OSC: Market Regulation - CDS Clearing and Depository Service Inc. - Material Amendments to CDS Rules - Euroclear UK Direct Service - Notice of Commission Approval

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CDS CLEARING AND DEPOSITORY SERVICES INC.

MATERIAL AMENDMENTS TO CDS RULES

EUROCLEAR UK DIRECT SERVICE

NOTICE OF COMMISSION APPROVAL

In accordance with the Rule Protocol between the Ontario Securities Commission (Commission) and CDS Clearing and Depository Services Inc. (CDS^®), the Commission approved on August 16, 2007 material amendments filed by CDS to its rules relating to the Euroclear UK Direct Service {1}.

Under the Euroclear UK Direct Service, CDS full service Participants will be eligible to apply for CDS-sponsored membership into CREST (the settlement system operated by Euroclear UK and Ireland Limited {2}). Participants will be able to directly access settlement of securities in the United Kingdom. A copy and description of these amendments were published for comment on December 8, 2006 at (2006) 29 OSCB 9670. One comment letter was received. A summary of the comments received and CDS's responses are listed in Appendix A. Additional non-significant revisions were made to the material amendments to account for the Euroclear UK and Ireland Limited name change and resulting consequential revisions as well as a typographical correction in Rule 14.1.4(a) where the term "CRESTCo" should have referred to "CREST". The material amendments that were approved by the Commission are provided in Appendix B (the non-significant revisions have been blacklined to indicate the changes from the previously published version).

{1} Previously named CREST Link Service.

{2} Prior to July 1, 2007, name was CRESTCo Ltd.

APPENDIX A

Summary of Comments

(Comment Period from 2006-Dec-08 to 2007-Jan-08)

Euroclear UK Direct Service

CDS received one comment letter from RBC Dexia.

Summarized Comments		CDS Response

The commenter indicated that the costs to develop and maintain the service should be recovered directly and exclusively from subscribing participants.		The development and maintenance costs are being paid from CDS's general resources, not just from subscribing participants, as this service is being developed as a first stage of CDS's international strategy to support all participants that are seeking greater access to foreign markets. The service is available to all participants and is expected to grow in usage over time and is being developed and charged similar to how CDS develops and provides other services.

APPENDIX B

CDS Rule Amendment -- Euroclear UK Direct Service

Proposed Rule Amendments -- Non-significant Revisions

Text of CDS Participant Rules marked to reflect non-			Text CDS Participant Rules reflecting the adoption of
significant revisions to the proposed Rule published for			non-significant revisions to the proposed Rule
comment on December 8, 2006			published for comment on December 8, 2006

1.1.1 Application			1.1.1 Application

The Rules adopted by CDS by which each Participant has agreed to be bound pursuant to the Participant Agreement are:			The Rules adopted by CDS by which each Participant has agreed to be bound pursuant to the Participant Agreement are:

	(a)	Rule 1 -- Documentation ...		(a)	Rule 1 -- Documentation ....

	(n)	Rule 14 - ~~CREST Link~~<<Euroclear UK Direct>> Service.		(n)	Rule 14 - Euroclear UK Direct Service.

1.2.1 Definitions			1.2.1 Definitions

For the purposes of the Legal Documents, unless otherwise specified:			For the purposes of the Legal Documents, unless otherwise specified:

...			...

"CREST" means the system operated by <<~~CRESTCo~~Euroclear UK & Ireland>> for the settlement of trades in securities.			"CREST" means the system operated by Euroclear UK & Ireland for the settlement of trades in securities.

<<~~"CREST~~ Euroclear UK Direct>> Charges" has the meaning set out in Rule 14.1.10.			"Euroclear UK Direct Charges" has the meaning set out in Rule 14.1.10.

<<~~"CREST Link~~ Euroclear UK Direct >>Participant" means a Participant who uses the <<~~CREST Link~~ Euroclear UK Direct >>Service".			"Euroclear UK Direct Participant" means a Participant who uses the Euroclear UK Direct Service".

"<<~~CREST Link~~Euroclear UK Direct>> Service" means the<<~~CREST Link~~Euroclear UK Direct>> Service made available pursuant to Rule 14.			"Euroclear UK Direct Service" means the Euroclear UK Direct Service made available pursuant to Rule 14.

"CREST Software" has the meaning set out in Rule 14.1.6.			"CREST Software" has the meaning set out in Rule 14.1.6.

"<<~~CRESTCo~~ Euroclear UK & Ireland>>" means<< ~~CRESTCo Limited~~ Euroclear UK & Ireland Limited, >>the central securities depository for the UK market and Irish equities and a part of the Euroclear group, or any Person who succeeds to the rights and obligations of <<~~CRESTCo~~ Euroclear UK & Ireland >>with respect to CREST.			"Euroclear UK & Ireland " means Euroclear UK & Ireland Limited, the central securities depository for the UK market and Irish equities and a part of the Euroclear group, or any Person who succeeds to the rights and obligations of Euroclear UK & Ireland with respect to CREST.

"Service" means the Depository Service, the Settlement Service, a Cross-Border Service, ATON, or the Delivery Services or the<<~~CREST Link~~Euroclear UK Direct>> Service. Any reference to a Service includes all Functions made available in respect of that Service.			"Service" means the Depository Service, the Settlement Service, a Cross-Border Service, ATON, the Delivery Services or the Euroclear UK Direct Service. Any reference to a Service includes all Functions made available in respect of that Service.

2.4.11 <<~~CREST Link~~Euroclear UK Direct>> Service			2.4.11 Euroclear UK Direct Service

A full service Participant may use the <<~~CREST Link~~Euroclear UK Direct>> Service in accordance with Rule 14.			A full service Participant may use the Euroclear UK Direct Service in accordance with Rule 14.

2.7.1 Restrictions on System Functionality			2.7.1 Restrictions on System Functionality

CDS may restrict the right of a Participant to use system functionality in the following circumstances:			CDS may restrict the right of a Participant to use system functionality in the following circumstances:

	(a)	CDS determines that the Participant is unable to properly use system functionality due to operational or technical problems with the Participant's own systems or the systems of third parties, or due to events over which the Participant has no control;		(a)	CDS determines that the Participant is unable to properly use system functionality due to operational or technical problems with the Participant's own systems or the systems of third parties, or due to events over which the Participant has no control;

	(b)	in accordance with Rule 5.14 with respect to the Participant's CCP Cap;		(b)	in accordance with Rule 5.14 with respect to the Participant's CCP Cap;

	(c)	the Participant requests CDS to do so; or		(c)	the Participant requests CDS to do so; or

	(d)	in the course of monitoring the Participant pursuant to Rule 5.1.3, CDS determines such action is necessary to protect the interests of CDS and is in the best interest of all other Participants; or		(d)	in the course of monitoring the Participant pursuant to Rule 5.1.3, CDS determines such action is necessary to protect the interests of CDS and is in the best interest of all other Participants; or

	(e)	the Participant fails to comply with Rule 10.2.3 with respect to the Cross-Border Services or with Rule 14 with respect to the <<~~CREST Link~~Euroclear UK Direct >>Service.		(e)	the Participant fails to comply with Rule 10.2.3 with respect to the Cross-Border Services or with Rule 14 with respect to the Euroclear UK Direct Service.

A restriction may apply to any Service or any Function, to a particular Security or class of Securities, to a particular Transaction or class of Transactions, or to Securities or Transactions generally. A restriction may be limited to a particular location or office of the Participant or a particular Office of CDS. CDS may remove the restriction when CDS in its sole discretion determines that the Participant is able to resume normal operations.			A restriction may apply to any Service or any Function, to a particular Security or class of Securities, to a particular Transaction or class of Transactions, or to Securities or Transactions generally. A restriction may be limited to a particular location or office of the Participant or a particular Office of CDS. CDS may remove the restriction when CDS in its sole discretion determines that the Participant is able to resume normal operations.

RULE14 <<~~CREST LINK~~EUROCLEAR UK DIRECT>> SERVICE			RULE14 EUROCLEAR UK DIRECT SERVICE

14.1 OVERVIEW OF <<~~CREST LINK~~EUROCLEAR UK DIRECT>> SERVICE			14.1 OVERVIEW OF EUROCLEAR UK DIRECT SERVICE

14.1.1 <<~~CREST Link~~Euroclear UK Direct>> Service			14.1.1 Euroclear UK Direct Service

CDS offers the <<~~CREST Link~~Euroclear UK Direct >>Service to facilitate the settlement of Transactions by Participants with members of CREST. The<<~~CREST Link~~Euroclear UK Direct>> Service is a gateway providing Network Access between each <<~~CREST Link~~Euroclear UK Direct>> Participant and CREST. CREST is offered directly by<<~~CRESTCo~~Euroclear UK & Ireland>> to each<<~~CREST Link~~Euroclear UK Direct>> Participant, and CDS has no liability or obligation to any Participant with respect to its use of CREST or any Transaction settled by it through CREST. Notwithstanding anything in this Rule14, and subject to Rule3.3.10, CDS will provide the <<~~CREST Link~~Euroclear UK Direct>> Service and the related facilities described in this Rule14 only for so long as (i) CDS continues to be a member of <<~~CRESTCo~~Euroclear UK & Ireland>>, (ii) its membership permits CDS to provide the <<~~CREST Link~~Euroclear UK Direct>> Service, and (iii) there has been no change in the CREST Documents and no action by <<~~CRESTCo~~Euroclear UK & Ireland>> that would prevent its doing so or that would, in CDS's opinion, make it impractical or unduly onerous to do so.			CDS offers the Euroclear UK Direct Service to facilitate the settlement of Transactions by Participants with members of CREST. The Euroclear UK Direct Service is a gateway providing Network Access between each Euroclear UK Direct Participant and CREST. CREST is offered directly by Euroclear UK & Ireland to each Euroclear UK Direct Participant, and CDS has no liability or obligation to any Participant with respect to its use of CREST or any Transaction settled by it through CREST. Notwithstanding anything in this Rule14, and subject to Rule3.3.10, CDS will provide the Euroclear UK Direct Service and the related facilities described in this Rule14 only for so long as (i) CDS continues to be a member of Euroclear UK & Ireland, (ii) its membership permits CDS to provide the Euroclear UK Direct Service, and (iii) there has been no change in the CREST Documents and no action by Euroclear UK & Ireland that would prevent its doing so or that would, in CDS's opinion, make it impractical or unduly onerous to do so.

14.1.2 Application of Rules to <<~~CREST Link~~Euroclear UK Direct>> Service			14.1.2 Application of Rules to Euroclear UK Direct Service

The <<~~CREST Link~~Euroclear UK Direct>> Service is one of the Services offered by CDS and governed by the Legal Documents. The use of the<<~~CREST Link~~Euroclear UK Direct>> Service is governed by Rule1 through Rule5 and by Rule9, except for Rules 4.2.4 and 4.3, which apply only to CDSX. The <<~~CREST Link~~Euroclear UK Direct>> Service is separate from and does not form part of CDSX. Accordingly, the use of the <<~~CREST Link~~Euroclear UK Direct>> Service is not governed by Rule6 - Depository Service, Rule7 - Settlement Service, or Rule8 - Payment Exchange for CDSX.			The Euroclear UK Direct Service is one of the Services offered by CDS and governed by the Legal Documents. The use of the Euroclear UK Direct Service is governed by Rule1 through Rule5 and by Rule9, except for Rules 4.2.4 and 4.3, which apply only to CDSX. The Euroclear UK Direct Service is separate from and does not form part of CDSX. Accordingly, the use of the Euroclear UK Direct Service is not governed by Rule6 - Depository Service, Rule7 - Settlement Service, or Rule8 - Payment Exchange for CDSX.

14.1.3 <<~~CREST Link~~Euroclear UK Direct>> Participants			14.1.3 Euroclear UK Direct Participants

A full service Participant may apply to CDS in accordance with Rule2.2.2 to use the <<~~CREST Link~~Euroclear UK Direct>> Service. An applicant must also apply to <<~~CRESTCo~~Euroclear UK & Ireland>> to become a sponsored member of CREST, in accordance with the CREST Documents, and must satisfy all of the requirements of <<~~CRESTCo~~Euroclear UK & Ireland>>, including providing a legal opinion if required. Upon acceptance of its application by CDS and by<<~~CRESTCo~~Euroclear UK & Ireland>>, the Participant becomes a <<~~CREST Link~~Euroclear UK Direct >>Participant. Each<<~~CREST Link~~Euroclear UK Direct >>Participant is a direct member of CREST, and acknowledges that CDS does not have the authority to make any representations or give any advice on behalf of <<~~CRESTCo~~Euroclear UK & Ireland>>.			A full service Participant may apply to CDS in accordance with Rule2.2.2 to use the Euroclear UK Direct Service. An applicant must also apply to Euroclear UK & Ireland to become a sponsored member of CREST, in accordance with the CREST Documents, and must satisfy all of the requirements of Euroclear UK & Ireland, including providing a legal opinion if required. Upon acceptance of its application by CDS and by Euroclear UK & Ireland, the Participant becomes a Euroclear UK Direct Participant. Each Euroclear UK Direct Participant is a direct member of CREST, and acknowledges that CDS does not have the authority to make any representations or give any advice on behalf of Euroclear UK & Ireland.

14.1.4 CREST Documents			14.1.4 CREST Documents

In order to offer the<<~~CREST Link~~Euroclear UK Direct>> Service and the related facilities governed by this Rule14, CDS has become a sponsoring member of CREST, has entered into various agreements with <<~~CRESTCo~~Euroclear UK & Ireland >>and, as a member of CREST, has agreed to abide by such agreements and by the rules, by-laws, procedures and other requirements of<<~~CRESTCo~~Euroclear UK & Ireland>> from time to time in force. In order to become a sponsored member of CREST, each <<~~CREST Link~~Euroclear UK Direct>> Participant must enter into various agreements with <<~~CRESTCo~~Euroclear UK & Ireland >>and, as a member of CREST, agrees to abide by such agreements and by the rules, by-laws, procedures and other requirements of<<~~CRESTCo~~Euroclear UK & Ireland>> from time to time in force. Each <<~~CREST Link~~Euroclear UK Direct>> Participant shall enter into any such further agreements or instruments, and make such declarations and provide such information, relating to its use of the <<~~CREST Link~~Euroclear UK Direct >>Service, as may be required by CDS. Each Participant shall observe and comply with the CREST Documents applicable to the Participant."CREST Documents" means			In order to offer the Euroclear UK Direct Service and the related facilities governed by this Rule14, CDS has become a sponsoring member of CREST, has entered into various agreements with Euroclear UK & Ireland and, as a member of CREST, has agreed to abide by such agreements and by the rules, by-laws, procedures and other requirements of Euroclear UK & Ireland from time to time in force. In order to become a sponsored member of CREST, each Euroclear UK Direct Participant must enter into various agreements with Euroclear UK & Ireland and, as a member of CREST, agrees to abide by such agreements and by the rules, by-laws, procedures and other requirements of Euroclear UK & Ireland from time to time in force. Each Euroclear UK Direct Participant shall enter into any such further agreements or instruments, and make such declarations and provide such information, relating to its use of the Euroclear UK Direct Service, as may be required by CDS. Each Participant shall observe and comply with the CREST Documents applicable to the Participant. "CREST Documents" means

	(a)	the agreements entered into, instruments executed, declarations made and acts done (i) by CDS from time to time in respect of CDS's sponsoring membership in <<~~CRESTCo~~CREST>> and (ii) by the <<~~CREST Link~~Euroclear UK Direct >>Participant from time to time in respect of its sponsored membership in<<~~CRESTCo~~CREST>>; and		(a)	the agreements entered into, instruments executed, declarations made and acts done (i) by CDS from time to time in respect of CDS's sponsoring membership in CREST and (ii) by the Euroclear UK Direct Participant from time to time in respect of its sponsored membership in CREST; and

	(b)	the rules, by-laws, procedures and other requirements of<<~~CRESTCo~~Euroclear UK & Ireland>> from time to time in force.		(b)	the rules, by-laws, procedures and other requirements of Euroclear UK & Ireland from time to time in force.

14.1.5 Conflict			14.1.5 Conflict

Each Participant acknowledges that CDS, as a member of CREST, must observe and comply with the CREST Documents. In the event that such obligations of CDS conflict with its obligations under the Rules, each Participant acknowledges that CDS must comply with its obligations under the CREST Documents, and such compliance shall not be considered to be a breach by CDS of its obligations under the Rules.			Each Participant acknowledges that CDS, as a member of CREST, must observe and comply with the CREST Documents. In the event that such obligations of CDS conflict with its obligations under the Rules, each Participant acknowledges that CDS must comply with its obligations under the CREST Documents, and such compliance shall not be considered to be a breach by CDS of its obligations under the Rules.

14.1.6 CREST Software			14.1.6 CREST Software

(a) licence			(a) licence

Pursuant to a licence granted by<< ~~CRESTCo~~Euroclear UK & Ireland>> to CDS, CDS will permit each<<~~CREST Link~~Euroclear UK Direct >>Participant to use certain software built by <<~~CRESTCo~~Euroclear UK & Ireland>> (the "CREST Software"), but only for the purpose of using the <<~~CREST Link~~Euroclear UK Direct>> Service. No <<~~CREST Link~~Euroclear UK Direct>> Participant shall:			Pursuant to a licence granted by Euroclear UK & Ireland to CDS, CDS will permit each Euroclear UK Direct Participant to use certain software built by Euroclear UK & Ireland (the "CREST Software"), but only for the purpose of using the Euroclear UK Direct Service. No Euroclear UK Direct Participant shall:

	<<(a)(i) >>	rent, lease, sub-license, transfer, loan, copy, modify, adapt, amend, develop, distribute, enhance, assign, merge or translate the whole or any part of the CREST Software;		(i)	rent, lease, sub-license, transfer, loan, copy, modify, adapt, amend, develop, distribute, enhance, assign, merge or translate the whole or any part of the CREST Software;

	<<(b)(ii) >>	reverse engineer, decompile, disassemble or create derivative works based on the whole or any part of the CREST Software;		(ii)	reverse engineer, decompile, disassemble or create derivative works based on the whole or any part of the CREST Software;

	<<(c)(iii) >>	use, reproduce or deal in the CREST Software in any way; or		(iii)	use, reproduce or deal in the CREST Software in any way; or

	<<(d)(iv) >>	allow any third parties to load, use, copy or reproduce the CREST Software in any way.		(iv)	allow any third parties to load, use, copy or reproduce the CREST Software in any way.

This limited licence to use the CREST Software shall terminate when the Participant ceases to be a<<~~CRESTLink~~Euroclear UK Direct>> Participant, and the Participant shall then immediately remove all copies of the CREST Software from its systems and return to CDS all copies of the CREST Software and all materials relating to the CREST Software.			This limited licence to use the CREST Software shall terminate when the Participant ceases to be a Euroclear UK Direct Participant, and the Participant shall then immediately remove all copies of the CREST Software from its systems and return to CDS all copies of the CREST Software and all materials relating to the CREST Software.

(b) upgrades				(b) upgrades

A<<~~CREST Link~~Euroclear UK Direct>> Participant (i) will accept upgrades of, or other changes to, the CREST Software as issued by <<~~CRESTCo~~Euroclear UK & Ireland>> from time to time; (ii) will install, test and accept such upgrades or other changes promptly in accordance with the timetable issued by <<~~CRESTCo~~Euroclear UK & Ireland>>; and (iii) at all times will load and use only the most recent upgrade or other changes to the CREST Software.			A Euroclear UK Direct Participant (i) will accept upgrades of, or other changes to, the CREST Software as issued by Euroclear UK & Ireland from time to time; (ii) will install, test and accept such upgrades or other changes promptly in accordance with the timetable issued by Euroclear UK & Ireland; and (iii) at all times will load and use only the most recent upgrade or other changes to the CREST Software.

14.1.7 Agents			14.1.7 Agents

As required by the CREST Documents, each<< ~~CREST Link~~Euroclear UK Direct>> Participant will appoint:			As required by the CREST Documents, each Euroclear UK Direct Participant will appoint:

	<<(a)>>	a CREST settlement bank to make or receive payment for Transactions settled through CREST; and		(a)	a CREST settlement bank to make or receive payment for Transactions settled through CREST; and

	<<(b)>>	an agent for service to receive legal process in the United Kingdom on its behalf.		(b)	an agent for service to receive legal process in the United Kingdom on its behalf.

14.1.8 Accounts			14.1.8 Accounts

Pursuant to the CREST Documents,<< ~~CRESTCo~~Euroclear UK & Ireland>> maintains accounts for CDS as the sponsoring member of CREST and for the<< ~~CREST Link~~Euroclear UK Direct>> Participants as sponsored members of CREST. These accounts are not maintained by CDS, do not form part of the Depository Service, and are not "Accounts" as that term is defined in Rule1.2.1.			Pursuant to the CREST Documents, Euroclear UK & Ireland maintains accounts for CDS as the sponsoring member of CREST and for the Euroclear UK Direct Participants as sponsored members of CREST. These accounts are not maintained by CDS, do not form part of the Depository Service, and are not "Accounts" as that term is defined in Rule1.2.1.

14.1.9 Settlements			14.1.9 Settlements

CREST Transactions are settled through CREST by the delivery of securities and the making of payment in accordance with the CREST Documents. Using its CREST accounts, each<< ~~CREST Link~~Euroclear UK Direct>> Participant may settle Transactions through the facilities of CREST in accordance with the CREST Documents. A<<~~CREST Link~~Euroclear UK Direct>> Participant will not send any instructions regarding an election concerning a right, privilege or benefit attaching to a Security delivered to it through CREST unless it has satisfied any conditions that are required to be met by persons making such an election.			CREST Transactions are settled through CREST by the delivery of securities and the making of payment in accordance with the CREST Documents. Using its CREST accounts, each Euroclear UK Direct Participant may settle Transactions through the facilities of CREST in accordance with the CREST Documents. A Euroclear UK Direct Participant will not send any instructions regarding an election concerning a right, privilege or benefit attaching to a Security delivered to it through CREST unless it has satisfied any conditions that are required to be met by persons making such an election.

14.1.10 <<~~CREST~~ Euroclear UK Direct>> Charges			14.1.10 Euroclear UK Direct Charges

Each <<~~CREST Link~~Euroclear UK Direct>> Participant shall pay all<< ~~CREST~~ Euroclear UK Direct>> Charges upon notice by CDS. Payment of any <<~~CREST~~ Euroclear UK Direct>> Charges shall be without prejudice to the rights of the <<~~CREST Link~~Euroclear UK Direct>> Participant after the payment to an accounting of the amounts properly owing. "<< ~~CREST~~ Euroclear UK Direct>> Charges" means all fees, fines, calls, assessments, taxes and other charges that are made, levied, assessed or imposed in respect of the Participant's use of the <<~~CREST Link~~Euroclear UK Direct>> Service, including:			Each Euroclear UK Direct Participant shall pay all Euroclear UK Direct Charges upon notice by CDS. Payment of any Euroclear UK Direct Charges shall be without prejudice to the rights of the Euroclear UK Direct Participant after the payment to an accounting of the amounts properly owing. "Euroclear UK Direct Charges" means all fees, fines, calls, assessments, taxes and other charges that are made, levied, assessed or imposed in respect of the Participant's use of the Euroclear UK Direct Service, including:

	(a)	charges arising from the delivery of Securities to or from the Participant as a result of a CREST settlement;		(a)	charges arising from the delivery of Securities to or from the Participant as a result of a CREST settlement;

	(b)	charges imposed by CDS,<<~~CRESTCo~~Euroclear UK & Ireland>> or any service provider arising from transactions made by the Participant through the <<~~CREST Link~~Euroclear UK Direct>> Service, including any penalties assessed by<< ~~CRESTCo~~Euroclear UK & Ireland>> under the CREST Documents; and		(b)	charges imposed by CDS, Euroclear UK & Ireland or any service provider arising from transactions made by the Participant through the Euroclear UK Direct Service, including any penalties assessed by Euroclear UK & Ireland under the CREST Documents; and

	(c)	stamp duty, taxes (except taxes measured by income to which CDS or <<~~CRESTCo~~Euroclear UK & Ireland>> is beneficially entitled), other governmental charges, and obligations to deduct or withhold taxes on entitlements and other amounts, arising from the delivery of Securities to or from the Participant as a result of a CREST settlement, with all interest and penalties thereon and additions thereto (other than interest, penalties or additions imposed because of the default of CDS).		(c)	stamp duty, taxes (except taxes measured by income to which CDS or Euroclear UK & Ireland is beneficially entitled), other governmental charges, and obligations to deduct or withhold taxes on entitlements and other amounts, arising from the delivery of Securities to or from the Participant as a result of a CREST settlement, with all interest and penalties thereon and additions thereto (other than interest, penalties or additions imposed because of the default of CDS).

CDS may monitor the<< ~~CREST~~ Euroclear UK Direct >>Charges that are or may become payable by CDS on behalf of a <<~~CREST Link~~Euroclear UK Direct >>Participant, and may require the <<~~CREST Link~~Euroclear UK Direct>> Participant to make a prepayment to CDS in respect of such <<~~CREST~~ Euroclear UK Direct>> Charges if CDS considers such prepayment to be necessary or desirable to protect its interests.			CDS may monitor the Euroclear UK Direct Charges that are or may become payable by CDS on behalf of a Euroclear UK Direct Participant, and may require the Euroclear UK Direct Participant to make a prepayment to CDS in respect of such Euroclear UK Direct Charges if CDS considers such prepayment to be necessary or desirable to protect its interests.

14.1.11 Indemnity			14.1.11 Indemnity

Each <<~~CREST Link~~Euroclear UK Direct>> Participant shall indemnify and hold harmless CDS from and against any loss, damage, cost, expense, assessment, penalty, charge, liability or claim (including the reasonable cost of legal counsel to advise on or defend against such claims) suffered or incurred by or made against CDS as a result of the <<~~CREST Link~~Euroclear UK Direct>> Participant's use of the <<~~CREST Link~~Euroclear UK Direct >>Service or the<< ~~CREST Link~~Euroclear UK Direct >>Participant's sponsored membership of CREST. If any claim is made against CDS by<< ~~CRESTCo~~Euroclear UK & Ireland>> or any other Person in connection with the activities of a <<~~CREST Link~~Euroclear UK Direct>> Participant, then upon notice by CDS the Participant shall make arrangements acceptable to CDS either (i) to pay the claim, or (ii) to contest the claim, provided the <<~~CREST Link~~Euroclear UK Direct>> Participant provides CDS with an indemnity in respect of such proceedings, in form and amount acceptable to CDS. If the <<~~CREST Link~~Euroclear UK Direct >>Participant contests the claim, CDS may permit the<<~~CREST Link~~Euroclear UK Direct>> Participant to take proceedings in the name of CDS to contest such claim at the sole risk and expense of the<<~~CREST Link~~Euroclear UK Direct>> Participant.			Each Euroclear UK Direct Participant shall indemnify and hold harmless CDS from and against any loss, damage, cost, expense, assessment, penalty, charge, liability or claim (including the reasonable cost of legal counsel to advise on or defend against such claims) suffered or incurred by or made against CDS as a result of the Euroclear UK Direct Participant's use of the Euroclear UK Direct Service or the Euroclear UK Direct Participant's sponsored membership of CREST. If any claim is made against CDS by Euroclear UK & Ireland or any other Person in connection with the activities of a Euroclear UK Direct Participant, then upon notice by CDS the Participant shall make arrangements acceptable to CDS either (i) to pay the claim, or (ii) to contest the claim, provided the Euroclear UK Direct Participant provides CDS with an indemnity in respect of such proceedings, in form and amount acceptable to CDS. If the Euroclear UK Direct Participant contests the claim, CDS may permit the Euroclear UK Direct Participant to take proceedings in the name of CDS to contest such claim at the sole risk and expense of the Euroclear UK Direct Participant.