(a) CLS Bank may adjust the Pay-Out Algorithm or make Pay-Outs other than in accordance with the Pay-Out Algorithm under any of the following circumstances:
(i) in response to an emergency affecting the CLS System or as otherwise provided in the Rules;
(ii) if Remedial Action is imposed pursuant to Rule 10.1 (but then only to the extent specified in any such Remedial Action);
(iii) if any blocking or freeze order, injunction, garnishment, attachment or other legal impediment or preclusion to payment exists;
(iv) if an intervening event resulting from a Settlement Disruption Event or any other event described in Rule 1.17 affects CLS Bank, CLS Services, Central Banks, Approved Payment Systems, the Settlement Member’s Nostro Agents or the Settlement Member itself; or
(v) for any other reason, if CLS Bank in its good faith judgment determines it would be impossible, impracticable or inadvisable to proceed with making Pay-Outs in one or more Eligible Currencies in accordance with the Pay-Out Algorithm, including to a particular Settlement Member as a result of an actual or potential Insolvency Event with respect to its Nostro Agent(s).
CLS Bank, when practicable, will notify the applicable Settlement Member when it becomes aware of any such impediment or preclusion to a Pay-Out. CLS Bank shall make such Pay-Out as soon as practicable after CLS Bank concludes, in its sole discretion, that such impediment or preclusion to the Pay-Out no longer exists, and any loss incurred by reason of receiving such Pay- Out shall not constitute a Liability Loss and shall be considered a full discharge of CLS Bank’s payment obligations as if such Pay-Out was made in accordance with the Pay-Out Algorithm. (b) In the event that CLS Bank cannot on a Business Day make a Pay-Out to a Settlement Member in the applicable Eligible Currency because adequate funds in the applicable Eligible Currency are not available in CLS Bank’s relevant Central Bank account and CLS Bank is unable to obtain such funds from Liquidity Facilities in accordance with Rule 8.2, CLS Bank shall make such Pay-Out to the Settlement Member as follows:
(i) if the Settlement Member has specified in its Static Data that, in such
circumstances, it elects to receive a Pay-Out on a Settlement Date in an Eligible Currency other than the one that CLS Bank was expected to deliver on the Settlement Date:
(A) CLS Bank shall, to the extent possible, make the Pay-Out on the Settlement Date in an Eligible Currency or Eligible Currencies (with a then- equivalent value) other than that which CLS Bank was expected to deliver on the Settlement Date;
(B) the Settlement Member agrees to return such Pay-Out (in the same Eligible Currency or Eligible Currencies) on the next subsequent Business Day to CLS Bank (as reflected in the subsequent Pay-In Schedule issued by CLS Bank pursuant to Rule 6.1.2(b));
(C) CLS Bank shall, to the extent possible, make the Pay-Out on that next subsequent Business Day to such Settlement Member in the amount and Eligible Currency that CLS Bank was expected to deliver on the Settlement Date and, to the extent CLS Bank is unable to make such Pay-Out in that Eligible Currency,
CLS Bank shall make such Pay-Out in an Eligible Currency or Eligible
Currencies (with a then-equivalent value) other than that which CLS Bank was expected to deliver on the Settlement Date; and
(D) the Pay-Outs described in paragraph (C) above shall be deemed to discharge fully CLS Bank’s obligation to make a Pay-Out in the Eligible Currency CLS Bank was expected to deliver on the Settlement Date; or (ii) if the Settlement Member has specified in its Static Data that, in such circumstances, it elects not to receive a Pay-Out on a Settlement Date in an Eligible Currency other than the one which CLS Bank was expected to deliver on the Settlement Date:
(A) CLS Bank shall, to the extent possible, make the Pay-Out on the next subsequent Business Day to such Settlement Member in the amount and Eligible Currency that CLS Bank was expected to deliver on the Settlement Date and, to the extent CLS Bank is unable to make such Pay-Out in that Eligible Currency, CLS Bank shall make such Pay-Out in an Eligible Currency or Eligible
Currencies (with a then-equivalent value) other than that which CLS Bank was expected to deliver on the Settlement Date; and
(B) the Pay-Outs described in paragraph (A) above shall be deemed to discharge fully CLS Bank’s obligation to make a Pay-Out in the Eligible Currency CLS Bank was expected to deliver on the Settlement Date.
(c) In the event that CLS Bank performs a Failure Adjustment on a Settlement Member’s Account pursuant to Rule 6.4.1(a), Rule 8.3 or Rule 10.1.2(d) on the Settlement Date, CLS Bank may, to the extent necessary, make Pay-Outs to any Settlement Member in an Eligible Currency or Eligible Currencies other than the one which CLS Bank was expected to deliver on the Settlement Date, and such Pay-Out shall be deemed to discharge fully CLS Bank’s obligation to make a Pay-Out in the Eligible Currency CLS Bank was expected to deliver on the Settlement Date.
(d) A Pay-Out made pursuant to paragraph (b) or (c) above shall be considered a full discharge of CLS Bank’s payment obligations as if such Pay-Out was made in the Eligible Currency CLS Bank was expected to deliver on the Settlement Date; provided, however, that:
(i) any loss incurred by reason of receiving a Pay-Out made pursuant to paragraph (b) or (c) above shall not constitute a Liability Loss except to the extent attributable to the failure of CLS Bank or CLS Services to act or not act in accordance with the CLS Bank Documents as described in the definition of Liability Loss; and
(ii) such discharge shall not affect the liability of any Settlement Member for documented costs incurred by another Settlement Member that received a Pay-Out pursuant to paragraph (b) or (c) above to the extent such Pay-Out was not attributable to the failure of CLS Bank or CLS Services to act or not act in accordance with the CLS Bank Documents as described in the definition of Liability Loss.