25 OCTOBER NEW ZEALAND GAZETTE 4139

member sued shall have, after 14 days’ notice in writing, refused or neglected to carry out such decision. In any such action, no member shall dispute the correctness of such decision or award, or the fact that it was given in accordance with these Rules.

20. Defaulting Members

20.1 Member in default: A member firm shall be deemed to be a defaulter in each of the following cases:

(a) Where it is so declared by the Chairman after it has failed to deliver the securities or pay the money demanded of it pursuant to any Rule relating to delivery and settlement.

(b) Where the Board has made such enquiries (if any) as it thinks fit and resolves that in its opinion the member firm is in difficulties and has failed or is likely to fail to meet its liabilities.

(c) Where it has committed an act of bankruptcy or has become bankrupt or is insolvent or has called a meeting of its creditors or has made a composition with its creditors or assignment for the benefit of its creditors.

(d) Where the Board has made such enquiries (if any) as it thinks fit and resolves that in its opinion other circumstances exist which justify such member firm being considered a defaulter in order to protect the financial interests of members or of the investing public or for such other reasons as may be considered to be relevant in the interests of the Exchange and its members in the proper and efficient conduct of such Exchange’s affairs.

20.2 Chairman to notify members: Where a member firm has been deemed to be a defaulter under Rule 20.1, that decision shall be notified immediately by the Chairman to all members.

20.3 Contracts and Defaulters:

(a) Subject to the provisions of these Rules, every uncompleted contract with a member firm shall be deemed to be rescinded, closed and terminated as from the time the member firm becomes a defaulter and, where the contract is partially uncompleted, that contract shall be deemed to be rescinded, closed and terminated as to the uncompleted balance.

(b) The Board (whose decision shall be final) shall determine the market price on the day the member firm becomes a defaulter and any surplus or deficiency in respect of such uncompleted contract or balance thereof shall be determined accordingly.

(c) The defaulter shall be liable to the other member firm for any such deficiency and such other member firms shall account to the defaulter for any surplus.

(d) Every member firm involved with a defaulter on a rescinded contract shall promptly inform the Exchange of the details.

20.4 Declaration of default and suspension: The Board may declare any member firm a defaulter and may suspend such member firm from membership of the Exchange for such time as it shall think fit.

20.5 Member’s obligation to report: In any case where it comes to the knowledge of a member that another member of the Exchange has failed to meet his obligations, such member shall promptly report the circumstances of the case to the Chairman. Failure to so report such circumstances is a breach of these Rules.

20.6 Chairman to investigate: The Chairman upon receiving a report that a member firm has failed to meet its obligations, shall immediately cause an investigation of the matter to be made and shall simultaneously advise the Board that the affairs of such member firm are under investigation. He shall similarly advise the result of such investigation when completed.

20.7 Members to facilitate inquiries: Where any inquiries as to the credit or position of any member firm of the Exchange are being made by the Exchange, every other member shall on request facilitate such inquiries and make all necessary inquiries into dealings with the member firm whose position is being investigated.

21. Suspension and Loss of Membership

21.1 Suspension of principal on default of member firm: Where a member firm has been declared a defaulter in terms of Rules 20.1 or 20.4, every principal of that member firm shall, from the time such declaration of default has been made, be deemed to be suspended until further notice.

21.2 Suspended member to provide assistance: Any individual full member suspended under Rule 21.1 shall, as a condition of retaining his membership:

(a) Provide all reasonable assistance to the receiver, liquidator, special manager or any other appropriate person to enable both the financial position of the member firm to be established and the reconciliation of accounts with all other member firms to be completed; and

(b) Contribute financially his appropriate share:

(i) to the costs of the resolution of the member firm’s affairs; and

(ii) to the funding of any liability which the member firm might have to its clients and stockbroking creditors after determining the member firm’s recoverable assets.

21.3 Financial contribution of suspended member: The amount of the appropriate share in Rule 21.2(b) shall be determined by the Board. The Board shall give the suspended member an opportunity to explain to the Board his view on what constitutes an appropriate share. In making such a determination, the Board shall have regard to the view of the suspended member, the interest which an individual full member has in the member firm, the extent to which the individual full member was in a position to influence or control the direction of the member firm, and any other matters which the Board reasonably regards as relevant to enable the appropriate share to be determined.

21.4 Other grounds for suspension: A member firm and/or all or any of its principals (as appropriate) may be suspended by the Board pursuant to these Rules, including Rules 8.13, 10.22(c), 23.6 and 24.4 or by the Disciplinary Committee pursuant to Rule 18.

21.5 Application to lift suspension: Any individual full member or a member firm, as the case may be, who has been suspended in terms of these Rules may apply in writing to the Board for that suspension to be lifted. Without limiting the discretion of the Board to decide the matter, it shall be reasonable grounds for the suspension to be lifted where:

(a) The individual full member or member firm, as the case may be, is able to show to the satisfaction of the Board that in the circumstances of his or its case, it might not have been appropriate for the suspension to be imposed; or

(b) (in the case of suspension under Rule 21.1) the individual full member is able to provide evidence satisfactory to the Board of his ongoing commitment to meet the obligations set out in Rule 21.2.

21.6 Effect of suspension generally: For the purposes of any Rule which provides for suspension of a member, “suspension” means that the member concerned shall not, for the period of the suspension, be entitled to exercise any of his or its rights as a member, including: