Segregated Depository Accounts

 

 

Segregated Depository Accounts

 6.13.1 A Primary Participant may open, maintain and close Segregated Depository Accounts for its Clients as stipulated by Directive. 

6.13.2 A Segregated Depository Account may be opened in the Own Name of a Client, or in the name of a Nominee. 

6.13.3 A Primary Participant is responsible for administering its Client's Segregated Depository Account in accordance with the provisions of the Act. Rules. Directives and Client mandate. 

6.13.4 Where a Segregated Depository Account is opened in accordance with Rule 6.13.1. a Client may appoint a Secondary Participant that has agreed to act as such and as stipulated by Directive. On assenting to act as a Secondary Participant, such Participant must conclude a mandate with the Client containing the minimum provisions as stipulated in the Rules and Directives. and confirm in writing to the CSD that it has assented to act as a Secondary Participant and has concluded the required mandate.

6.13.5 Where a Secondary Participant has been appointed in accordance with Rule 6.13.4, such Secondary Participant must open and administer a Segregated Depository Account in the event of an Insolvency Proceeding against such Client's Primary Participant. in accordance with the Rules and Directives.

6.13.6 A Client may only operate its Segregated Depository Account through its Primary Participant. In the event of an Insolvency Proceeding against the Client's Primary Participant, the Client may only operate its Segregated DePOsitory Account through the Secondary Participant appointed in accordance with Rule 6.13.4, and in accordance with the Rules and Directives. 

Movement of Securities from Primary Participant to Secondary Participant

6.13.7.1 Notwithstanding the provisions of Rule 5.6.3.6, in the event of an Insolvency Proceeding against a Client's Primary Participant, the CSD must, upon instruction by the Secondary Participant. as stipulated by Directive. move the unencumbered Securities held in a Segregated Depository Account administered by a Primary Participant to a Segregated Depository Account administered by a Secondary Participant appointed in accordance with Rule 6.13.4. 

6.13. 7.2 The movement of Securities held in the Segregated Depository Accounts from the Primary Participant to the Secondary Participant, in accordance with 6.13.7.1. does not constitute a change in ownership, and transfers no greater rights or lesser obligations to the account holder.

6.13.8 The following operational provisions will applv to Segregated DePOsitory Accounts: 

6.13.8.1 Transfer of ownership of Securities in a Segregated Depository Account shall be effected by the debiting of the Segregated Depository Account or Securities Account from which the transfer is effected and the crediting of the Segregated Depository Account or Securities Account to wbich the transfer Is effected, as the case may be. In accordance with the Act. Companies Act. where applicable, Rules and Directives. 

6.13.8.2 A transferee shall, upon the crediting of the Segregated Depository Account, become the owner of the Securities. 

6.13.8.3 Transfer of ownership of Securities in accordance with Rules 6.13.8.1 and 6.13.8.2 shall occur notwithstanding any fraud, illegality or insolvency which may affect the Securities in respect of which the transfer was effected or which may have resulted In the transfer being effected: provided that a transferee who was a partv to or had notice of the fraud or illegalitv mav not rely on this Rule. 

6.13.8.4 Only the CSD may credit or debit Securities in Segregated Depository Accounts. 

6.13.8.5 The CSD must only transfer Securities or make any other Entry in a Segregated Depository Account on receipt of an Authenticated Instruction from a Participant, and in accordance with the Rules and Directives.

6.13.8.6  A Participant must ensure that all Securities credited or debited to its Clients' Segregated Depository Accounts are credited or debited to the relevant Securities Accounts in its records.

6.13.8.7 Nothing in this Rule 6.13 shall prejudice any power of the CSD to effect transfer to a person to whom the right to any Securities held in a Segregated Depository Account has been transmitted by operation of law or agreement. or pursuant to a court order. 

6.13.8.8 The Segregated Depository Account shall be sufficient proof of any matters directed or authorised to be entered therein by the Act. Companies Act, where applicable, Rules, Directives and Client mandate.

6.13.9 Settlement of transactions in Securities held in Segregated Depository Accounts must take place in the manner stipulated by Directive and in accordance with the Act. Companies Act and Rules. 

6.13.10 The requirements of the Act. Companies Act. Rules and Directives applicable to Securities Accounts shall also be applicable to any Segregated Depository Accounts and corresponding Securities Accounts. In the event of a conflict between another provision of the Rules or Directives and this Rule 6.13, then to the extent of such conflict, the provisions of this Rule 6.13 shall prevail.