S.L. 370.32 Art. 52Use of clearing, settlement and de- materialised systems and settlement risk.

(1) Where reasonably required by the nature of the assets and of the arrangements whereby the custody function is to be exercised, a depositary may, with the written consent of the scheme and in accordance with the terms and conditions of the depositary agreement entered into with the scheme, the conditions of any investment services licence and such other requirements as may be laid down by the competent authority, make use of any market clearing system, settlement system, dematerialised book entry system, centralised custodial depository or similar system for the purpose of the control of assets in terms of these regulations.

(2) Such systems as are provided for in sub-regulation (1) may also be used to effect all transactions including conveyance, assignment, transfer, transmission and pledging of assets held in custody by the depositary and the law of the country in which the system is maintained shall apply to the validity of such transactions, notwithstanding the provisions of any other law.

(3) The depositary agreement with the scheme shall clearly define the extent of liability of the depositary for any losses that may be incurred by the scheme as a result of the use of such systems.