Rulebooks: Contents

Rulebooks
Mainboard Rules
Catalist Rules
SGX-ST Rules
CDP Clearing Rules
CDP Settlement Rules
DVP Rules [Entire Rulebook has been deleted]
CDP Depository Rules
Futures Trading Rules
SGX-DC Clearing Rules
Chapter 1 Application of Rules
Chapter 2 Clearing Membership
Chapter 3 Committees
Chapter 4 Enforcement of Rules
Chapter 5 Arbitration
Chapter 6 Delivery and Related Matters
Chapter 7 Clearing and Margins
Chapter 7A Suspension and Default
Chapter 7B Payments
Chapter 8 Mutual Offset System
Chapter 9 Definitions and Interpretation
Chapter 10 Transitional Provisions
Directives
Practice Notes
Appendices
Schedules
SIAC DT Arbitration Rules
SIAC DC Arbitration Rules
Archive
Rule Amendments

7A.01A.2 Clearing Fund Loss Allocation Mechanism

Subject to Rule 7A.06.6.4 (Use of the Clearing Fund in Respect of Events of Default Occurring Within a Multiple Default Period) and Rule 7A.01B (Clearing Fund Loss Allocation Mechanism for Default in OTCF Contracts), and provided that the defaulted Clearing Member's Collateral deposited with or provided to SGX-DC has been fully applied in accordance with Rule 7A.05.01, any loss suffered by the Clearing House arising from or in connection with an event of default shall be met and made good promptly by the use and application of funds from the following sources (collectively known as the "Clearing Fund") in the order of priority hereafter listed, with each source of funds to be completely exhausted, subject to the limitations contained therein, before the next source is applied:—

a. Clearing House First Loss Contribution. The losses in each Contract Class in which the default has occurred will be met with that part of the Clearing House First Loss Contribution that is apportioned to that Contract Class. If the Clearing House First Loss Contribution apportioned to a particular Contract Class is not exhausted, the unexhausted funds will be used and applied to meet any losses that may remain in the other Contract Class(es), after the Clearing House First Loss Contribution apportioned to the other Contract Class(es) have been applied and exhausted.
b. Clearing Fund Deposits of those Clearing Members, excluding any Clearing Member who is insolvent or deemed to be insolvent, which have been active in any of the Contract Classes in which the default has occurred. A Clearing Member is active in a Contract Class if it has:
i. cleared Contracts belonging to that Contract Class during the Relevant Period; or
ii. had an open commitment in Contracts belonging to that Contract Class during the Relevant Period.
A Clearing Member's Clearing Fund Deposit will be used under this Rule 7A.01A.2.b in respect of a Contract Class only if the Clearing Member has been active in that Contract Class. Further, only that part of each such Clearing Member's Clearing Fund Deposit that has been apportioned to the Contract Class will be used in respect of the Contract Class.

Save as provided in Rule 7A.01B (Clearing Fund Loss Allocation Mechanism for Default in OTCF Contracts), a Clearing Member's liability for the loss remaining in a Contract Class will be on a pro-rata basis, calculated as the proportion of its Clearing Fund Deposit requirement for that Contract Class, relative to the aggregate Clearing Fund Deposit requirement for that same Contract Class of all Clearing Members that are active in that Contract Class.

In the event that Clearing Fund Deposits apportioned to a Contract Class are not exhausted pursuant to this Rule 7A.01A.2.b, the unexhausted funds will be used under Rule 7A.01A.2.d to meet any losses that may remain in any other Contract Class(es) in which the event of default occurred.
c. Further Assessment Amounts of those Clearing Members, excluding any Clearing Member who is insolvent or deemed to be insolvent, which have been active (in the manner described in Rule 7A.01A.2.b) in any of the Contract Classes in which the default has occurred.

A Clearing Member's Further Assessment Amount will be used under this Rule 7A.01A.2.c in respect of a Contract Class only if the Clearing Member has been active in that Contract Class. Further, only that part of each such Clearing Member's Further Assessment Amount that has been apportioned to the Contract Class will be used in respect of the Contract Class.

Save as provided in Rule 7A.01B (Clearing Fund Loss Allocation Mechanism for Default in OTCF Contracts), a Clearing Member's liability for the loss remaining in a Contract Class will be on a pro-rata basis, calculated as the proportion of its Further Assessment Amount requirement for that Contract Class, relative to the aggregate Further Assessment Amount requirement for that same Contract Class of all Clearing Members that are active in that Contract Class.

In the event that Further Assessment Amounts apportioned to a Contract Class are not exhausted pursuant to this Rule 7A.01A.2.c, the unexhausted funds will be used under Rule 7A.01A.2.e to meet any losses that may remain in any other Contract Class(es) in which the event of default occurred.
c1. Clearing House Intermediate Contribution. The losses in each Contract Class in which the default has occurred will be met with that part of the Clearing House Intermediate Contribution that is apportioned to that Contract Class. If the funds apportioned to a particular Contract Class are not exhausted, the unexhausted funds will be used and applied to meet any losses that may remain in the other Contract Class(es), after the funds apportioned to the other Contract Class(es) have been applied and exhausted.
d. Clearing Fund Deposits of those Clearing Members, excluding any Clearing Member who is insolvent or deemed to be insolvent, which are not available for use, or which have not been exhausted, pursuant to Rule 7A.01A.2.b.

A Clearing Member's liability for the loss remaining in a Contract Class will be on a pro-rata basis, calculated as the proportion of its Clearing Fund Deposit requirement relative to the aggregate Clearing Fund Deposit requirement of all Clearing Members that have Clearing Fund Deposits available for use under this Rule 7A.01A.2.d.
e. Further Assessment Amounts, of Clearing Members, excluding any Clearing Member who is insolvent or deemed to be insolvent, which are not available for use, or which have not been exhausted, pursuant to Rule 7A.01A.2.c.

A Clearing Member's liability for the loss remaining in a Contract Class will be on a pro-rata basis, calculated as the proportion of its Further Assessment Amount requirement relative to the aggregate Further Assessment Amount requirement of all Clearing Members that have Further Assessment Amounts available for use under this Rule 7A.01A.2.e.
f. Any other contributions to the Clearing Fund.

Added on 26 April 2013 and amended on 29 July 2013, 30 June 2014 and 12 November 2018.