37. Duties of a clearing house

operate a safe, efficient and effective clearing facility for the purposes of clearing or settlement of securities transactions;

manage any risks associated with its business and operations prudently;

maintain an adequate level of capital in accordance with the financial risks undertaken with regard to the securities transactions that are to be cleared and settled using its services;

undertake financial liability within the limits established in its rules and within the framework of the guarantees to be taken from its clearing members in the form of margins, charges and collateral;

establish and maintain a data processing infrastructure and other internal controls including internal audit systems for risk management;

segregate the guarantees and the assets of account holders from the assets of the licensed clearing house;

not use the guarantees or assets taken from its clearing members for purposes other than those for which they were deposited; and

act in the public interest having particular regard to the need to protect investors.

have robust governance arrangements, which include a clear organizational structure with well-defined, transparent and consistent lines of responsibility, effective processes to identify, manage, monitor and report the risks to which it is or might be exposed, and adequate internal control mechanisms, including sound administrative and accounting procedures;

adopt policies and procedures which are sufficiently effective so as to ensure compliance with this Act, regulations, rules or directives made thereunder;

maintain and operate an organizational structure that ensures continuity and orderly functioning in the performance of its services and activities, and shall employ appropriate and proportionate systems, resources and procedures;

maintain a clear separation between the reporting lines for risk management and those for the other operations of the clearing house;

maintain information technology systems adequate to deal with the complexity, variety and type of services and activities performed in order to ensure high standards of security to ensure the integrity and confidentiality of the information maintained;

make its governance arrangements, the rules governing the licensed clearing house, and its admission criteria for licensed clearing house membership, available to the public free of charge.