CONTROLLED CLIENT SETTLEMENT OBLIGATIONS

 
10.80 CONTROLLED CLIENT SETTLEMENT OBLIGATIONS
 
10.80.1 A controlled client must, by no later than 16h00 on the second business day after the trade date, ensure that the member which effected the transaction on behalf of such client will be in a position to settle the transaction on settlement date, either by providing the equity securities or funds required to settle the transaction to the member or by entering into an arrangement with the member to facilitate settlement of the transaction.
 
10.80.2 If a controlled client fails to comply with rule 10.80.1, or the member is advised or otherwise becomes aware, at any stage, that a controlled client is unable to settle a transaction, the member may proceed in the manner set out in rule 10.100.
 
10.100 BREACHES OF CLIENT SETTLEMENT OBLIGATIONS
 
10.100.1 If a client breaches his settlement obligations as set out in the rules, subject to any agreement with the client or notification to the client to the contrary, and to any action taken by the Settlement Authority in terms of the rolling of settlement procedures set out in rule 10.105 or the failed trade procedures set out in rule 10.110, the member may -
 
10.100.1.1 in respect of a sale transaction, buy such equity securities for the account of the client and claim the difference between the selling consideration of such securities and the purchase consideration for such securities;
 
10.100.1.2 in respect of a purchase transaction, sell such equity securities for the account of the client and claim the difference between the purchase consideration of such securities and the selling consideration for such securities; and
 
10.100.1.3 sell for the account of such client–
 
10.100.1.3.1 so many of any other equity securities belonging to such client and held by or in the custody of such member; or
 
10.100.1.3.2 so many of any other equity securities due to be received by the member on the relevant settlement date in respect of any purchase transaction previously entered into by such client with or through the member, as is necessary to realise an amount equal to the amount still owing by the client in respect of such securities, after the sale or purchase of the equity securities in terms of rules 10.100.1.1 and 10.100.1.2, as the case may be.
 
10.100.2 If a member acts in accordance with rule 10.100.1, the timing of the relevant purchases or sales as referred to in rules 10.100.1.1 to 10.100.1.3 and the price at which such transactions are executed should take cognisance of –
 
10.100.2.1 the time at which the breach by the client was or should have been identified by the member;
 
10.100.2.2 any agreement with or notification to the client with regard to the timing of such transactions; and
 
10.100.2.3 the market conditions in relation to the relevant equity security; bearing in mind the overriding principle that the client is responsible for meeting his settlement obligations and that if he does not meet those obligations, the member may take reasonable action to mitigate its risk arising out of such a breach of obligations.
 
10.100.3 The client will be liable for any losses, costs and charges incurred, or charges imposed, as a consequence of a breach and the member may charge interest in relation thereto.