1. Every participant shall, in accordance with any conditions and requirements of the Council, make available, or procure that there are made available, sufficient funds on the applicable settlement date for the settlement of any System transaction in respect of which amounts are to be paid by or on behalf of that participant.
2. Where a participant is required to make funds available for the settlement of System transactions and does not make the full amount of such funds available on or before the applicable settlement date the Society may:
(a) refuse to settle any or all System transactions until sufficient funds have been made available; or
(b) apply any funds received from the participant in the pro rata settlement of outstanding System transactions to which it is a party; or
(c) settle any or all System transactions in respect of, on account of or on behalf of the participant.
3. Where the Society settles a System transaction under [2.(c) above], the participant shall on demand pay forthwith to the Society amounts equal to any sums so paid in settlement in respect of, on account of or for the benefit on behalf of that participant, together with (if so demanded) interest thereon charged in accordance with [4. below] and shall indemnify the Society in respect of any interest paid or payable or any charges, expenses or liabilities incurred by the Society by reason of the Society having settled the System transaction, and the Society may bring proceedings to recover the same as a civil debt. All amounts payable pursuant to this sub-paragraph by any participant carrying on an underwriting business shall be treated for all purposes as an expense of that underwriting business.
4. Where the Society refuses to settle any System transaction under [2.(a) above] the Society shall reduce the amount of the entitlements of any participant payable to it pursuant to [Consolidated Requirements Part 2 > General Operational Matters > Central Accounting > Central Accounting System > Settlement of System transactions] by the amount which such participant would have received in respect of such System transaction had it been settled in full. Where the Society makes a pro rata partial settlement of a System transaction under [2.(b) above] the Society shall reduce the amount of the entitlements of any participant payable to it pursuant to [Consolidated Requirements Part 2 > General Operational Matters > Central Accounting > Central Accounting System > Settlement of System transactions] by an amount equal to the amount which such participant would have received in respect of such System transaction had it been settled in full less the amount of the pro rata partial settlement made by the Society.
5. The Society may charge interest on any amount paid under [2.(b) above] from the applicable settlement date until the date of repayment of such amount to the Society. The rate of interest shall be 5 per cent above the then current base lending rate of National Westminster Bank plc (or such other leading bank as the Council may select).
6. Without prejudice to any other powers of the Society or the Council, the Society may treat any sum payable under [3. or 4. above] as a System transaction which may be settled, or brought into settlement, under the System.
7. Without prejudice to the provisions of [Consolidated Requirements Part 2 > General Operational Matters > Central Accounting > Central Accounting System > Saving of rights on termination or exclusion], the rights and liabilities conferred or created by this paragraph shall subsist notwithstanding that the participant in respect of, or on account of or for the benefit of whom a transaction has been settled under subparagraph 2(b) has, if a member of the Society, ceased to be such a member by reason of resignation, death or otherwise or, if not such a member, has ceased to be a participant.