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Article NO. Content


Operating Rules for Custody and Investment of Funds by Securities Firms on Behalf of Customers  CH

Amended Date: 2015.03.31 
Categories: Securities Exchange Market > Borrowing of Money
Article 22     If a customer lacks sufficient funds to settle a trade, the securities firm shall on its own initiative cover the customer's settlement obligation with the custodied funds of the customer not yet reaching the minimum investment level, and, if still insufficient, then dispose of subject instruments in the order of priority as agreed with the customer to cover the settlement obligation.
    For the purposes of transferring the needed settlement money under the preceding paragraph, the securities firm shall first forward the proceeds received on disposal of subject instruments to its cash management account, and then promptly transfer the proceeds to its relevant settlement account and settle the obligation on behalf of the customer.
    The securities firm shall promptly give notice to the customer for clarification of responsibilities when it finds that the customer still lacks sufficient funds for settlement of trade even after action has been taken under paragraph 1, or when the proceeds from disposal of subject instruments cannot be timely transferred to the account by the due time for settlement of the customer's obligation.
    For the purposes of paragraph 1, the account with respect to which further action is to be taken due to a customer's lacking of sufficient settlement funds may only be one that involves a source of funds specified in Article 9, paragraph 1 and as agreed between the securities firm and the customer.