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COB 10.2.2

(1) A CSD must not establish any link with another CSD (CSD link) unless it:

(a) has, prior to establishing the CSD link, identified and assessed potential risks, for itself and its members and other participants using its facilities, arising from establishing such a link:
(b) has adequate systems and controls to effectively monitor and manage, on an on-going basis, the risks identified under (a) above; and
(c) is able to demonstrate to the DFSA, prior to the establishment of the CSD link, that the CSD link satisfies the requirements referred to in (2).

(2) The requirements referred to in (1)(c) are that:

(a) the link arrangement between the CSD and all linked CSDs contains adequate mitigants against possible risks taken by the relevant CSDs, including credit, concentration and liquidity risks, as a result of the link arrangement;
(b) each linked CSD has robust daily reconciliation procedures to ensure that its records are accurate;
(c) if it or another linked CSD uses an intermediary to operate a link with another CSD, the CSD or the linked CSD has adequate systems and controls to measure, monitor, and manage the additional risks arising from the use of the intermediary;
(d) to the extent practicable and feasible, linked CSDs provide for Delivery Versus Payment (DVP) settlement of transactions between participants in linked CSDs and, where such settlement is not practicable or feasible, reasons for non-DVP settlement are notified to the DFSA; and
(e) where interoperable securities settlement systems and CSDs use a common settlement infrastructure, there are:
(i) identical moments established for the entry of transfer orders into the system;
(ii) irrevocable transfer orders; and
(iii) finality of transfers of securities and cash.
[Added] DFSA RM123/2013 (Made 13th June 2013) [VER22/07-13]