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Status: You are viewing the version of the handbook as on 2005-06-30.

REC 2.8 Settlement and clearing services

REC 2.8.1UKRP

Schedule to the Recognition Requirements Regulations, Paragraph 4(2)(d)

Without prejudice to the generality of sub-paragraph [4(1)], the [UK RIE] must ensure that -

satisfactory arrangements are made for securing the timely discharge (whether by performance, compromise or otherwise) of the rights and liabilities of the parties to transactions effected on the [UK RIE] (being rights and liabilities in relation to those transactions);1

REC 2.8.2UK

Schedule to the Recognition Requirements Regulations, Paragraph 19(2)(b)

Without prejudice to the generality of sub-paragraph [19(1)], the [UK RCH] must ensure that -

its clearing services involve satisfactory arrangements for securing the timely discharge (whether by performance, compromise or otherwise) of the rights and liabilities of the parties to transactions in respect of which it provides such services, (being rights and liabilities in relation to those transactions);1

REC 2.8.3GRP

In determining whether there are satisfactory arrangements for securing the timely discharge of the rights and liabilities of the parties to transactions, the FSA may have regard to the UK recognised body's:

  1. (1)

    rules and practices relating to clearing and settlement;

  2. (2)

    arrangements for matching trades and ensuring that the parties are in agreement about trade details;

  3. (3)

    arrangements for making deliveries and payments and, where relevant, for collecting margin and holding collateral, in all relevant jurisdictions;

  4. (4)

    procedures to detect and deal with the failure of a member to settle in accordance with its rules;

  5. (5)

    arrangements for taking action to settle a trade if a member does not settle in accordance with its rules;

  6. (6)

    arrangements for monitoring its members' settlement performance; and

  7. (7)

    (where appropriate) default rules and default procedures.

REC 2.8.4GRP

A UK recognised body will not be regarded as failing to comply with the recognition requirement merely because it is unable to arrange for a specific transaction to be settled.