Notice and Request for Comments - Material Amendments to CDS Rules Relating to Intellectual Property Rights

Market Regulation Document Type
Canadian Depository for Securities Limited (CDS) rule review

THE CANADIAN DEPOSITORY FOR SECURITIES LIMITED ("CDS")

MATERIAL AMENDMENTS TO CDS RULES

INTELLECTUAL PROPERTY RIGHTS

REQUEST FOR COMMENTS

A. DESCRIPTION OF THE PROPOSED AMENDMENTS

The proposed amendments confirm intellectual property rights in, and permitted uses of, compilations of information that CDS provides to participants to facilitate their use of CDS services. The proposed amendments also impose an obligation on participants to keep CDS information confidential, an obligation that is similar to the existing obligation on CDS to keep participant information confidential.

B. NATURE AND PURPOSE OF THE PROPOSED AMENDMENTS

CDS provides participants and their service providers with compilations of information to facilitate the participant's use of CDS's clearing and settlement services. These compilations comprise general information that participants need and use to interact with CDS (such as data on characteristics of particular securities and events affecting securities). CDS compiles this information from various sources, and the compilations include third party information. In some cases, CDS enters into agreements with third parties that define both the intellectual property rights to the information they provide to CDS and restrictions on use of that information. CDS, in return, needs to ensure that the information it provides to participants complies with CDS's obligations to those third parties.

The amendments add new defined terms, CDS Works and Security Information. CDS Works includes software and networks related to Services (such as CDSX), as well as a list of identified and generic compilations of information that CDS aggregates and creates (such as Bulletins). This list will be added to the Procedures. The definition of Security Information includes information about securities, with the presumption that most of the information is not owned by CDS, but has been compiled by CDS.

Under new Rule 3.8, participants agree that copyright exists in CDS Works and Security Information and CDS or its suppliers own the copyright. CDS grants each participant a licence to use the CDS Works and Security Information, provided such use is restricted to the participant's own use of the services. A participant is not permitted to resell CDS Works and Security Information.

The amendments also define terms, CDS Trade-marks and Other Marks. Under new Rule 3.8, each participant agrees to the terms on which such trade-marks may be used by it in relation to its use of CDS's services.

CDS also provides participants with confidential information. The new confidentiality obligation imposed on participants under new Rule 3.6.3 is similar to the confidentiality obligation imposed on CDS by Rule 3.6.1. The confidentiality obligation applies only to CDS Works and Security Information, or to any other information that CDS marks or discloses orally as being confidential.

C. IMPACT OF THE PROPOSED AMENDMENTS

Participants may use CDS Works and Security Information and information derived from any of them only as part of their use of CDS's services. If participants provide access to CDS Works or Security Information to another person authorized by the participant to act on its behalf (such as a service provider or an affiliate), they will require such persons to comply in writing with the Rules in their use of CDS Works and Security Information. Participants can give information derived from CDS Works and Security Information to their clients or customers on whose behalf the participant uses the services. CDS may require that such clients or customers agree in writing with the Participant to comply with the Rules in their use of CDS Works and Security Information and derived information.

Under the proposed amendments, unless otherwise provided in the Rules, participants agree that they will not:

(i) use CDS Works, Security Information or any information obtained or derived from any of them, for the benefit of any third party or affiliate;

(ii) reproduce, copy or modify CDS Works or Security Information;

(iii) reverse engineer, decompile or create derivative works based on CDS Works or Security Information;

(iv) directly or indirectly sell, license, or disseminate CDS Works or Security Information except to provide information derived from CDS Works and Security Information to the participant's client or customer if such provision is directly related to the use of the services.

D. DESCRIPTION OF THE RULE DRAFTING PROCESS

CDS is recognized as a clearing agency by the Ontario Securities Commission pursuant to Section 21.1 of the Ontario Securities Act and as a self-regulatory organization by the Autorité des marchés financiers pursuant to Section 169 of the Québec Securities Act. In addition CDS is deemed to be the clearing house for CDSX, a clearing and settlement system designated by the Bank of Canada pursuant to Section 4 of the Payment Clearing and Settlement Act. The Ontario Securities Commission, the Autorité des marchés financiers and the Bank of Canada will hereafter be collectively referred to as the "Recognizing Regulators".

Each amendment to the CDS Participant Rules is reviewed by CDS's Legal Drafting Group ("LDG"). The LDG is a committee that includes members of participants' legal and business groups. The LDG's mandate is to advise CDS management and its Board of Directors on rule amendments and other legal matters relating to centralized securities depository and clearing services in order to ensure that they meet the needs of CDS, its participants and the securities industry.

E. IMPACT OF PROPOSED AMENDMENTS ON TECHNOLOGICAL SYSTEMS

There are no anticipated impacts on CDS or its participants technological systems.

F. COMPARISON TO OTHER CLEARING AGENCIES

The Depository Trust Company ("DTC") is reviewing intellectual property rights but due to other priorities, has not put enacted formal rules for its members. Nevertheless, when information is passed to a non-member, it is done so using a non-regulated subsidiary and redistribution is strictly limited.

In the CREST (a United Kingdom settlement system) Terms and Conditions (December, 2005) and CREST Reference Manual, users and participants acknowledge, agree and accept that certain services provided by Crestco (the Central Securities Depository for the United Kingdom market and Irish equities) depend on information from third parties and to restrictions on use of certain types of information, including restrictions on derived information given to any third party, including any subsidiary.

G. PUBLIC INTEREST ASSESSMENT

In analyzing the impact of the proposed amendments to the Participant Rules, CDS has determined that the implementation of these amendments would not be contrary to the public interest.

H. COMMENTS

Comments on the proposed amendments should be in writing and delivered by June 26, 2006 and delivered to:

Jamie Anderson

Senior Legal Counsel

The Canadian Depository for Securities Limited

85 Richmond Street West

Toronto, Ontario M5H 2C9

Fax: 416-365-1984

e-mail: [email protected]

A copy should also be provided to the Ontario Securities Commission by forwarding a copy to:

Cindy Petlock

Manager, Market Regulation

Capital Markets Branch

Ontario Securities Commission

Suite 1903, Box 55,

20 Queen Street West

Toronto, Ontario M5H 3S8

Fax: 416-595-8940

e-mail: [email protected]

CDS will make available to the public, upon request, copies of comments received during the comment period.

I. PROPOSED RULE AMENDMENTS

Appendix "A" contains the text of the current CDS Participant Rules marked to reflect proposed amendments as well as the text of these rules reflecting the adoption of the proposed amendments.

J. QUESTIONS

Questions regarding this notice may be directed to:

Jamie Anderson

Senior Legal Counsel

The Canadian Depository for Securities Limited

85 Richmond Street West

Toronto, Ontario M5H 2C9

Fax: 416-365-1984

e-mail: [email protected]

TOOMAS MARLEY
Chief Legal Officer

 

APPENDIX "A"

PROPOSED RULE AMENDMENTS

Text of CDS Participant Rules marked to reflect proposed amendments

 

Text of CDS Participant Rules reflecting the adoption of proposed amendments

 

Rule 1.2.1 Definitions

 

Rule 1.2.1 Definitions

 

"CDS Trade-marks" means CDS Trade-marks as the term is defined in Rule 3.8.1.

 

"CDS Trade-marks" means CDS Trade-marks as the term is defined in Rule 3.8.1.

 

"CDS Works" means data and information created or compiled by CDS and provided by CDS to the Participant in written, oral or electronic form, as identified in the Procedures, and software, Functions, systems, hardware and networks relating to Services made available by CDS to the Participant.

 

"CDS Works" means data and information created or compiled by CDS and provided by CDS to the Participant in written, oral or electronic form, as identified in the Procedures, and software, Functions, systems, hardware and networks relating to Services made available by CDS to the Participant.

 

"Other Marks" means Other Marks as the term is defined in Rule 3.8.1.

 

"Other Marks" means Other Marks as the term is defined in Rule 3.8.1.

 

"Security Information" means data and information in written, oral or electronic form concerning a Security, including, without limitation, the deposit or withdrawal of a Security, an event related to a Security, the Issuer of a Security, the Security Identifier, or otherwise, which CDS or any of its affiliates or agents records, reports, collects, processes, compiles, creates, publishes, distributes, makes available, provides access to or has in its possession or control at any time.

 

"Security Information" means data and information in written, oral or electronic form concerning a Security, including, without limitation, the deposit or withdrawal of a Security, an event related to a Security, the Issuer of a Security, the Security Identifier, or otherwise, which CDS or any of its affiliates or agents records, reports, collects, processes, compiles, creates, publishes, distributes, makes available, provides access to or has in its possession or control at any time.

 

3.6. CONFIDENTIALITY

 

3.6. CONFIDENTIALITY

 

3.6.1 Confidentiality and Use of Participant Information

 

3.6.1 Confidentiality and Use of Participant Information

 

CDS shall preserve the confidentiality of any information concerning a Participant or provided by a Participant, that becomes known to CDS through the operation of any Service, exercising the same degree of care as it uses with respect to its own confidential information. CDS will not use such information except for operation of the Services. Such confidentiality obligation shall not apply to any information that is or becomes generally available to the public, otherwise than as a result of the breach of this Rule 3.6. Such confidentiality obligation shall not preclude the disclosure of confidential information to any of CDS's officers, directors, employees or agents that is reasonably necessary for the operation of the Services. The obligations of CDS pursuant to this Rule 3.6 shall be in addition to and shall not derogate from any other obligation of confidentiality arising from any agreement or legislation binding on CDS.

 

CDS shall preserve the confidentiality of any information concerning a Participant or provided by a Participant, that becomes known to CDS through the operation of any Service, exercising the same degree of care as it uses with respect to its own confidential information. CDS will not use such information except for operation of the Services. Such confidentiality obligation shall not apply to any information that is or becomes generally available to the public, otherwise than as a result of the breach of this Rule 3.6. Such confidentiality obligation shall not preclude the disclosure of confidential information to any of CDS's officers, directors, employees or agents that is reasonably necessary for the operation of the Services. The obligations of CDS pursuant to this Rule 3.6 shall be in addition to and shall not derogate from any other obligation of confidentiality arising from any agreement or legislation binding on CDS.

 

3.6.2 Release of Participant Information

 

3.6.2 Release of Participant Information

 

Each Participant authorizes CDS to release any information concerning the Participant or provided by a Participant:

 

Each Participant authorizes CDS to release any information concerning the Participant or provided by a Participant:

 

(a)

to the auditors of CDS, of the Participant and of other Participants, as may reasonably be required to perform their duties;

 

(a)

to the auditors of CDS, of the Participant and of other Participants, as may reasonably be required to perform their duties;

 

(b)

to the legal counsel of CDS, as may reasonably be required to perform their duties;

 

(b)

to the legal counsel of CDS, as may reasonably be required to perform their duties;

 

(c)

requested by the Issuer of Securities held for the Participant or by any other Person, if such information is limited to information with respect to the Securities held for the Participant and if CDS is reasonably satisfied that such information is sought for a purpose concerning an effort to influence the voting by Security holders of the Issuer, an offer to acquire Securities of the Issuer or any other matter relating to either the affairs of the Issuer or Transactions in the Securities of the Issuer effected by the Participant, provided that any information released under this subsection (c) does not identify any client or customer of the Participant;

 

(c)

requested by the Issuer of Securities held for the Participant or by any other Person, if such information is limited to information with respect to the Securities held for the Participant and if CDS is reasonably satisfied that such information is sought for a purpose concerning an effort to influence the voting by Security holders of the Issuer, an offer to acquire Securities of the Issuer or any other matter relating to either the affairs of the Issuer or Transactions in the Securities of the Issuer effected by the Participant, provided that any information released under this subsection (c) does not identify any client or customer of the Participant;

 

(d)

as may be required from time to time by order, summons, subpoena, statutory direction or other process of, or pursuant to an agreement with, a court, Regulatory Body or other administrative or regulatory agency, having, in the opinion of CDS, jurisdiction over CDS;

 

(d)

as may be required from time to time by order, summons, subpoena, statutory direction or other process of, or pursuant to an agreement with, a court, Regulatory Body or other administrative or regulatory agency, having, in the opinion of CDS, jurisdiction over CDS;

 

(e)

pursuant to any statutory or regulatory requirement including National Instrument 54-101 Communication with Beneficial Owners of a Reporting Issuer (as it may be reformulated from time to time) or any similar policy, instrument or Rule adopted or made by the Canadian Securities Administrators;

 

(e)

pursuant to any statutory or regulatory requirement including National Instrument 54-101 Communication with Beneficial Owners of a Reporting Issuer (as it may be reformulated from time to time) or any similar policy, instrument or Rule adopted or made by the Canadian Securities Administrators;

 

(f)

to any securities exchange, commodities exchange, alternative trading system, securities depository, securities clearing agency, payment clearing system or self-regulatory organization of which the Participant is a member or the services of which the Participant uses in connection with its participation in CDS, or to any insurer of the Participant including the Canadian Investor Protection Fund or the Canada Deposit Insurance Corporation; and

 

(f)

to any securities exchange, commodities exchange, alternative trading system, securities depository, securities clearing agency, payment clearing system or self-regulatory organization of which the Participant is a member or the services of which the Participant uses in connection with its participation in CDS, or to any insurer of the Participant including the Canadian Investor Protection Fund or the Canada Deposit Insurance Corporation; and

 

(g)

that is in a statistical, summary or other format, provided the information in that format does not specifically identify a particular Participant, or, if the information concerns debt Securities, provided the information in that format does not identify any industry group.

 

(g)

that is in a statistical, summary or other format, provided the information in that format does not specifically identify a particular Participant, or, if the information concerns debt Securities, provided the information in that format does not identify any industry group.

 

CDS shall take all reasonable steps to avoid releasing any information that may identify a particular client or customer of a Participant. When CDS is required pursuant to subsection (d) to disclose confidential information that is directed exclusively to the activities of a particular Participant, CDS shall give notice to the Participant of the request before making the disclosure unless the terms of any applicable statute, regulation, ruling or order prohibit such notice. When CDS releases confidential information pursuant to subsection (f), CDS shall request the recipient to treat such information as confidential.

 

CDS shall take all reasonable steps to avoid releasing any information that may identify a particular client or customer of a Participant. When CDS is required pursuant to subsection (d) to disclose confidential information that is directed exclusively to the activities of a particular Participant, CDS shall give notice to the Participant of the request before making the disclosure unless the terms of any applicable statute, regulation, ruling or order prohibit such notice. When CDS releases confidential information pursuant to subsection (f), CDS shall request the recipient to treat such information as confidential.

 

3.6.3 Confidentiality of CDS Information

 

3.6.3 Confidentiality of CDS Information

 

Each Participant shall preserve the confidentiality of: (i) CDS Works and Security Information; and (ii) any information concerning CDS or provided by CDS, that, at the time of disclosure, is marked as confidential or is disclosed orally as confidential and that becomes known to the Participant through the operation of any Service, or in anticipation of any new service, including any on-going projects, records, data and reports. In preserving such confidentiality, each Participant shall exercise the same degree of care as it uses with respect to its own confidential information. Such confidentiality obligation shall not apply to any information that is or becomes generally available to the public, otherwise than as a result of the breach of this Rule 3.6. Such confidentiality obligation shall not preclude the disclosure of such confidential information to any of Participant's officers, directors, employees or agents that is reasonably necessary: for the use or proposed use of the Services or any new service by the Participant; or for the development or operation of Services or any new service by CDS; or to achieve the purposes for which CDS disclosed the confidential information.

 

Each Participant shall preserve the confidentiality of: (i) CDS Works and Security Information; and (ii) any information concerning CDS or provided by CDS, that, at the time of disclosure, is marked as confidential or is disclosed orally as confidential and that becomes known to the Participant through the operation of any Service, or in anticipation of any new service, including any on-going projects, records, data and reports. In preserving such confidentiality, each Participant shall exercise the same degree of care as it uses with respect to its own confidential information. Such confidentiality obligation shall not apply to any information that is or becomes generally available to the public, otherwise than as a result of the breach of this Rule 3.6. Such confidentiality obligation shall not preclude the disclosure of such confidential information to any of Participant's officers, directors, employees or agents that is reasonably necessary: for the use or proposed use of the Services or any new service by the Participant; or for the development or operation of Services or any new service by CDS; or to achieve the purposes for which CDS disclosed the confidential information.

 

The obligations of each Participant pursuant to this Rule 3.6.3 shall be in addition to and shall not derogate from any other obligation of confidentiality arising from any agreement or legislation binding on the Participant.

 

The obligations of each Participant pursuant to this Rule 3.6.3 shall be in addition to and shall not derogate from any other obligation of confidentiality arising from any agreement or legislation binding on the Participant.

 

CDS authorizes the Participant to release any confidential information concerning CDS:

 

CDS authorizes the Participant to release any confidential information concerning CDS:

 

(a)

to the auditors of the Participant, as may reasonably be required to perform their duties;

 

(a)

to the auditors of the Participant, as may reasonably be required to perform their duties;

 

(b)

to the legal counsel of the Participant, as may reasonably be required to perform their duties; and

 

(b)

to the legal counsel of the Participant, as may reasonably be required to perform their duties; and

 

(c)

as may be required from time to time by order, summons, subpoena, statutory direction or other process of, or pursuant to an agreement with, a court, Regulatory Body or other administrative or regulatory agency, having, in the opinion of the Participant, jurisdiction over the Participant.

 

(c)

as may be required from time to time by order, summons, subpoena, statutory direction or other process of, or pursuant to an agreement with, a court, Regulatory Body or other administrative or regulatory agency, having, in the opinion of the Participant, jurisdiction over the Participant.

 

3.8. RIGHTS AND USES

 

3.8. RIGHTS AND USES

 

3.8.1 CDS Trade-marks

 

3.8.1 CDS Trade-marks

 

The "CDS Trade-marks" are those words and logos identified as such in the Procedures. In addition, certain words, phrases, names, designs, numbers or logos may constitute trade-marks, service marks, trade names, domain names or intellectual property of CDS or other third parties (collectively the "Other Marks"). Nothing in the Rules gives the Participant any right to use the CDS Trade-marks or Other Marks, including without limitation, as part of the name of any of its products or services, except a limited, non-exclusive, revocable and non-transferable right to refer to the fact that the Participant is a participant of CDS or uses or facilitates the use of Services,

 

The "CDS Trade-marks" are those words and logos identified as such in the Procedures. In addition, certain words, phrases, names, designs, numbers or logos may constitute trade-marks, service marks, trade names, domain names or intellectual property of CDS or other third parties (collectively the "Other Marks"). Nothing in the Rules gives the Participant any right to use the CDS Trade-marks or Other Marks, including without limitation, as part of the name of any of its products or services, except a limited, non-exclusive, revocable and non-transferable right to refer to the fact that the Participant is a participant of CDS or uses or facilitates the use of Services,

in which cases the Participant shall display any CDS Trade-mark in special typographical treatment as set out in the Procedures, and shall indicate clearly that it is a trade-mark of and property of CDS. All uses of CDS Trade-marks and Other Marks and all goodwill attached thereto shall enure solely to the benefit of CDS or its respective third party owner. To the extent that any rights or goodwill inadvertently accrue or attach to the Participant in respect of the CDS Trade-marks and Other Marks, the Participant shall hold such rights and goodwill in trust and shall assign such rights and goodwill to CDS or its respective third party owner, if requested.

 

in which cases the Participant shall display any CDS Trade-mark in special typographical treatment as set out in the Procedures, and shall indicate clearly that it is a trade-mark of and property of CDS. All uses of CDS Trade-marks and Other Marks and all goodwill attached thereto shall enure solely to the benefit of CDS or its respective third party owner. To the extent that any rights or goodwill inadvertently accrue or attach to the Participant in respect of the CDS Trade-marks and Other Marks, the Participant shall hold such rights and goodwill in trust and shall assign such rights and goodwill to CDS or its respective third party owner, if requested.

 

Each Participant acknowledges and agrees that it acquires absolutely no rights or licenses in or to the CDS Trade-marks or Other Marks, other than the limited, non-exclusive, revocable and non-transferable right to use that is outlined in this Rule 3.8.1. Any unauthorized use by the Participant of the CDS Trade-marks or Other Marks or any other intellectual property right or proprietary right of CDS is strictly prohibited. Each Participant shall promptly notify CDS of any conflicting use or any act of infringement or passing off which comes to its attention involving the CDS Trade-Marks or Other Marks or any variation or imitation thereof by unauthorized persons. Each Participant shall cooperate with CDS to take any steps CDS considers necessary to prevent further unauthorized use, including but not limited to, cooperating with CDS in any proceedings involving the CDS Trade-marks of Other Marks.

 

Each Participant acknowledges and agrees that it acquires absolutely no rights or licenses in or to the CDS Trade-marks or Other Marks, other than the limited, non-exclusive, revocable and non-transferable right to use that is outlined in this Rule 3.8.1. Any unauthorized use by the Participant of the CDS Trade-marks or Other Marks or any other intellectual property right or proprietary right of CDS is strictly prohibited. Each Participant shall promptly notify CDS of any conflicting use or any act of infringement or passing off which comes to its attention involving the CDS Trade-Marks or Other Marks or any variation or imitation thereof by unauthorized persons. Each Participant shall cooperate with CDS to take any steps CDS considers necessary to prevent further unauthorized use, including but not limited to, cooperating with CDS in any proceedings involving the CDS Trade-marks of Other Marks.

 

3.8.2 Ownership

 

3.8.2 Ownership

 

The Participant acknowledges and agrees: that all right, title and interest in and to the Services, Security Information and CDS Works, including all patents, copyright, trade secrets and other intellectual property rights in any part of the world, are owned by CDS or its suppliers and are protected by Canadian and international copyright and other intellectual property laws; and that copyright subsists in the Services and CDS Works, and in the selection, arrangement and assembly of the content in Services, CDS Works, Security Information,

 

The Participant acknowledges and agrees: that all right, title and interest in and to the Services, Security Information and CDS Works, including all patents, copyright, trade secrets and other intellectual property rights in any part of the world, are owned by CDS or its suppliers and are protected by Canadian and international copyright and other intellectual property laws; and that copyright subsists in the Services and CDS Works, and in the selection, arrangement and assembly of the content in Services, CDS Works, Security Information,

and other information; and that such copyright is owned by CDS or its suppliers. All rights not expressly granted in the Rules are reserved. Each Participant shall promptly notify CDS of any unauthorized use of the Services, CDS Works, Security Information and other information owned by CDS or its suppliers, and agrees to cooperate with CDS and its suppliers to take any steps CDS considers necessary to prevent further unauthorized use, including but not limited to, cooperating with CDS and its suppliers in any proceedings involving the Services, CDS Works, Security Information and other information owned by CDS or its suppliers.

 

and other information; and that such copyright is owned by CDS or its suppliers. All rights not expressly granted in the Rules are reserved. Each Participant shall promptly notify CDS of any unauthorized use of the Services, CDS Works, Security Information and other information owned by CDS or its suppliers, and agrees to cooperate with CDS and its suppliers to take any steps CDS considers necessary to prevent further unauthorized use, including but not limited to, cooperating with CDS and its suppliers in any proceedings involving the Services, CDS Works, Security Information and other information owned by CDS or its suppliers.

 

Each Participant will preserve or reproduce on all records, data and reports (including all copies made by Participant), and will not alter any proprietary, confidential or other notices and legends contained on the originals supplied to Participant by CDS, or as may otherwise be required by CDS.

 

Each Participant will preserve or reproduce on all records, data and reports (including all copies made by Participant), and will not alter any proprietary, confidential or other notices and legends contained on the originals supplied to Participant by CDS, or as may otherwise be required by CDS.

 

Each Participant shall not take any action that purports to create a claim, lien or encumbrance on, or assignment of, any of the Services, CDS Works or Security Information. Any act by the Participant, voluntary or involuntary, purporting to create a claim, lien or encumbrance on, or assignment of, any of the Services, CDS Works or Security Information shall be void.

 

Each Participant shall not take any action that purports to create a claim, lien or encumbrance on, or assignment of, any of the Services, CDS Works or Security Information. Any act by the Participant, voluntary or involuntary, purporting to create a claim, lien or encumbrance on, or assignment of, any of the Services, CDS Works or Security Information shall be void.

 

3.8.3 Use of CDS Works and Security Information

 

3.8.3 Use of CDS Works and Security Information

 

CDS grants each Participant a limited, non-exclusive, revocable, and non-transferable license to use CDS Works and Security Information only for uses directly related to Participant's use of the Services. The Participant shall not use CDS Works or Security Information, or any information obtained or derived from any of them, except in accordance with this license.

 

CDS grants each Participant a limited, non-exclusive, revocable, and non-transferable license to use CDS Works and Security Information only for uses directly related to Participant's use of the Services. The Participant shall not use CDS Works or Security Information, or any information obtained or derived from any of them, except in accordance with this license.

 

If the Participant provides access to or discloses CDS Works or Security Information to a Person authorized by the Participant to act on its behalf in its use of the Services, such as an affiliate, service bureau or third party service provider, then the Participant shall require each such Person to comply in writing with Rules 3.6 and 3.8 in their use of CDS Works and Security Information on behalf of the Participant. If the Participant provides access to or discloses CDS Works, Security Information or any information obtained or derived from any of them to a client or customer receiving services from a Participant, then CDS may require the Participant to enter into a written agreement with each such client or customer requiring each such client or customer to comply with Rules 3.6 and 3.8 in their use of CDS Works, Security Information or any information obtained or derived from any of them.

 

If the Participant provides access to or discloses CDS Works or Security Information to a Person authorized by the Participant to act on its behalf in its use of the Services, such as an affiliate, service bureau or third party service provider, then the Participant shall require each such Person to comply in writing with Rules 3.6 and 3.8 in their use of CDS Works and Security Information on behalf of the Participant. If the Participant provides access to or discloses CDS Works, Security Information or any information obtained or derived from any of them to a client or customer receiving services from a Participant, then CDS may require the Participant to enter into a written agreement with each such client or customer requiring each such client or customer to comply with Rules 3.6 and 3.8 in their use of CDS Works, Security Information or any information obtained or derived from any of them.

 

Except as provided above, the Participant will not:

 

Except as provided above, the Participant will not:

 

(a)

Use, disclose or communicate CDS Works or Security Information or any information obtained or derived from any of them to or for the benefit of any third party or any affiliate of the Participant by any means whatsoever, whether as back-office service provider, outsourcer or wholesaler to any third party or affiliate of the Participant or for the benefit of any joint venture, partnership or sales agency relationship to which the Participant is a party or by which it is bound;

 

(a)

use, disclose or communicate CDS Works or Security Information or any information obtained or derived from any of them to or for the benefit of any third party or any affiliate of the Participant by any means whatsoever, whether as back-office service provider, outsourcer or wholesaler to any third party or affiliate of the Participant or for the benefit of any joint venture, partnership or sales agency relationship to which the Participant is a party or by which it is bound;

 

(b)

reproduce, copy or modify CDS Works or Security Information except as permitted in the Rules or the Procedures;

 

(b)

reproduce, copy or modify CDS Works or Security Information except as permitted in the Rules or the Procedures;

 

(c)

reverse engineer, decompile, disassemble or create derivative works based on the whole or any part of CDS Works or Security Information or any information obtained or derived from any of them; or

 

(c)

reverse engineer, decompile, disassemble or create derivative works based on the whole or any part of CDS Works or Security Information or any information obtained or derived from any of them; or

 

(d)

directly or indirectly sell, rent, lease, license, sublicense, assign, provide access to or transmit or publish, repackage, retransmit, resell or otherwise disseminate or make available CDS Works or Security Information in any medium or manner whatsoever to any third party or any affiliate of the Participant, except to provide information derived from CDS Works or Security Information to a client or customer of a Participant receiving services from the Participant directly related to the Services and the provision of such derived information from CDS Works or Security Information is solely incidental to the services provided to the client or customer by the Participant.

 

(d)

directly or indirectly sell, rent, lease, license, sublicense, assign, provide access to or transmit or publish, repackage, retransmit, resell or otherwise disseminate or make available CDS Works or Security Information in any medium or manner whatsoever to any third party or any affiliate of the Participant, except to provide information derived from CDS Works or Security Information to a client or customer of a Participant receiving services from the Participant directly related to the Services and the provision of such derived information from CDS Works or Security Information is solely incidental to the services provided to the client or customer by the Participant.

 

The Participant will maintain appropriate internal controls, measures and security precautions to prevent unauthorized access to and use of CDS Works and Security Information, exercising the same degree of care as it uses for its own similar restricted or confidential information.

 

The Participant will maintain appropriate internal controls, measures and security precautions to prevent unauthorized access to and use of CDS Works and Security Information, exercising the same degree of care as it uses for its own similar restricted or confidential information.

 

CDS may offer new or enhanced functionality or grant additional rights to use CDS Works and Security Information as set out in the Procedures and User Guides.

 

CDS may offer new or enhanced functionality or grant additional rights to use CDS Works and Security Information as set out in the Procedures and User Guides.

 

3.8.4 Disclaimer

 

3.8.4 Disclaimer

 

Certain Services and CDS Works provided by CDS to the Participants are dependent upon the provision to and use by CDS of information, including Security Information, from third parties. CDS does not guarantee or make any representations or warranties whatsoever, and there are no conditions, express or implied, in fact or in law, with respect to the accuracy, adequacy, timeliness, completeness, sequence, merchantable quality or fitness for any particular purpose of any such information, which is provided on an "as is", "as available" basis.

 

Certain Services and CDS Works provided by CDS to the Participants are dependent upon the provision to and use by CDS of information, including Security Information, from third parties. CDS does not guarantee or make any representations or warranties whatsoever, and there are no conditions, express or implied, in fact or in law, with respect to the accuracy, adequacy, timeliness, completeness, sequence, merchantable quality or fitness for any particular purpose of any such information, which is provided on an "as is", "as available" basis.

 

3.8.5 Verification of Compliance

 

3.8.5 Verification of Compliance

 

Upon reasonable notice, at the request of CDS, a Participant shall within a reasonable time provide to CDS a statement in the form provided by CDS, signed by a Signing Officer on behalf of the Participant, confirming that the Participant's use of Services, CDS Works and Security Information is in compliance with Rules 3.6 and 3.8.

 

Upon reasonable notice, at the request of CDS, a Participant shall within a reasonable time provide to CDS a statement in the form provided by CDS, signed by a Signing Officer on behalf of the Participant, confirming that the Participant's use of Services, CDS Works and Security Information is in compliance with Rules 3.6 and 3.8