CHOM 411

20 March 2006

TO : All Clearing Banks/Institutions

RE : AMENDMENT OF SECTION 20.3 – CHRR

1. In light of the rise in incidence of spurious checks and as a preliminary measure leading towards a comprehensive

review and amendment of the Clearing House Rules and Regulations (CHRR) to match the migration to Check

Imaging, the Board approved at its meeting held on 27 February 2006 the recommendation of the Arbitration

Oversight Committee (AOC) to amend Section 20.3 of the CHRR to include a second paragraph, which should now

read:

20.3 However, the right of the Drawee Bank to recover the amount of the item(s) returned shall remain to be

governed by the general principles of law when the defect(s) are discovered after the “reglementary period”.

To avail of this right of recovery, the drawee claimant must comply by analogy with the procedures prescribed

in Section 21 of the CHRR and CHOM No. 82.

2. This amendment shall take effect immediately.

3. For all participants’ guidance.

CHOM.411.AMENDMENT_OF_SECTION_20

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