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

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  • 7A.01A Events of Default

    • 7A.01A.1

      On the occurrence of any of the following events, or if the Clearing House in its discretion determines that any of the following events has occurred, the Clearing House may declare an event of default:—

      a. the insufficiency of a Clearing Member's Collateral to discharge such Clearing Member's obligations to the Clearing House; or
      b. the insufficiency of the Collateral of any other Relevant Market, including a Participating Market, available to the Clearing House to fully meet such other Relevant Market's and/or its clearing house's obligations to the Clearing House; or
      c. the insolvency of a Clearing Member (as determined by Rule 7A.01.3), any other Relevant Market which clears the opposite side of any Contract, including a Participating Market, and/or its clearing house or any depository (as defined in Rule 2.35.4); or
      d. conversion, theft, breach of trust, embezzlement, or any other similar cause, caused or suffered by or in connection with a Clearing Member.

      Added on 26 April 2013.

    • 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.

    • 7A.01A.2A Apportionment of Clearing Fund Contributions across Contract Classes and across OTCF Auctions

      a. Where an event of default is deemed to have occurred in more than one Contract Class, the Clearing House First Loss Contribution and Clearing House Intermediate Contribution will be apportioned to each Contract Class in such proportion as the Clearing House will determine. The funds so apportioned will be used in the manner set out in Rule 7A.01A.2 (Clearing Fund Loss Allocation Mechanism) and Rule 7A.01B (Clearing Fund Loss Allocation Mechanism for Default in OTCF Contracts).
      b. Where an event of default is deemed to have occurred, the Clearing Fund Deposit and Further Assessment Amount of each Clearing Member will be apportioned. The Clearing Fund Deposit and Further Assessment Amount deposited by a Clearing Member in respect of OTCF Contracts pursuant to Rules 7A.06.2 and 7A.06.3 will be apportioned to OTCF Contracts. The rest of the Clearing Fund Deposit and Further Assessment Amount deposited by the Clearing Member will be apportioned to the other Contract Classes in such proportion as the Clearing House will determine. The funds so apportioned will be used in the manner set out in Rule 7A.01A.2 (Clearing Fund Loss Allocation Mechanism) and Rule 7A.01B (Clearing Fund Loss Allocation Mechanism for Default in OTCF Contracts).
      c. Where an event of default is deemed to have occurred in OTCF Contracts and there is more than one auction under Rule 7A.02.1.5.b, the part of the Clearing House First Loss Contribution, Clearing House Intermediate Contribution and each Clearing Member's Clearing Fund Deposit and Further Assessment Amount that is apportioned to OTCF Contracts will be further apportioned to each auction. The apportionment will be in such proportion as the Clearing House will determine. The funds so apportioned will be used in the manner set out in Rule 7A.01A.2 (Clearing Fund Loss Allocation Mechanism) and Rule 7A.01B (Clearing Fund Loss Allocation Mechanism for Default in OTCF Contracts).

      Added on 30 June 2014 and amended on 12 November 2018.

    • 7A.01A.3

      Where Clearing Members' Clearing Fund Deposits or Further Assessment Amounts are used and applied in accordance with Rules 7A.01A.2.b, c, d or e, the limits to one or more Clearing Members' liabilities in respect of such funds as set out in Rule 2.28.2A or Rule 7A.06.6.6 may be reached. As a consequence of the foregoing, the contributions of Clearing Members which remain liable in respect of the relevant source of funds may remain unexhausted, while outstanding losses remain following such use and application of the source of funds. In such instances, the following shall apply:

      a. the remaining contributions of Clearing Members in respect of the relevant source of funds shall be applied to meet the outstanding loss, subject to their limits set out in Rule 2.28.2A and Rule 7A.06.6.6; and
      b. the liability of each Clearing Member for such loss shall be determined as described in Rules 7A.01A.2.b, c, d or e, whichever is applicable, subject always to the operation of Rule 7A.06.6.5.

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

    • 7A.01A.4

      If the Clearing House is unable to ascertain any of its losses in relation to a potential Flat Rate adjustment promptly after an event of default, the Clearing House may estimate its loss as if such estimated loss has already been ascertained, and apply the Clearing Fund accordingly. Upon ascertaining its actual loss suffered in relation to a Flat Rate adjustment, the Clearing House will debit or credit the monies to the Clearing Fund accordingly.

      Added on 26 April 2013.

    • 7A.01A.5

      For the purpose of Rules 7A.01A.2.b, c, d, and e, an event of default shall fall within either of the following limbs:

      a. Contracts that are listed for trading on the Exchange or Relevant Market and Non-Relevant Market Contracts; or
      b. [Deleted]
      c. OTCF Contracts

      (each limb a "Contract Class", and collectively, "Contract Classes")

      except as provided in Rules 7A.01A.7 and 7A.01A.9, when an event of default is deemed to fall within (i) any combination of the Contract Classes, or (ii) all of the Contract Classes, as the case may be.

      Added on 26 April 2013 and amended on 12 November 2018.

    • 7A.01A.6

      An event of default shall be deemed to have fallen within a particular Contract Class if the defaulting Clearing Member had open commitment or outstanding obligations to the Clearing House in that Contract Class at the time of such default.

      Added on 26 April 2013.

    • 7A.01A.7

      An event of default that is due to the insufficiency of a Clearing Member's Collateral deposited with, provided to or otherwise made available to the Clearing House to fully discharge such Clearing Member's obligations to the Clearing House, or is due to the insolvency of a Clearing Member, shall be deemed for the purpose of Rules 7A.01A.2.b, c, d and e to have occurred in each Contract Class that Clearing Member was clearing or had open commitment in at the time of default.

      Added on 26 April 2013.

    • 7A.01A.8

      Where an event of default is due to the insufficiency of the Collateral of any other Relevant Market including a Participating Market, available to the Clearing House to fully meet the obligations of such Relevant Market and/or its clearing house to the Clearing House or the insolvency of the other Relevant Market, a default shall be deemed to have occurred in the class of Contracts that are listed for trading on the Exchange or the Relevant Market.

      Added on 26 April 2013.

    • 7A.01A.9

      An event of default that is due to conversion, theft, breach of trust or embezzlement of a Clearing Member, or any other cause shall be deemed to have occurred in each Contract Class that Clearing Member was clearing or had open commitment in at the time of default.

      Added on 26 April 2013.

    • 7A.01A.10

      While application of the Clearing Fund shall be mandatory, the detailed implementation of Rule 7A.05 and 7A.06 shall be the responsibility of the Clearing House.

      Added on 26 April 2013.

    • 7A.01A.11

      Without prejudice to the generality of Chapter 1, the Clearing House shall not be liable to any Clearing Member or any Third Party in respect of any damage, loss, cost or expense of whatsoever nature (whether direct, indirect, special or consequential, including without limitation any loss of business, revenue, goodwill, bargain or profit), suffered or incurred by such Clearing Member or Third Party, arising out of or in connection with the declaration or non-declaration of an event of default by the Clearing House.

      Added on 26 April 2013.