5825. Account guarantee agreement minimum terms

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    1. An approved written agreement must contain the following minimum terms:

      1. the guarantor is jointly and severally liable for the client’s obligations in the identified accounts and unconditionally guarantees, on an absolute and continuing basis, the prompt payment on demand of all the client’s present and future liabilities in those accounts to the Dealer Member,

      2. the guarantee’s termination requires written notice to the Dealer Member and the termination does not affect the guarantee of any obligations incurred prior to it,

      3. the Dealer Member is not required to demand from, or proceed or exhaust its remedies against, a client or any other person, or any security held to secure payment of the obligations, before making demand or proceeding under the guarantee,

      4. the guarantor’s liability shall not be released, discharged, reduced, limited or otherwise affected by:

        1. any right of set-off, counterclaim, appropriation, application or other demand or right the client or guarantor may have,

        2. any irregularity, defect, or informality in any obligation, document or transaction relating to the client or its accounts,

        3. any acts done, omitted, suffered or permitted by the Dealer Member in connection with the client, its accounts, the guaranteed obligations or any other guarantees or security held including any renewals, extensions, waivers, releases, amendments, compromises or indulgences agreed to by the Dealer Member and including the Dealer Member providing the client’s account statements to the guarantor as permitted in clause 5820(1)(iv), or

        4. the death, incapacity, bankruptcy or other fundamental change of or affecting the client,

        5. but if the guarantor is released from the guarantee, it must remain liable as principal debtor of the guaranteed obligations,

      5. the guarantor must:

        1. agree that the accounts as settled or stated between the Dealer Member and the client are conclusive as to the amounts owing, and

        2. agree not to exercise any rights of subrogation until all guaranteed obligations are paid in full, and

      6. all securities, monies, futures contracts and futures contract options, foreign exchange contracts and other property held or carried by the Dealer Member for the guarantor must be pledged or a security interest granted in them to secure payment of the guaranteed obligations. The Dealer Member must be able to deal with those assets at any time, before or after demand under the guarantee, to satisfy payment.

    5826. - 5829.  Reserved.

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    There is no history log for this rule.