member.

(1A) Subject to Rule 6.7.12(1), such buying-in will commence on the Intended Settlement Day of the Novated Contract.

See Practice Note 6.7.2(1A), 6.7.4(8), 6.7.7A and 6.7.11.

(2) [Deleted]

(3) [Deleted]

(4) The costs of the buying-in shall be paid by the short Clearing Member.

Amended on 3 April 2008 3 April 2008, 20 November 2009 20 November 2009 and 10 December 2018 10 December 2018.

6.7.3 Notification of Buying-in

(1) CDP shall inform each short Clearing Member of each and every security that will be bought in on behalf of the short Clearing Member.

(2) Buying-in against the short Clearing Member may proceed according to this information and in accordance with Rule 6.7.4.

Amended on 27 March 2007 27 March 2007; 20 November 2009 20 November 2009 and 10 December 2018 10 December 2018.

6.7.4 Buying-In Procedures

(1) CDP shall schedule a time for commencement of buying-in and inform Clearing Members of the scheduled time via circular. On the day of buying-in, CDP shall, as far as practicable, by the scheduled time for commencement of buying-in, notify Clearing Members of the securities for buying-in via the SGX website or through such other medium as CDP may consider appropriate. CDP shall, at least 3 working days before changing the scheduled time for commencement of buying-in, inform Clearing Members of the details of such change via circular.

(1A) If CDP is of the opinion that, due to an emergency on a particular day, buying-in is unlikely to commence at the scheduled time, CDP shall, via circulars or such other medium as CDP may consider appropriate, inform Clearing Members of the following matters:

(a) that buying-in will not commence at the scheduled time; and

(b) when it can be determined, the estimated time at which the delayed buying-in will commence.

In any case where the commencement of buying-in is delayed, the delayed buying-in shall only commence at least 15 minutes after the original scheduled time.

(2) [Rule has been deleted.]

(3) [Rule has been deleted.]

(4) [Rule has been deleted.]

(5) The buying-in bid price, as determined by CDP, will be 2 minimum bids above the highest of the following:

(a) the closing price of the previous day;

(b) the reference transacted price,

(c) the reference bid price; and

(d) in respect of a trade in the buying-in market on the previous Market Day for which delivery failed, the transacted price of that trade.

For the purpose of this Rule, the reference transacted price and the reference bid price will be any of the last transacted prices and bid prices within the 1 hour preceding the commencement of buying-in, as determined by CDP.

(5A) Where necessary, CDP shall have the discretion to make adjustments to any of the prices described in 6.7.4(5) to cater for corporate actions on the particular security.

(6) [Rule has been deleted.]

(7) If the securities are not obtained after the commencement of buying-in, CDP shall have absolute discretion to raise the buying-in price bid by 2 minimum bids, as determined by SGX-ST, from the following, in order to facilitate the successful buying-in of the securities:

(a) the prevailing buying-in bid price;

(b) the transacted price in the ready market; or

(c) the bid price in the ready market,

at such time as determined by CDP, from time to time throughout the buying-in session until the securities are bought-in.

(8) Subject to Rule 6.7.12(1), if the securities to be bought-in are not bought-in on the first day scheduled for buying-in and unless the securities are withdrawn from buying-in or the short Clearing Member makes the securities available for delivery to CDP by such time as specified by CDP on the following Market Day, the buying-in shall continue on the following Market Day with the buying-in bid price at the commencement of buying-in determined in accordance with 6.7.4(5) and 6.7.4(5A), and CDP shall have absolute discretion to raise the buying-in bid price after the commencement of buying-in in accordance with 6.7.4(7).

See Practice Note 6.7.2(1A), 6.7.4(8), 6.7.7A and 6.7.11.

(8A) [deleted]

(9) [Rule has been deleted.]

(10) [Rule has been deleted.]

(11) [Rule has been deleted.]

(12) [Rule has been deleted.]

Amended on 27 March 2007 27 March 2007, 3 April 2008 3 April 2008, 20 November 2009 20 November 2009, 15 June 2011 15 June 2011, 22 April 2013 22 April 2013 and 10 December 2018 10 December 2018.

6.7.5 [Rule has been deleted.]

Deleted on 22 April 2013 22 April 2013.

6.7.6 Suspension of Buying-In

(1) Buying-in shall not apply whenever SGX-ST suspends trading of a security. CDP may then require the short Clearing Member to procure the securities within the time stipulated by CDP.

(1A) Buying-in shall not apply whenever trading of a security is halted. CDP may:

(a) commence buying-in when trading in that security resumes. The buying-in bid price of that security will be determined as described in 6.7.4(5), 6.7.4(5A) and 6.7.4(7); or

(b) require the short Clearing Member to procure the securities within the time stipulated by CDP.

(2) Notwithstanding Rule 6.7.6(1), CDP may suspend either indefinitely or for such time as it thinks fit the buying-in of any securities when circumstances appear to make such suspension desirable. CDP may from time to time, either during the continuance or after the termination of any such suspension, remove, renew or re-impose such suspension.

Amended on 22 April 2013 22 April 2013.

6.7.7 Commission for Buying-In Trades

Buying-in commission, at a rate to be advised by CDP from time to time, shall be charged and borne by the short Clearing Member.

Amended on 10 December 2018 10 December 2018.

6.7.7A Procurement

Subject to Rule 6.7.12(1), if securities to be bought-in are not bought-in by the second day scheduled for buying-in, the short Clearing Member shall procure the securities, whether by transacting on the ready market or otherwise, to discharge its delivery obligation.

See Practice Note 6.7.2(1A), 6.7.4(8), 6.7.7A and 6.7.11.

Added on 10 December 2018 10 December 2018.

6.7.8

CDP shall have the discretion to require a short Clearing Member to furnish reports and confirmations that the delivery requirements have been complied with in respect of all sale contracts.

6.7.9

CDP reserves the right to institute buying-in against or require procurement in respect of open sale positions although the net delivery position of the short Clearing Member with CDP is not a short position.

Amended on 10 December 2018 10 December 2018.

6.7.10 [Rule has been deleted.]

Deleted on 20 November 2009 20 November 2009.

6.7.11 Cash Settlement

If a Clearing Member's obligation to deliver securities in respect of a Novated Contract remains outstanding on the fifth (5^th) Settlement Day (or such other number of Settlement Days as CDP may specify) after the Intended Settlement Day of the Novated Contract, CDP shall, on the next Settlement Day, cash settle the Clearing Member's delivery obligation.

Refer to Practice Note 6.5.1B(2), 6.6.2, 6.7.11 and 8.2.2(3E) and Practice Note 6.7.2(1A), 6.7.4(8), 6.7.7A and 6.7.11.

Added on 10 December 2018 and Amended on 6 September 2021.

6.7.12

CDP reserves the right to:

(1) dispense with, or vary the commencement, duration, or any other timelines specified for, any buying-in or procurement to be conducted under this Rule 6.7; and/or

(2) cash settle an outstanding delivery obligation notwithstanding that buying-in and/or procurement has not been conducted.

Added on 10 December 2018 10 December 2018.

6.7A Penalties and Disciplinary Action for the Non-Delivery of Securities

Amended on 10 December 2018 10 December 2018.

6.7A.1

(1) If a Clearing Member fails to deliver, in accordance with Rule 6.5.2, securities in respect of a Novated Contract when due, CDP may impose upon the short Clearing Member a fine of:

(a) $1,000 or 5% of the contract value of the undelivered securities (whichever is higher); or

(b) if the securities are to settle a Novated Contract arising from a trade on the buying-in market, $5,000 or 10% of the contract value of the undelivered securities (whichever is higher).

(2) Nothing in the foregoing prevents CDP from waiving the fine under Rule 6.7A.1 for:

(a) market makers of cross-listed exchange traded funds; or

(b) such participants and such class of market participants that CDP may deem appropriate from time to time.

Added on 20 November 2009 20 November 2009 and amended on 15 September 2017 15 September 2017 and 10 December 2018 10 December 2018.

6.7A.2

If a Clearing Member's obligation to deliver securities in respect of a Novated Contract remains outstanding on the fifth (5^th) Settlement Day after delivery is due, CDP may impose a further penalty of $5,000.

Added on 20 November 2009 20 November 2009 and amended on 10 December 2018 10 December 2018.

6.7A.3

CDP may refer a Clearing Member to the Disciplinary Committee where CDP is satisfied that the Clearing Member has frequently failed to deliver securities when due.

Added on 20 November 2009 20 November 2009 and amended on 10 December 2018 10 December 2018.

6.7A.4

(1) CDP may refer a Clearing Member to the Disciplinary Committee where:

(a) the Clearing Member fails to procure securities as directed by CDP, pursuant to these Rules; or

(b) the Clearing Member fails to deliver securities in the buying-in market in accordance with the buying-in procedures as prescribed by CDP.

(2) If the Disciplinary Committee is satisfied that CDP has proved on a balance of probabilities that the Clearing Member has committed the conduct described in the charge, the Disciplinary Committee:

(a) shall impose a penalty, pursuant to its power under Rule 11.5.4, not lower than $20,000; and

(b) may choose to impose, in addition to the penalty in subsection (a), any one or more of the sanction(s) as set out in Rule 11.5.4.

Added on 20 November 2009 20 November 2009 and amended on 21 January 2013 21 January 2013 and 10 December 2018 10 December 2018.

6.8 [Rule has been deleted.]

Deleted on 26 April 2013 26 April 2013.

6.8.1 [Rule has been deleted.]

Deleted on 26 April 2013 26 April 2013.

6.8.2 [Rule has been deleted.]

Deleted on 26 April 2013 26 April 2013.

6.8.2.1 [Rule has been deleted.]

Deleted on 26 April 2013 26 April 2013.

6.8.2.2 [Rule has been deleted.]

Deleted on 26 April 2013 26 April 2013.

6.8.2.3 [Rule has been deleted.]

Deleted on 26 April 2013 26 April 2013.

6.8.2.4 [Rule has been deleted.]

Deleted on 26 April 2013 26 April 2013.

6.8.3 [Rule has been deleted.]

Deleted on 26 April 2013 26 April 2013.

6.9 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6.9.1 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6.9.2 [Rule has been deleted.]

Deleted on 21 January 2013 21 January 2013.

6.10 Emergency Powers

6.10.1

In relation to Novated Contracts, where CDP deems it necessary or desirable for ensuring a fair and orderly market or for ensuring a safe and efficient clearing facility, or for ensuring the integrity of the market or for proper management of systemic risk in the market, CDP may, whether in relation to 1 or more Clearing Members or otherwise:

(1) require that margins (whether additional or otherwise) be deposited with CDP during the next banking hour after demand or at such time as may be specified by CDP;

(2) require that a portion of the positions carried in any account(s) on the books of such Clearing Member be transferred to the books of 1 or more Clearing Members;

(3) require such Clearing Member to liquidate any of the positions carried in any account(s) on its books;

(4) modify any term in any Contract Specifications, which may include bringing forward the Last Trading Day, or modifying settlement obligations and due dates;

(5) require such Clearing Member to close any accounts;

(6) require such Clearing Member to deposit additional funds with CDP by such time as it shall specify and in the amount it deems necessary to meet settlements obligations;

(7) impose such additional capital requirements on such Clearing Member as CDP deems necessary or desirable;

(8) impose such limits and/or conditions to control the activities of such Clearing Member as CDP deems necessary or desirable; and/or

(9) take such action or require the Clearing Member to take such action as CDP deems necessary or desirable.

Added on 23 January 2009 23 January 2009 and amended on 10 December 2018 10 December 2018 and 3 June 2019 3 June 2019.

6.10.2

CDP shall, as soon as practicable, notify the Authority of any action taken by CDP pursuant to Rule 6.10.1.

Added on 23 January 2009 23 January 2009.

6.10.3

Without prejudice to the generality of Rule 1 or Rule 10, CDP shall not be liable to any Clearing Member or any Third Party in respect of any damage, loss, cost or expense of whatsoever nature (whether direct, indirect, special or consequential, including without limitation any loss of business, revenue, goodwill, bargain or profit), suffered or incurred by such Clearing Member or Third Party, arising out of or in connection with the exercise or non-exercise by CDP of its powers under Rule 6.10.1 or the determination by CDP of the satisfaction or non-satisfaction of any condition for the exercise of such powers.

Added on 26 April 2013 26 April 2013.

6.11 Market Disorders, Impossibility of Performance, Emergency Situations

6.11.1

Without prejudice to Rule 1.1.3, if CDP determines that any one of the following conditions is satisfied, namely:—

(1) a state of war or emergency exists or is imminent or threatened and is likely to affect or has affected the normal course of business, including, but not limited to, performance under any Novated Contract;

(2) the government of any nation, state or territory or any institution or agency thereof has proclaimed or given notice of its intention to exercise, vary or revoke controls which appear likely to affect the normal course of business, including, but not limited to, performance under any Novated Contract;

(3) any international organisation, or any institution or agency thereof, has introduced, varied, terminated or allowed to lapse any provision so as to be likely to affect the normal course of business, including, but not limited to, performance under any Novated Contract, or has given notice of its intention to do so or appears to be about to do so;

(4) CDP determines that excessive positions or unwarranted speculation or any other undesirable situation or practice is developing or has developed which is affecting or capable of affecting a market in any Marginable Futures Contract or its underlying;

CDP shall be entitled to exercise the powers under Rules 6A.9A and 6.10.

Added on 23 January 2009 and amended on 21 January 2013, 26 April 2013 and 6 September 2021.