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Article 70 The clearing participant may hold the securities to be delivered to its client in a Securities Disposition Account opened with the CSDCC under applicable provisions set out by the CSDCC until it has received payment in full in respect of the Securities-on-hold.
Article 71 The Clearing Participant may require a client to provide certain amount of collateral in certain form or impose other risk control measures as it thinks fit given the level of the client's risk exposure.
The specific level of the collateral required of the investor is to be determined on an ex-ante basis in the agreement on securities brokerage, custody, and clearing services entered into by the participant and the individual client.
Article 72 In the event of a client default in any of the payment obligations due to the clearing participant, the clearing participant may instruct the CSDCC to transfer the net securities to be delivered to the defaulting client to its Securities Disposition Account instead, while inform the defaulting client to top up the outstanding payment obligations owed to the participant within the predefined time limit.
Article 73 In the event of a client default in delivery obligations owed to the clearing participant, the clearing participant may suspend the corresponding payment against such securities.
Article 74 Should the default by a client in any of its payment or delivery obligations continue unremedied within the predefined period, the participant may sell or utilize the securities or funds held in the Securities Disposition Account towards the satisfaction of any outstanding obligations.
The participant may apply the sale proceeds or the funds as said before towards the satisfaction of the payment or delivery obligations or the reimbursement of any expense or costs incurred; the balance of such sale proceeds or funds remaining after satisfaction of all obligations and liabilities shall be returned to the defaulting client. Conversely, if the outstanding obligations remain unsatisfied after application of the proceeds or the funds, the participant may exercise recourse against the defaulting client on the outstanding obligations or any cost or expense incurred
Article 75 The clearing participant shall be liable for the breach of its obligations to make timely payment due to the client and/or instruct the CSDCC in a timely manner to debit certain quantity and type of securities owing to the client from its Stock Clearing Account and simultaneously make a corresponding credit entry to the securities account of the receiving client. The participant must indemnify the client for any loss suffered by the client in respect of such default.
Article 76 A client default does not constitute a justifiable ground for a clearing participant to be exempted from its settlement obligations owed to the CSDCC, or to prejudice the operation of central clearing & settlement (whether concluded or ongoing) as well as the CSDCC's execution of transfer of securities.
Article 77 The rules can be applied to the securities clearing and settlement procedures with regard to non- clearing-participant securities company versus investors. |
