Whole Section

  • Chapter 7 Clearing and Margins

    • 7.01 Clearing House

      • 7.01.1

        The Clearing House shall facilitate the prompt adjustment of contractual obligations arising out of:

        a. Contracts traded on the Exchange or a Relevant Market; and
        b. Non-Relevant Market Contracts
        c. [Deleted]

        insofar as the same are duly accepted by the Clearing House or with respect to which the Clearing House is otherwise obliged to accept and to protect the integrity of such Contracts in accordance with these Rules.

        Amended on 27 March 200627 March 2006, 3 November 20103 November 2010, 8 November 20128 November 2012, 17 July 2019 and 29 July 2022.

      • 7.01.1A

        Further to Rule 7.01.1, the Clearing House shall accept such Contracts traded on a Relevant Market other than the Exchange, as prescribed in Appendix 2.

        Refer to Appendix 2 — Contracts of Other Relevant Markets Accepted by the Clearing House.

        Added on 1 October 20091 October 2009.

      • 7.01.2

        Wherever these Rules and/or the Trading Rules create a right in favour of the Clearing House or impose a liability on the Clearing House, such right or liability shall prior to the Transfer Date be construed as the right or liability of the Exchange, and shall be enforced by or against the Exchange and on or after the Transfer Date, shall be construed as the right or liability of the Clearing House, and shall be enforced by or against the Clearing House.

      • 7.01.4

        The Clearing House shall from time to time prescribe in these Rules the rights and obligations of Clearing Members and all requisite matters in relation to the operation and management of the Clearing House (including but not limited to systems of clearing, deposits, margins, delivery, charges, settlement prices, payments and settlement).

        Amended on 27 March 200627 March 2006.

    • 7.02 Limitation of Liability

      • 7.02.1

        Without prejudice to any other limitation or exclusion of liability (including liability with respect to Contracts liable to delivery as opposed to cash settlement) the liability of the Clearing House shall be limited to net losses to the Clearing Members resulting from the substitution of the Clearing House by way of novation, creation of positions, or as otherwise described in Rule 7.04, in respect of Contracts to which Clearing Members are party and/or, where the opposite side of the Contract is cleared through any other Relevant Market (or its clearing house), to net losses in connection with the substitution of such other Relevant Market (or its clearing house) for members of the same or its clearing house. This shall include the substitution of a Participating Market (or where relevant its clearing house) for members of the same or its clearing house pursuant to the Mutual Offset System. Without prejudice to the generality of the foregoing or to the provisions in Chapter 1, the Clearing House shall not be liable for obligations of a Clearing Member to any Third Party including a non-member of the Clearing House, obligations of a Clearing Member to another Clearing Member who is acting for him as broker or obligations to a Customer by a Clearing Member, nor shall the Clearing House become liable to make deliveries whether from any Third Party or any Clearing Member.

        Amended on 1 October 2009 and 29 July 2022.

    • 7.02A Registration of Non-Relevant Market Transactions, NLT transactions, EFP transactions and EFS transactions

      Amended on 8 November 20128 November 2012 and 19 September 201619 September 2016.

      • 7.02A.1 Non-Relevant Market Transactions, NLT transactions, EFP transactions and EFS transactions

        7.02A.1.1 Only Non-Relevant Market Transactions, NLT transactions, EFP transactions and EFS transactions which meet the following criteria will be eligible for registration with the Clearing House:
        a. a transaction:
        i. which falls under one of the classes of Eligible Non-Relevant Market Contracts; or
        ii. in respect of a Contract listed on the Exchange or the Connect Contract which has been designated by the Exchange for NLT transactions and which meets the minimum volume thresholds, conditions and other procedures prescribed by the Exchange or the Clearing House from time to time; or
        iii. in respect of a Contract listed on the Exchange for EFP transactions and EFS transactions which meets the procedures prescribed by the Exchange from time to time; and
        b. a transaction where:
        i. the Seller and the Buyer have satisfied the credit and position thresholds prescribed by their respective Clearing Members; or
        ii. notwithstanding that either the Seller or the Buyer has not, its Clearing Member has signified its agreement to clear the transaction.
        Once the criteria in Rule 7.02A.1.1 are satisfied, the Clearing Members acting for the Seller and the Buyer respectively shall be responsible for the relevant transaction as principals to the Clearing House.
        7.02A.1.2 If a Non-Relevant Market Transaction, a NLT transaction, a EFP transaction or a EFS transaction does not fulfill the criteria in Rule 7.02A.1.1, and is rejected by the Clearing House for clearing, the transaction shall be deemed not to have been submitted to the Clearing House and will be dealt with in accordance with any terms agreed between the Seller and the Buyer.
        7.02A.1.3 The specifications of Eligible Non-Relevant Market Contracts including Contract size, Contract Month, trading hours, underlying asset, exercise price, minimum price fluctuation, last trading day, settlement basis and method of exercise shall be set out in Circulars issued by the Clearing House from time to time.

        Added on 27 March 200627 March 2006 and amended on 28 November 200828 November 2008, 3 November 20103 November 2010, 8 November 20128 November 2012, 19 September 201619 September 2016, 24 June 201924 June 2019 and 29 July 2022.

      • 7.02A.2 Registration of Non-Relevant Market Transactions, NLT transactions, EFP transactions and EFS transactions

        7.02A.2.1 Non-Relevant Market Transactions, NLT transactions, EFP transactions and EFS transactions will be registered with the Clearing House for clearing through the Trade Registration System or other facility as prescribed by the Clearing House. A complete submission for registration will be accepted or rejected by the Clearing House as quickly after submission as would be technologically practicable if fully automated systems were used.
        7.02A.2.2 A Non-Relevant Market Transaction, a NLT transaction, a EFP transaction and a EFS transaction may only be registered by:
        a. [Deleted]
        b. a Clearing Member acting for a Seller and a Clearing Member acting for a Buyer; or
        c. such other party authorised by either Clearing Member and approved by the Clearing House.
        7.02A.2.3 [Deleted]
        7.02A.2.4 Any party using the Trade Registration System, or other facility prescribed by the Clearing House, shall comply with the terms and conditions governing the access to and operation of that system, as varied, amended, or supplemented from time to time.
        7.02A.2.5 A Clearing Member acting for a Seller or Buyer, as the case may be, must submit to the Clearing House the name of each party referred to in Rule 7.02A.2.2 who is authorised to register Non-Relevant Market Transactions, NLT transactions, EFP transactions or EFS transactions on the behalf of such Clearing Member.
        7.02A.2.6 A Clearing Member acting for a Seller or Buyer, as the case may be, shall obtain the consent of such Seller or Buyer, before allowing any party referred to in Rule 7.02A.2.2 to register Non-Relevant Market Transactions, NLT transactions, EFP transactions or EFS transactions on the behalf of such Clearing Member.
        7.02A.2.7 Each registration of a Non-Relevant Market Transaction, a NLT transaction, a EFP transaction or a EFS transaction, in order to be complete, must specify:
        a. the type(s) of Eligible Non-Relevant Market Contract(s) which the Non-Relevant Market Transaction falls under, or the Connect Contract, or the Contract listed on the Exchange to which the NLT transaction, EFP transaction or EFS transaction relates;
        b. the expiry month;
        c. the quantity;
        d. the price;
        e. the Clearing Member(s) acting for the Buyer and Seller;
        f. the Seller's account number (which may only be specified by a Clearing Member acting for a Seller or such party that the Clearing Member authorises) and the Buyer's account number (which may only be specified by a Clearing Member acting for a Buyer or such party that the Clearing Member authorises); and
        g. such other particulars as may be prescribed by the Clearing House from time to time.
        All particulars required by this rule must be specified correctly and accurately.
        7.02A.2.8 [Deleted]
        7.02A.2.9 For each Non-Relevant Market Transaction, NLT transaction, EFP transaction or EFS transaction, (a) complete registration as set out in Rule 7.02A.2.7 and (b) where applicable, the signifying of a Clearing Member's agreement to the clearing of a trade as set out in Rule 7.02A.1.1.b.ii must be carried out by the timelines set out below:
        i. For a transaction concluded in a "T" trading session on a Trading Day: No later than thirty (30) minutes after the "T" session closes.
        ii. For a transaction concluded in a "T+1" trading session on a Trading Day: No later than thirty (30) minutes after the "T session" on the next Trading Day closes.
        7.02A.2.9A Clearing Members are required to ensure that all trades are submitted for registration in a timely manner.
        7.02A.2.10 A Clearing Member acting for a Seller shall assume the duties and obligations of the Seller, as principal to the Clearing House, for any Non-Relevant Market Transaction, NLT transaction, EFP transaction or EFS transaction that is eligible for registration pursuant to Rule 7.02A.1.1 and that has been registered by any of the parties in Rule 7.02A.2.2.
        7.02A.2.11 A Clearing Member acting for a Buyer shall assume the duties and obligations of the Buyer, as principal to the Clearing House, for any Non-Relevant Market Transaction, NLT transaction, EFP transaction or EFS transaction that is eligible for registration pursuant to Rule 7.02A.1.1 and that has been registered by any of the parties in Rule 7.02A.2.2.
        7.02A.2.12 In allowing the submission of a Non-Relevant Market Transaction for registration through the Trade Registration System or other facility as prescribed by the Clearing House, the Seller and Buyer of such Non-Relevant Market Transaction shall be deemed to have mutually agreed (i) to substitute their contract for a contract based on the specifications referred to in Rule 7.02A.1.3, and (ii) for the Clearing House to become the central counterparty to the Clearing Members in whose names such Non-Relevant Market Transaction has been registered pursuant to Rule 7.04.

        In allowing the submission of a NLT transaction, a EFP transaction or a EFS transaction for registration through the Trade Registration System or other facility as prescribed by the Clearing House, the Seller and Buyer of such transaction shall be deemed to have mutually agreed for the Clearing House to become the central counterparty to the Clearing Members in whose names the transaction has been registered, pursuant to Rule 7.04.
        7.02A.2.13 Once a Non-Relevant Market Transaction that is eligible for registration pursuant to Rule 7.02A.1.1 has been submitted for registration, the terms of the Non-Relevant Market Transaction shall be final and a Clearing Member shall be bound by the terms of the Non-Relevant Market Transaction registered in its name.

        The Clearing House shall not be responsible for confirming the terms of such Non-Relevant Market Transaction.
        7.02A.2.14 In the event of any technical fault that prevents or inhibits access and/or use of the Trade Registration System for registration of Non-Relevant Market Transactions, NLT transaction, EFP transaction or EFS transaction by any Clearing Member(s), the Clearing House may, in its absolute discretion, and in circumstances which it deems appropriate, allow for registration by such other means as it may prescribe.
        7.02A.2.15 If the Clearing House exercises its discretion pursuant to Rule 7.02A.2.14:
        a. The Clearing House will inform all Clearing Members of this decision by issuance of a circular or by such other means as the Clearing House deems appropriate; and
        b. The Clearing House may vary or waive the timelines for registration as set out in Rule 7.02A.2.9.
        7.02A.2.16 Any loss or inhibition of access and/or use of the Trade Registration System which is due to any technical faults arising from or caused by a Clearing Member's own equipment, system, device or market facility will not be considered sufficient ground for the Clearing House to exercise its discretion under Rule 7.02A.2.14.
        7.02A.2.17 Factors which the Clearing House may consider in the exercise of its discretion include:
        a. the number of Clearing Members which are affected by the technical fault;
        b. the estimated length of time required to resolve the technical fault;
        c. the impact of the technical fault on the ability of the Clearing House to operate a safe and efficient clearing facility; and/or
        d. any other factor which the Clearing House deems relevant.
        7.02A.2.18 Clearing Members shall produce to the Clearing House, if requested, evidence of compliance with this Rule 7.02A.2.

        Added on 27 March 200627 March 2006 and amended on 28 November 200828 November 2008, 3 November 20103 November 2010, 8 November 20128 November 2012, 31 December 201331 December 2013, 19 September 201619 September 2016, 24 June 201924 June 2019 and 29 July 2022.

    • 7.03A Collateral

      • 7.03A.1 Trust Arrangements

        7.03A.1.1 Subject to all rights and remedies of the Clearing House against or in respect of Collateral under this Rules, the Security Deed and the SFA, Collateral held by or otherwise deposited with or provided to the Clearing House shall be held on trust by the Clearing House for the benefit of:
        a. Clearing Members, except where such Collateral is held by or otherwise deposited with or provided to the Clearing House solely in respect of Customer Contracts; and
        b. the relevant customers of the Clearing Member pursuant to the SFA, where such Collateral is held by or otherwise deposited with or provided to the Clearing House solely in respect of Customer Contracts.
        7.03A.1.2 The Clearing House shall have the right to commingle any or all Collateral held by or otherwise deposited with or provided to it by Clearing Members, except where such Collateral is held by or otherwise deposited with or provided to the Clearing House solely in respect of Customer Contracts, in the same account.
        7.03A.1.3 The Clearing House shall have the right to commingle any or all Collateral held by or otherwise deposited with or provided to it by Clearing Members solely in respect of Customer Contracts, except where such Collateral is Cleared Swaps Customer Collateral, in the same account.
        7.03A.1.4 The Clearing House shall have the right to commingle any or all Cleared Swaps Customer Collateral held by or otherwise deposited with or provided to it by FCM Clearing Members in the same account.

        Added on 26 April 201326 April 2013 and amended on 31 December 201331 December 2013.

      • 7.03A.2 Security Deed

        Prior to the Clearing House commencing any clearing activities in respect of any Clearing Member, the Clearing Member shall execute and deliver a Security Deed in the form and on terms prescribed by the Clearing House, setting out the terms under which its Collateral are provided to, and held by, the Clearing House.

        Added on 26 April 201326 April 2013.

      • 7.03A.3 General Lien

        Without prejudice and in addition to any Security Interest or other right or remedy which the Clearing House may have under this Rules, contract, law or equity, and subject to any applicable restrictions pursuant to the provisions of the SFA and/or imposed by the Authority, the Clearing House shall have a lien on all Collateral deposited with or provided to the Clearing House and on any other monies and/or assets of the Clearing Member which may be or become available to the Clearing House.

        Added on 26 April 201326 April 2013.

      • 7.03A.4 Collateral Deposit

        A Clearing Member shall deposit or otherwise provide to the Clearing House such Collateral, in such acceptable form and denomination as may be prescribed by the Clearing House from time to time, and may deposit or otherwise provide to the Clearing House Collateral in excess of the amount required by the Clearing House, subject to such terms and conditions prescribed by the Clearing House from time to time.

        Added on 26 April 201326 April 2013 and amended on 31 December 201331 December 2013.

      • 7.03A.5 Collateral Withdrawal

        7.03A.5.1 Where any obligation under this Rules, the Security Deed or as may otherwise be owing to the Clearing House remains outstanding on the part of a Clearing Member, such Clearing Member shall have no right to withdraw any Collateral or request for the repayment of any credit balance held with or subject to the control of the Clearing House without the Clearing House's prior consent.
        7.03A.5.2 Any withdrawal of Collateral consented to by the Clearing House under this Rule shall not be deemed to be a release of the existing or future Security Interest over any remaining Collateral held with or subject to the control of the Clearing House, other than the withdrawn Collateral.
        7.03A.5.3 A request for withdrawal of Collateral may only be made by a Clearing Member subject to Rule 7.03A.5.1. Without prejudice to Rule 2.18.3, a Third Party may not withdraw or request for the withdrawal of any Collateral held with or subject to the control of the Clearing House, other than through the Third Party's Clearing Member. All Collateral permitted by the Clearing House to be withdrawn shall be returned only to the Clearing Member.
        7.03A.5.4 In the case of a defaulted or suspended FCM Clearing Member, any unused Collateral withdrawn and returned to such FCM Clearing Member is intended to be treated in accordance with applicable U.S. laws, including the U.S. Bankruptcy Code, the CEA and the CFTC Regulations.

        Added on 26 April 201326 April 2013 and amended on 31 December 201331 December 2013.

      • 7.03A.6 Valuation of Collateral

        7.03A.6.1 The Clearing House shall value such Collateral as it deems appropriate. The Clearing House shall, at its sole discretion, determine (i) what monies and/or assets will be acceptable as Collateral and (ii) when will such monies and/or assets cease to be acceptable as Collateral, and determine the valuation to be attributed thereto.
        7.03A.6.2 If any Collateral deposited or provided by any Clearing Member is found in any way to be unacceptable by the Clearing House, the Clearing House shall have the right to immediately give a zero value to such Collateral for the purposes of satisfying such Clearing Members' obligations under this Rules or as may otherwise be owing to the Clearing House, pursuant to which such Collateral was deposited or provided.
        7.03A.6.3 Following revaluation of any Collateral deposited with or provided to the Clearing House, where such Collateral is found by the Clearing House to be insufficient to meet any obligation of the Clearing Member under this Rules or as may otherwise be owing to the Clearing House, pursuant to which such Collateral was deposited or provided, the Clearing Member shall deposit with or provide to the Clearing House such additional Collateral as may be required to meet such obligation, within such time as the Clearing House may require.
        7.03A.6.4 In the event of any dispute as to any matters covered in this Rule, the Clearing House's decision shall be final and binding.

        Added on 26 April 201326 April 2013.

      • 7.03A.7 Investment and Use of Collateral

        7.03A.7.1 The Clearing House may invest, manage and use Collateral in such manner as it shall deem fit, provided that:
        a. Collateral in respect of Customer Contracts shall be invested in accordance with this Rules, the Security Deed, the SFA and any applicable laws; and
        b. the Clearing House shall not use any Collateral received and notified to it as Collateral in respect of a Customer Contract to settle any obligations that are incurred in relation to a House Contract, except in accordance with this Rules, the Security Deed, the SFA and any applicable laws.
        c. the Clearing House shall not use any Collateral received and notified to it as Collateral in respect of an Affiliate Contract to settle any obligations that are incurred in relation to a House Contract that is not an Affiliate Contract, except in accordance with this Rules, the Security Deed, the SFA and any applicable laws.
        7.03A.7.2 Each Clearing Member shall secure contractual waivers in favour of the Clearing Member from its Customers waiving their respective rights to all interest and investment earnings from the Collateral held with or otherwise provided to the Clearing House in respect of Customer Contracts, in the form and manner as may be prescribed by the Clearing House, as may be necessary to give effect to the Clearing House's rights in relation to interest and fees under Rule 7.03A.8.
        7.03A.7.3 All Collateral deposited or provided by each Clearing Member to the Clearing House shall be subject to this Rules, the Security Deed, the SFA (each as amended or supplemented from time to time) and any applicable laws. Each Clearing Member shall ensure that all Collateral deposited or provided to the Clearing House are deposited or provided only on the foregoing basis and shall also ensure that, prior to depositing or providing any Collateral to the Clearing House for the account or for the Contracts of any person, such person has been notified of and has accepted the foregoing.

        Added on 26 April 201326 April 2013 and amended on 31 December 201331 December 2013 and 2 May 20162 May 2016.

      • 7.03A.8 Fees and Interest

        7.03A.8.1 The Clearing Member shall pay the Clearing House such administrative fees as may be prescribed by the Clearing House and notified to the Clearing Member from time to time for the investment and management of the Collateral. Administrative fees may be deducted from the investment earnings arising from or in connection with the Collateral or paid directly to the Clearing House as determined by the Clearing House.
        7.03A.8.2 Unless otherwise provided for in this Rules, the Clearing House shall pay the Clearing Member interest on the Collateral at such rate and in such manner as prescribed by the Clearing House and notified to a Clearing Member.
        7.03A.8.3 Except as set forth in this Rule, the Clearing House shall have no obligation to make payment of any other fees, interest and investment earnings arising from or in connection with the Collateral to any person.

        Added on 26 April 201326 April 2013.

      • 7.03A.9 Safekeeping Indemnity

        7.03A.9.1 Any Collateral accepted by Clearing House shall be deposited with the appropriate custodian(s) designated by the Clearing House for safekeeping in a Clearing House account for House Contracts or in a Clearing House account for Customer Contracts, as the case may be, and the Clearing House shall retain control over such Collateral.
        7.03A.9.2 The Clearing House shall not have any obligation or responsibility to preserve, protect, collect or realise, and under no circumstances shall the Clearing House be liable for any loss or diminution in value or depreciation in or in connection with, the Collateral maintained pursuant to this Rule.
        7.03A.9.3 A Clearing Member who maintains Collateral with the Clearing House pursuant to this Rule shall indemnify and hold the Clearing House harmless from any loss, damage, costs, charges and/or expenses of whatsoever nature and howsoever arising ("Loss") suffered or incurred by the Clearing House to any designated custodian which may result from or arise with respect to:
        a. any act, delay or omission in connection with Collateral (whether by such Clearing Member or the Clearing House) deposited with such designated custodian; or
        b. any contract or agreement between the Clearing House and any designated custodian, or any representation, warranty or undertaking given by the Clearing House to any designated custodian, in relation to or otherwise in connection with Collateral deposited with such designated custodian, provided that this indemnity shall not cover any Loss and/or liability of the Clearing House attributable or referable to the gross negligence or wilful misconduct of the Clearing House or any of the Clearing House's officers, agents and/or employees.
        7.03A.9.4 If any loss of Collateral occurs, or any Collateral becomes unavailable to the Clearing House, such that any obligation of the Clearing Member under this Rules or as may otherwise be owing to the Clearing House, pursuant to which such Collateral was deposited or provided, cannot be sufficiently met as determined by the Clearing House, the Clearing Member shall deposit with or provide to the Clearing House such additional Collateral as may be required to meet such obligation, within such time as the Clearing House may require.

        Added on 26 April 201326 April 2013.

      • 7.03A.10 Regulatory Information

        Clearing Members shall provide the Clearing House with any information necessary in relation to such Collateral deposited with or provided to the Clearing House to enable the Clearing House to meet its reporting obligations to the Authority and/or other relevant governmental or regulatory authorities or for any other regulatory purposes, including but not limited to for withholding tax purposes.

        Added on 26 April 201326 April 2013.

      • 7.03A.11 Permitted Depositories for Cleared Swaps Customer Collateral

        7.03A.11.1 The Clearing House shall deposit Cleared Swaps Customer Collateral with a permitted depository in accordance with the CFTC Regulations and ensure that the Cleared Swaps Customer Collateral is segregated in accordance with the CEA and CFTC Regulations. The Cleared Swap Customer Account and Cleared Swaps Customer Collateral shall be part of the cleared swaps account class for the purposes of Part 190 of the CFTC Regulations.
        7.03A.11.2 Each FCM Clearing Member shall maintain written records of the authorisation of each Cleared Swaps Customer for the deposit of its Cleared Swaps Customer Collateral outside of the United States with a permitted depository in accordance with Rule 7.03A.11.1.

        Added on 31 December 201331 December 2013.

    • 7.04 Substitution

      • 7.04.1 Relevant Market Trades (other than trades matched on Connect Market)

        7.04.1.1 Relevant Market trades (other than trades matched on Connect Market) cleared by two Clearing Members

        When a contract matched on a Relevant Market (other than trades matched on Connect Market) is cleared through the Clearing House by two Clearing Members, upon matching of the contract on the Relevant Market (other than trades matched on Connect Market), the original contract between the Clearing Members shall be discharged and replaced with two separate and distinct Contracts as described below, both of which are on the same terms as the original contract:
        a. the Clearing Member who assumes the position of the buyer shall enter into a Contract with the Clearing House, which assumes the position of the seller, and
        b. the Clearing Member who assumes the position of the seller shall enter into a Contract with the Clearing House, which assumes the position of the buyer.
        7.04.1.2 The events described under Rule 7.04.1.1 shall be deemed not to have taken place if the Clearing House has received corrupt or unreadable data in respect of the original contract, or if the original contract is based on a series that is not eligible for clearing. Clearing Members will be notified in such instances.
        7.04.1.3 Relevant Market trades (other than trades matched on Connect Market) cleared by a Clearing Member and a clearing member of another Relevant Market or its clearing house

        Subject to Rule 7.04.1.4, when a contract matched on a Relevant Market (other than trades matched on Connect Market) is cleared by a Clearing Member and a clearing member of a Relevant Market or its clearing house (other than the Clearing House), the original contract shall be discharged and replaced with two separate and distinct Contracts as described below, both of which are on the same terms as the original contract:
        a. a Contract between the Clearing Member and Clearing House, wherein:
        i. the Clearing House assumes the position of the buyer if the Clearing Member assumes the position of the seller, and conversely,
        ii. the Clearing House assumes the position of the seller if the Clearing Member assumes the position of the buyer; and
        b. a Contract between the Relevant Market (or its clearing house) and the Clearing House, wherein:
        i. the Relevant Market (or its clearing house) assumes the position of the buyer if the Clearing House assumes the position of the seller, and conversely,
        ii. the Relevant Market (or its clearing house) assumes the position of the seller if the Clearing House assumes the position of the buyer.
        7.04.1.4 The events described under Rule 7.04.1.3 shall take place only upon the occurrence of the following:
        a. matching of the original contract on the Relevant Market (other than trades matched on Connect Market); and
        b. confirmation by the Relevant Market (or its clearing house) that it will enter into the Contract described in Rule 7.04.1.3.b.
        7.04.1.5 Notwithstanding Rule 7.04.1.4, the events described under Rule 7.04.1.3 shall be deemed not to have taken place if the Clearing House has received corrupt or unreadable data in respect of the original contract, or if the original contract is based on a series that is not eligible for clearing. Clearing Members will be notified in such instances.

        Amended on 27 March 200627 March 2006, 22 September 200622 September 2006, 26 January 200726 January 2007, 3 November 20103 November 2010, 8 November 20128 November 2012, 26 April 201326 April 2013 and 29 July 2022.

      • 7.04.1B Trades matched on Connect Market

        7.04.1B.1 Trades matched on Connect Market cleared by two Clearing Members

        When a Connect Contract matched on a Connect Market is to be cleared by two Clearing Members of the Clearing House, upon matching of the Connect Contract on the Connect Market, two separate and distinct Contracts will be created as described below, both of which based on the same terms as the original Connect Contract:
        a. the Clearing Member who assumes the position of the buyer shall enter into a Contract with the Clearing House, which assumes the position of the seller, and
        b. the Clearing Member who assumes the position of the seller shall enter into a Contract with the Clearing House, which assumes the position of the buyer.
        7.04.1B.2 Clearing Members shall at all times be solely liable to the Clearing House in respect of all clearing and settlement obligations arising out of the Contracts created in Rule 7.04.1B.1.
        7.04.1B.3 Trades matched on Connect Market cleared by a Clearing Member and where only one of the counterparties to the trade is a Clearing Member

        When a Connect Contract matched on a Connect Market is to be cleared by a Clearing Member and where only one of the counterparties to the trade is a Clearing Member, upon matching of the Connect Contract on the Connect Market, two separate and distinct Contracts will be created as described below, both of which based on the same terms as the original Connect Contract:
        a. a Contract between the Clearing Member and Clearing House, wherein:
        i. the Clearing House assumes the position of the buyer if the Clearing Member assumes the position of the seller, and conversely,
        ii. the Clearing House assumes the position of the seller if the Clearing Member assumes the position of the buyer; and
        b. a Contract between the Connect Broker and the Clearing House, wherein:
        i. the Connect Broker assumes the position of the buyer if the Clearing House assumes the position of the seller, and conversely,
        ii. the Connect Broker assumes the position of the seller if the Clearing House assumes the position of the buyer.
        7.04.1B.4 Clearing Members and the Connect Broker shall at all times be solely liable to the Clearing House in respect of all clearing and settlement obligations arising out of the Contracts created in Rule 7.04.1B.3.
        7.04.1B.5 The events described under Rule 7.04.1B shall be deemed not to have taken place if the Clearing House has received corrupt or unreadable data in respect of the original contract, or if the original contract is based on a series that is not eligible for clearing, or such trades are cancelled by the Connect Exchange or not cleared by the Connect Counterparty. Clearing Members will be notified in such instances.

        Added on 29 July 2022.

      • 7.04.2 Off Market Trades (other than NLT transactions for Connect Contracts)

        7.04.2.1 Non-Relevant Market Transactions, EFP transactions, EFS transactions and NLT transactions (other than NLT transactions for Connect Contracts) cleared by two Clearing Members

        When a Non-Relevant Market Transaction, EFP transaction, EFS transaction or NLT transaction (other than NLT transactions for Connect Contracts) that is eligible for registration pursuant to Rule 7.02A.1.1 and that is registered pursuant to Rule 7.02A.2 between two Clearing Members is cleared through the Clearing House, upon the Clearing House issuing to the Clearing Members a Notice of Novation that the transaction has been accepted for clearing, the original contract between the Clearing Members shall be discharged and replaced with two separate and distinct Contracts as described below, both of which are on the same terms as the original contract:
        a. the Clearing Member who assumes the position of the buyer shall enter into a Contract with the Clearing House, which assumes the position of the seller, and
        b. the Clearing Member who assumes the position of the seller shall enter into a Contract with the Clearing House, which assumes the position of the buyer.
        A "Notice of Novation" for the purpose of Rule 7.04.2 means a "BD4" message or such other message that the Clearing House may inform Clearing Members will be used in place of a "BD4" message.
        7.04.2.2 [Deleted]
        7.04.2.3 [Deleted]
        7.04.2.4 EFP transactions, EFS transactions and NLT transactions (other than NLT transactions for Connect Contracts) cleared by a Clearing Member and a clearing member of another Relevant Market (or its clearing house)

        When an EFP transaction, EFS transaction or NLT transaction (other than NLT transactions for Connect Contracts) that is eligible for registration pursuant to Rule 7.02A.1.1 and that is registered pursuant to Rule 7.02A.2 between a Clearing Member and a clearing member of a Relevant Market or its clearing house (other than the Clearing House) is cleared through the Clearing House, upon the Clearing House issuing to the Clearing Member and clearing member a Notice of Novation that the transaction has been accepted for clearing, the original contract shall be discharged and replaced with two separate and distinct Contracts as described below, both of which are on the same terms as the original contract:
        a. a Contract between the Clearing Member and Clearing House, wherein:
        i. the Clearing House assumes the position of the buyer if the Clearing Member assumes the position of the seller, and conversely,
        ii. the Clearing House assumes the position of the seller if the Clearing Member assumes the position of the buyer; and
        b. a Contract between the Relevant Market (or its clearing house) and the Clearing House, wherein:
        i. the Relevant Market (or its clearing house) assumes the position of the buyer if the Clearing House assumes the position of the seller, and conversely,
        ii. the Relevant Market (or its clearing house) assumes the position of the seller if the Clearing House assumes the position of the buyer.
        7.04.2.5 [Deleted]

        Amended on 1 October 20091 October 2009, 26 April 201326 April 2013, 19 September 201619 September 2016, 17 July 201917 July 2019 and 29 July 2022.

      • 7.04.2A Off Market Trades for Connect Contracts

        7.04.2A.1 NLT transactions for Connect Contracts cleared by two Clearing Members

        When a NLT transaction for Connect Contracts that is eligible for registration pursuant to Rule 7.02A.1.1 and that is registered pursuant to Rule 7.02A.2 between two Clearing Members is cleared through the Clearing House, upon the Clearing House issuing to the Clearing Members a Notice of Novation that the transaction has been accepted for clearing, the original contract between the Clearing Members shall be discharged and replaced with two separate and distinct Contracts as described below, both of which are on the same terms as the original contract:
        a. the Clearing Member who assumes the position of the buyer shall enter into a Contract with the Clearing House, which assumes the position of the seller, and
        b. the Clearing Member who assumes the position of the seller shall enter into a Contract with the Clearing House, which assumes the position of the buyer.
        A "Notice of Novation" for the purpose of Rule 7.04.2A means a "BD4" message or such other message that the Clearing House may inform Clearing Members will be used in place of a "BD4" message.

        Added on 29 July 2022.

      • 7.04.3 Transfers

        7.04.3.1 Mutual Offset System transfers

        When an open position in a Designated Futures Contract is transferred from a clearing member of any other Participating Market (or its clearing house) to a Clearing Member pursuant to Rule 8.03.1.3, upon such transfer being effective, two separate and distinct Contracts shall be created on the same terms as the open position:
        a. a Contract between the Clearing Member and Clearing House, wherein:
        i. the Clearing House assumes the position of the buyer if the Clearing Member assumes the position of the seller, and conversely,
        ii. the Clearing House assumes the position of the seller if the Clearing Member assumes the position of the buyer; and
        b. a Contract between the Participating Market (or its clearing house) and the Clearing House, wherein:
        i. the Participating Market (or its clearing house) assumes the position of the buyer if the Clearing House assumes the position of the seller, and conversely,
        ii. the Participating Market (or its clearing house) assumes the position of the seller if the Clearing House assumes the position of the buyer.
        7.04.3.2 Transfers for consolidation between two Clearing Members

        Subject to Rule 7.04.3.3, when an open position is transferred from a Clearing Member to an appointed Clearing Member pursuant to Rule 6.05.2 for the purpose of consolidation, the original Contract in respect of the open position shall be discharged and replaced by a separate and distinct Contract between the appointed Clearing Member and the Clearing House on the same terms as the original Contract, as described below:
        a. the Clearing House assumes the position of the buyer if the appointed Clearing Member assumes the position of the seller, and conversely,
        b. the Clearing House assumes the position of the seller if the appointed Clearing Member assumes the position of the buyer.
        7.04.3.3 The events described under Rule 7.04.3.2 shall take place only upon the occurrence of the following:
        a. Confirmation by the appointed Clearing Member's Settlement Bank of the Payment Instruction in respect of the margin call received by the Clearing Member pursuant to the first margin cycle run following the transfer, or, if no such margin call is received, the end of that margin cycle; or
        b. the posting of Performance Deposits as prescribed in Rule 6.02A.7B, due pursuant to Rule 6.07.1 or the relevant Contract Specifications, by the appointed Clearing Member,
        whichever is applicable, or if both Rule 7.04.3.3.a and Rule 7.04.3.3.b are applicable, only upon the later in time occurrence of the matters described in Rule 7.04.3.3.a and Rule 7.04.3.3.b.
        7.04.3.4 Transfers for consolidation from a clearing member of another Relevant Market (or its clearing house) (other than the Connect Market) to a Clearing Member

        Subject to Rule 7.04.3.5, when an open position is transferred from a clearing member of any other Relevant Market (or its clearing house) (other than the Connect Market) to a Clearing Member pursuant to Rule 6.05.2 for the purpose of consolidation, two separate and distinct Contracts shall be created on the same terms as the open position:
        a. a Contract between the Clearing Member and Clearing House, wherein:
        i. the Clearing House assumes the position of the buyer if the Clearing Member assumes the position of the seller, and conversely,
        ii. the Clearing House assumes the position of the seller if the Clearing Member assumes the position of the buyer; and
        b. a Contract between the Relevant Market (or its clearing house) and the Clearing House, wherein:
        i. the Relevant Market (or its clearing house) assumes the position of the buyer if the Clearing House assumes the position of the seller, and conversely,
        ii. the Relevant Market (or its clearing house) assumes the position of the seller if the Clearing House assumes the position of the buyer.
        7.04.3.5 The events described under Rule 7.04.3.4 shall take place only upon the later in time occurrence of the following:
        a. Confirmation by the Clearing Member's Settlement Bank of the Payment Instruction in respect of the margin call received by the Clearing Member pursuant to the first margin cycle run following the transfer, or if no such margin call is received, the end of that margin cycle; and
        b. confirmation by the Relevant Market (or its clearing house) that it will enter into the Contract described in Rule 7.04.3.4.b.
        7.04.3.6 Transfers for consolidation from a Clearing Member to a clearing member of another Relevant Market (or its clearing house) (other than the Connect Market)

        Subject to Rule 7.04.3.7, when an open position is transferred from a Clearing Member to a clearing member of any other Relevant Market (or its clearing house) (other than the Connect Market) pursuant to Rule 6.05.2 for the purpose of consolidation, the Contract between the Clearing Member and the Clearing House in respect of the open position shall be terminated.
        7.04.3.7 The event described under Rule 7.04.3.6 shall take place only upon the confirmation by the other Relevant Market (or its clearing house) that it will enter into a contract with its clearing member in respect of such open position.
        7.04.3.8 Transfers pursuant to Rule 7.28 from a clearing member of another Relevant Market (or its clearing house) (other than the Connect Market) to a Clearing Member

        Subject to Rule 7.04.3.9, when an open position is transferred from a clearing member of any other Relevant Market (or its clearing house) (other than the Connect Market) to a Clearing Member pursuant to Rule 7.28 at the request of a Customer, two separate and distinct Contracts shall be created on the same terms as the open position:
        a. a Contract between the Clearing Member and Clearing House, wherein:
        i. the Clearing House assumes the position of the buyer if the Clearing Member assumes the position of the seller, and conversely,
        ii. the Clearing House assumes the position of the seller if the Clearing Member assumes the position of the buyer; and
        b. a Contract between the Relevant Market (or its clearing house) and the Clearing House, wherein:
        i. the Relevant Market (or its clearing house) assumes the position of the buyer if the Clearing House assumes the position of the seller, and conversely,
        ii. the Relevant Market (or its clearing house) assumes the position of the seller if the Clearing House assumes the position of the buyer.
        7.04.3.9 The events described under Rule 7.04.3.8 shall take place only upon the later in time occurrence of the following:
        a. Confirmation by the Clearing Member's Settlement Bank of the Payment Instruction in respect of the margin call received by the Clearing Member pursuant to the first margin cycle run following the transfer, or, if no such margin call is received, the end of that margin cycle; and
        b. confirmation by the Relevant Market (or its clearing house) that it will enter into the Contract described in Rule 7.04.3.8.b.
        7.04.3.10 Transfers pursuant to Rule 7.28 from a Clearing Member to a clearing member of another Relevant Market (or its clearing house) (other than the Connect Market)

        Subject to Rule 7.04.3.11, when an open position is transferred from a Clearing Member to a clearing member of any other Relevant Market (or its clearing house) (other than the Connect Market) pursuant to Rule 7.28 at the request of a Customer, the Contract between the Clearing Member and the Clearing House in respect of the open position shall be terminated.
        7.04.3.11 The event described under Rule 7.04.3.10 shall take place only upon the later in time occurrence of the following:
        a. Confirmation by the Clearing Member's Settlement Bank of the Payment Instruction in respect of the margin call received by the Clearing Member pursuant to the first margin cycle run following the transfer, or, if no such margin call is received, the end of that margin cycle; and
        b. confirmation by the other Relevant Market (or its clearing house) that it will enter into a contract with its clearing member in respect of such open position.
        7.04.3.12 Transfers from a defaulted/suspended Clearing Member to a designated Clearing Member

        Subject to Rule 7.04.3.13, when an open position is transferred from a defaulted or suspended Clearing Member to a designated Clearing Member pursuant to Rule 7A.02.1.1, the original Contract in respect of the open position shall be discharged and replaced by a separate and distinct Contract between the designated Clearing Member and the Clearing House on the same terms as the original Contract, as described below:
        a. the Clearing House assumes the position of the buyer if the appointed Clearing Member assumes the position of the seller, and conversely,
        b. the Clearing House assumes the position of the seller if the appointed Clearing Member assumes the position of the buyer.
        7.04.3.13 The events described under Rule 7.04.3.12 shall take place only upon Confirmation by the designated Clearing Member's Settlement Bank of the Payment Instruction in respect of the margin call received by the designated Clearing Member pursuant to the first margin cycle run following the transfer, or, if no such margin call is received, the end of that margin cycle.
        7.04.3.14 Transfers pursuant to Rule 7.27 between two Clearing Members

        Subject to Rule 7.04.3.15, when an open position is transferred from a Clearing Member ("Original Party") to another Clearing Member ("New Party") pursuant to Rule 7.27, excluding Rule 7.27.1.5, the original Contract between the Original Party and the Clearing House in respect of the open position shall be discharged and replaced by a separate and distinct Contract between the New Party and the Clearing House on the same terms as the original Contract, as described below:
        a. the Clearing House assumes the position of the buyer if the New Party assumes the position of the seller, and conversely,
        b. the Clearing House assumes the position of the seller if the New Party assumes the position of the buyer.
        For the purposes of Rule 7.04.3.14, "Original Party" and "New Party" shall be as defined herein.
        7.04.3.15 The events described under Rule 7.04.3.14 shall take place only upon:
        a. where both Clearing Members receive margin call pursuant to the first margin cycle run following the transfer: the later in time Confirmation by the Clearing Members' Settlement Bank(s) of the Payment Instructions in respect of the margin calls; or
        b. where only one Clearing Member receives margin call pursuant to the first margin cycle run following the transfer: Confirmation by that Clearing Member's Settlement Bank of the Payment Instruction in respect of that margin call; or
        c. where neither Clearing Member receives margin call pursuant to the first margin cycle run following the transfer: the end of that margin cycle.
        7.04.3.16 Transfers pursuant to Rule 7.27.1.5 for order fill/give-up from a Clearing Member or a clearing member of another Relevant Market (or its clearing house) (other than the Connect Market) to another Clearing Member

        Subject to Rule 7.04.3.17, when an open position is transferred for the purpose of filling an order or as a give-up by a Clearing Member or a clearing member of another Relevant Market (or its clearing house) (other than the Connect Market) ("Original Party") to another Clearing Member ("New Party") pursuant to Rule 7.27.1.5, the original Contract between the Original Party and the Clearing House in respect of the open position shall be discharged and replaced by a separate and distinct Contract between the New Party and the Clearing House on the same terms as the original Contract, as described below:
        a. the Clearing House assumes the position of the buyer if the New Party assumes the position of the seller, and conversely,
        b. the Clearing House assumes the position of the seller if the New Party assumes the position of the buyer.
        For the purposes of Rule 7.04.3.16, "Original Party" and "New Party" shall be as defined herein.
        7.04.3.17 The events described under Rule 7.04.3.16 shall take place only if they occur on the same trading day as the creation of the open position and only upon the approval of the transfer by the Clearing House.

        Amended on 27 March 200627 March 2006, 22 September 200622 September 2006, 1 October 20091 October 2009, 7 August 20127 August 2012, 26 April 201326 April 2013 and 29 July 2022.

      • 7.04.5 Options exercise

        7.04.5.1 Upon the exercise of an option Contract by or on behalf of a Clearing Member or, as the case may be, by the Clearing House or upon the deemed exercise of such option Contract pursuant to this Rules or the rules of the Relevant Market at which the option Contract was traded, the option Contract shall be replaced by an open Contract in the underlying under the terms specified in the option Contract at the strike price or at some other price in accordance with the terms of such option Contract.
        7.04.5.2 Upon the assignment of an option Contract by the Clearing House, the option Contract shall be replaced by an open Contract in the underlying under the terms specified in the option Contract at the strike price or at some other price in accordance with the terms of such option Contract.

        Amended on 16 July 201216 July 2012 and 26 April 201326 April 2013.

      • 7.04.6

        Nothing in these Rules shall be regarded, treated or otherwise interpreted as limiting, diminishing, modifying or otherwise affecting the relationship between the Clearing House and a Clearing Member, which, when Contracts have been accepted by the Clearing House, and as between the Clearing House and the Clearing Member, is and is deemed to be, as principals to one another.

      • 7.04.7

        Nothing in these Rules shall be regarded, treated or otherwise interpreted as obliging or requiring the Clearing House to recognise any right or entitlement of any Third Party (in so far as such right or entitlement is contrary to the provisions in Chapter 1 of this Rules or Rule 7.04).

    • 7.04A Registration of an NLT, EFP or EFS in Respect of Contracts Listed on a Relevant Market

      • 7.04A.1

        With regard to an NLT, EFP or EFS in respect of any Contract listed for trading on a Relevant Market (other than the Connect Contracts) to be cleared through the Clearing House, Clearing Members shall comply with requirements for the registration of such NLT, EFP or EFS, as set forth in the rules of the Relevant Market.

        Added on 1 October 20091 October 2009 and Amended on 29 July 2022.

      • 7.04A.2

        With regard to an NLT in respect of the Connect Contracts, Clearing Members shall comply with requirements for the registration of NLT transactions, as set forth in Rule 7.02A.

        Added on 29 July 2022.

    • 7.06 Offset by Liquidation

      • 7.06.1

        A Clearing Member long or short any Contract to the Clearing House as a result of substitution may liquidate the position by acquiring an appropriate opposite position.

    • 7.07 Offset not Automatic

      • 7.07.1

        When a Clearing Member buys and sells or (vis-à-vis the Clearing House) is deemed to buy and sell Contracts for the same series and such Contracts are cleared through the Clearing House, the purchases and sales are not automatically offset one against the other where the relevant account is a gross position account. Transactions can only be offset against one another by complying the rules of the Relevant Market(s) at which they were effected and by submission of a close out request to the Clearing House by the relevant Clearing Member.

        Amended on 7 December 20097 December 2009.

      • 7.07.1A

        When a Clearing Member buys and sells or (vis-à-vis the Clearing House) is deemed to buy and sell Contracts for two different fungible series and such Contracts are cleared through the Clearing House, such transactions can only be offset against one another by complying with the rules of the Relevant Market(s) at which they were effected and by submission of a close out request to the Clearing House by the relevant Clearing Member.

        Added on 7 December 20097 December 2009.

    • 7.07A Invoicing Back of Open Positions to the Clearing House

      • 7.07A.1

        Where open positions are invoiced back to the Clearing House by any other Relevant Market (or clearing house) relating to a Contract subject to physical delivery prior to the matching process in Rule 6.02A.7, the Clearing House may invoice the positions back to Clearing Members holding appropriate positions (whether reported back to the Clearing House as being House or Customer positions) as at the date of such invoicing back, on a pro-rata basis, calculated as the proportion of such positions of each Clearing Member at the date of such invoicing back relative to the aggregate value of such open positions held by all non-defaulting Clearing Members (to be rounded down or up if the number of lots is not a whole number at the Clearing House's absolute discretion). Invoicing back shall be carried out by the Clearing House effecting and registering opposite positions between itself and each of the affected Clearing Members and thereupon settling such open positions against such opposite positions, at a price determined by the Clearing House. The Clearing House's actions, including the timing of the invoicing back and the price determined by the Clearing House shall be binding on all affected Clearing Members.

        Added on 1 October 20091 October 2009.

    • 7.08 False Information

      • 7.08.1

        Without prejudice to the right and power of the Clearing House at the cost and expense of the Clearing Member concerned to effect such rectification or correction measures otherwise, no Clearing Member shall place any false or inaccurate entries on any other submission or otherwise provide false or inaccurate information in any document submitted to the Clearing House for clearing purposes.

        Violation of this Rule may constitute a major offence.

    • 7.09 Position Change Sheets

      • 7.09.1

        Position change sheets must be submitted to the Clearing House each trading day by the time specified by the Clearing House. Position change sheets shall be in such form as prescribed by the Clearing House. When requested, the identification of accounts will be made available to the Clearing House.

        Amended on 3 November 20103 November 2010 and 17 July 201917 July 2019.

    • 7.10 Recap Ledger

      • 7.10.1

        The Clearing House will produce a recap ledger for each Clearing Member which will itemise, among other things, the incoming positions in respect of any Contract; the position changes the closing positions in respect of any Contract; the net settlements, pay or collect, margins required, the current margin balance, and the net debit balance(s) payable by the Clearing Member and/or credit balance(s) payable by the Clearing House.

        The net debit balance(s) reflected on the recap ledger, excluding those arising from margin withdrawals ("Net Debit Balance(s)") and the net credit balance(s) reflected on the recap ledger, excluding those arising from margin deposits and calls ("Net Credit Balance(s)") shall be payable in accordance with Rule 7.14.

        Amended on 3 November 20103 November 2010 and 26 April 201326 April 2013.

      • 7.10.2

        If a Clearing Member believes that there is any error in the recap ledger, the Clearing Member must immediately notify the Clearing House in writing and in any event, no later than 5 p.m. on the following Business Day.

        Violation of this Rule may constitute a major offence.

    • 7.11 Daily Settlement Price

      • 7.11.1

        The daily settlement price of a Contract shall be determined:

        7.11.1.1 in Non-Relevant Market Contracts, by using price data from market participants or derived from pricing models, as selected or established by the Clearing House from time to time; and

        Refer to Practice Note 7.11.1.1.
        7.11.1.2 in all other Contracts (other than Connect Contracts), in accordance with the relevant formula and procedures applicable to each Contract, as determined by the Clearing House. In arriving at such formula, the Clearing House may, in consultation with the Exchange, take into account factors, including but not limited to:
        a. the last traded price;
        b. bid and offer spread at the close of market; and
        c. price data derived from pricing models, as selected or established by the Clearing House from time to time.
        7.11.1.3 in the Connect Contracts, in accordance with the relevant formula and procedures, as determined by the Clearing House.

        Amended on 27 March 200627 March 2006, 22 September 200622 September 2006, 3 November 20103 November 2010, 8 November 20128 November 2012, 17 July 201917 July 2019 and 29 July 2022.

      • 7.11.2

        Notwithstanding the foregoing, the Clearing House shall reserve the right to amend the settlement prices of any Contract for the purposes of settlement under this Rules if it so deems necessary.

        Amended on 22 September 200622 September 2006.

    • 7.12 Settlement to Settlement Price Daily

      • 7.12.1

        When a Clearing Member is long or short any amount of any Contract at the end of the day, as indicated by the recap ledger prepared by the Clearing House, settlement shall be made with the Clearing House to the settlement price for that day, and such Clearing Member shall be liable to pay to, or entitled to collect from, the Clearing House any loss or profit, as the case may be, represented by the difference between the price at which the Contract was bought or sold and the settlement price of the Contract at the end of the day.

      • 7.12.2

        Such settlement must be paid in cash in the respective currencies of the Contracts, or such other currency as the Clearing House may prescribe in the interest of a safe and efficient clearing facility, and at such exchange rate as determined by the Clearing House. Without prejudice to the generality of the foregoing, the Clearing House may refer to exchange rates published by data vendors in determining the relevant exchange rates.

        Amended on 26 April 201326 April 2013.

      • 7.12.3

        After making such settlement with the Clearing House, such Clearing Member shall be deemed long or short (or long and short) such Contract, as the case may be, at the settlement price of the day.

      • 7.12.4

        Notwithstanding the foregoing, the Clearing House shall not be required to pay any profit to a Clearing Member in the event that such Clearing Member fails to meet any required settlement or margin call for that day with the Clearing House.

      • 7.12.5

        This Rule 7.12 shall not apply to trading in options contracts in respect of which the following shall apply.

      • 7.12.6

        Except for payment of relevant premiums on establishment of an option contract, no variation payments are thereafter required to be made from or to the Clearing House.

      • 7.12.7

        In respect of the payment of relevant premiums on establishment of an option contract as referred to in Rule 7.12.6, such payment must be paid in cash in the respective currencies of the options contract, or such other currency as the Clearing House may prescribe in the interest of a safe and efficient clearing facility, and at such exchange rate as determined by the Clearing House. Without prejudice to the generality of the foregoing, the Clearing House may refer to exchange rates published by data vendors in determining the relevant exchange rates.

        Added on 26 April 201326 April 2013.

    • 7.13 Settlement Variation for Contracts Cleared by the Clearing House

      Amended on 8 November 20128 November 2012 and 29 July 2022.

      • 7.13.1

        The Clearing House may prescribe an adjustment to the Settlement Variation if, in the Clearing House’s opinion, it is necessary to address a change in the underlying that fundamentally affects the pricing of a Contract. Any adjustments will be specified by the Clearing House in a Circular. A Clearing Member would be liable for or entitled to an adjustment, as the case may be, in respect of its open positions in a relevant Contract.

        Added on 27 March 200627 March 2006, 8 November 20128 November 2012 and amended on 8 June 20208 June 2020.

      • 7.13.2

        No interest shall be payable by the Clearing House on any amount that has to be refunded to a Clearing Member as a result of any such adjustment to the Settlement Variation.

        Added on 27 March 200627 March 2006.

      • 7.13.3

        Settlement Variation and adjustments to Settlement Variation (where relevant) as calculated and/or determined at such times as the Clearing House shall determine, must be paid in cash.

        Amended on 27 March 200627 March 2006.

    • 7.14 Net Debit Balances and Credit Balances

      Amended on 26 April 201326 April 2013.

      • 7.14.1

        If the recap ledger of any Clearing Member shows a Net Debit Balance against such Clearing Member:

        (a) and if it appears to the Clearing House that the Clearing Member will have insufficient cash margin held by the Clearing House to apply towards payment of the Clearing Member's Net Debit Balance, the Clearing Member shall receive margin call and be required to deposit additional cash collateral to cover the shortage in such cash margin;
        (b) payment of such New Debit Balance shall be effected at the Confirmation Cut Off Time, by the Clearing House applying the Clearing Member's cash margin held with the Clearing House towards payment of such Net Debit Balance. If, at the Confirmation Cut Off Time, the Clearing Member has insufficient cash margin held with the Clearing House to apply towards payment of the full Net Debit Balance, all of such cash margin will, at the Confirmation Cut Off Time, be applied towards payment of such portion of the Net Debit Balance as it covers; and
        (c) such application shall constitute final and irrevocable settlement of the Clearing Member's obligation to pay such Net Debit Balance or such portion of the Net Debit Balance (as the case may be) to the Clearing House.

        Violation of this Rule may constitute a major offence.

        Added on 3 November 20103 November 2010 and amended on 26 April 201326 April 2013.

      • 7.14.2

        If the recap ledger of any Clearing Member shows a Net Credit Balance in favour of such Clearing Member payment of such Net Credit Balance shall be effected at the Confirmation Cut Off Time, by the Clearing House crediting the Net Credit Balance directly to the Clearing Member's cash margin held with the Clearing House. Such crediting shall constitute final and irrevocable settlement of the Clearing House's obligation to pay such Net Credit Balance to the Clearing Member.

        Added on 3 November 20103 November 2010 amended on 26 April 201326 April 2013.

      • 7.14.3

        "Confirmation Cut Off Time", in relation to the Net Debit Balance or the Net Credit Balance shown in the recap ledger of any Clearing Member shall, for the purposes of this Rule 7.14, mean the cut-off time for Confirmation in respect of any margin call that may be made in that recap ledger, as notified by the Clearing House to Clearing Members.

        Added on 26 April 201326 April 2013.

    • 7.16 Reports of Large Positions

      • 7.16.1

        Clearing Members shall submit to the Clearing House a daily report of Customers' Accounts and House Accounts, with details of such large positions in relation to such contracts as the Clearing House may prescribe (whether assumed or entered into on any Relevant Market or elsewhere). Such daily reports shall be submitted to the Clearing House by such time and/or in such manner as may be prescribed by the Clearing House.

        Such report shall be in such form as the Clearing House may prescribe from time to time and shall include but not be limited to the account numbers and the number of open contracts in each month for a Commodity and, in the case of options, in each expiration month for a put or call option, in which any person owns or controls open positions in a single Contract Month or contract month or Delivery Month of any Commodity that equals or exceeds the reporting level for such Commodity or option prescribed from time to time by the Clearing House.

        Amended on 22 September 200622 September 2006 and 7 December 20107 December 2010.

      • 7.16.2

        The Clearing House shall be entitled to require reports from one or more Clearing Members in relation to any contract even if the number of positions (whether assumed or entered into on any Relevant Market or elsewhere) owned or controlled is below the reporting level presently prescribed by the Clearing House.

        Amended on 7 December 20107 December 2010.

      • 7.16.3

        Subject to Rule 7.16.4 below, Clearing Members shall identify the owner and any controlling parties for any account or ensure that such information is made available directly to the Clearing House within such time as the Clearing House may prescribe.

        Amended on 27 March 200627 March 2006.

      • 7.16.4

        Upon request of the Clearing House, Clearing Members shall obtain the information required by this Rule regarding the ownership and control of positions (whether assumed or entered into on any Relevant Market or elsewhere) within any Omnibus Account and any Sub-Account of any Omnibus Account. Provided that if the Omnibus Account Holder does not want the identity of any Sub-Account holder (save for a Cleared Swaps Customer, whose identity must always be disclosed) to be disclosed to its carrying Clearing Member, the Omnibus Account Holder may apply to the Clearing House for a special identification for the Sub-Account thereof for reporting positions (whether assumed or entered into on any Relevant Market or elsewhere) covered within this Rule through its carrying Clearing Member.

        Amended on 31 December 201331 December 2013.

      • 7.16.5

        Violation of this Rule may constitute a major offence.

      • 7.16.6

        The Clearing House shall be entitled to disclose the contents of any reports made under this Rule to the Exchange or to any other Relevant Market or its clearing house in so far as such information relates to Contracts traded on the Relevant Market.

        Amended on 1 October 20091 October 2009.

    • 7.17 Speculative Long and Short Positions; Same Contract Month

      • 7.17.1

        Clearing Members shall not be permitted to carry a speculative long position and a speculative short position for any Third Party or for themselves in the case of futures contracts, in the same Commodity for the same Contract Month and in the case of options contracts, in the same Commodity, for the same class, for the same Contract Month and for the same strike price.

        Amended on 27 March 200627 March 2006, 22 September 200622 September 2006 and 17 July 201917 July 2019.

      • 7.17.2

        The Clearing House may require any Clearing Member to liquidate any or all positions in any Contract belonging to any person concurrently holding a speculative long position and a speculative short position in such Contract.

        Added on 1 October 20091 October 2009.

      • 7.17.3

        Rule 7.17.1 shall not apply if the concurrent long and short speculative positions result from a transfer under Rule 7.27 and such concurrent long and short speculative positions do not extend beyond the Trading Day on which the transfer is reported to the Clearing House.

        Added on 1 October 20091 October 2009.

    • 7.18 Right to Set-Off

      Amended on 26 April 201326 April 2013.

      • 7.18.1

        Without prejudice to the generality of the foregoing, in addition to any Security Interest or other right or remedy which the Clearing House may have under this Rules, contract, law or equity, and subject to any applicable restrictions pursuant to the provisions of the SFA and/or imposed by the Authority, the Clearing House may at any time consolidate any or all accounts (notwithstanding that relevant positions in such accounts have not been closed out) of the Clearing Member and set-off and/or transfer and/or apply any Collateral in such account towards satisfaction of any liabilities of the Clearing Member to the Clearing House, whether or not:

        7.18.1.1 such Collateral and liabilities are denominated in the same currency; and
        7.18.1.2 such liabilities are due, owing or incurred, or joint or several.

        Amended on 26 April 201326 April 2013.

    • 7.19 Clearing House Margins

      • 7.19.1

        All margins deposited with or provided to the Clearing House by Clearing Members shall be retained by the Clearing House in whole or in part, as the Clearing House may deem necessary but, subject to this Rules (in particular, Rule 7.03A.3, 7.03A.5, Rule 7.18 and Rule 7A.05.1) and the Security Deed, may be returned to the Clearing Member when the positions for which such margins have been deposited or provided have been liquidated. Notwithstanding the foregoing, the Clearing House may retain margins for freight forward contracts for tanker voyage routes in relation to any potential Flat Rate adjustment, even after the positions of the Clearing Member have been liquidated.

        Amended on 27 March 200627 March 2006, 7 August 20127 August 2012 and 26 April 201326 April 2013.

    • 7.20 Margin Amounts

      • 7.20.1 Acceptable Margin

        Margin requirements shall be prescribed by the Clearing House from time to time. The Clearing House will accept as margin, cash, government securities or common stocks, units of listed business trusts or units of listed real estate investment trusts in accordance with such procedures as may be prescribed by the Clearing House all of which must be and remain unencumbered, unless otherwise permitted or contemplated under this Rules, the Security Deed or the SFA.

        The Clearing Member shall notify the Clearing House as to whether such Collateral is to be maintained for its Customer Contracts or its House Contracts. Where the Collateral is to be maintained for the Clearing Member's Customer Contracts, the Clearing Member shall notify the Clearing House as to whether it is to be held for an Applicable Customer Account. Where the Collateral is to be maintained for the Clearing Member's House Contracts, the Clearing Member shall notify the Clearing House as to whether it is to be held for an Affiliate Account. Collateral will be held by the Clearing House for the relevant account.

        Amended on 27 March 200627 March 2006, 26 April 201326 April 2013, 31 December 201331 December 2013 and 2 May 20162 May 2016.

      • 7.20.2 Margin Composition

        Without prejudice to the generality of the foregoing, the aggregate amount of Collateral deposited with or provided to the Clearing House in respect of the aggregate required margin in relation to Customer Contracts, Affiliate Contracts and House Contracts (excluding Affiliate Contracts) must each separately comply with the following:

        7.20.2.1 where the relevant total margin requirements are US$1,000,000 (or its equivalent) or less, the entire margin requirements must be in the form of cash and/or government securities;
        7.20.2.2 where the relevant total margin requirements are more than US$1,000,000 (or its equivalent), cash and/or government securities must constitute at least US$1,000,000 or 60 percent of the total margin requirements whichever is the greater; and
        7.20.2.3 [Rule has been deleted]
        7.20.2.4 government securities or any other form of Collateral acceptable to the Clearing House shall not exceed a prescribed proportion of the margin requirement, as the Clearing House may specify from time to time in its discretion.

        Added on 27 March 200627 March 2006 and amended on 3 November 20103 November 2010, 8 November 20128 November 2012, 26 April 201326 April 2013, 2 May 20162 May 2016 and 2 March 20202 March 2020.

      • 7.20.3 Calculation of Margin

        The amount of margins required to be deposited by any Clearing Member with the Clearing House shall be calculated and determined:

        7.20.3.1 on a cumulative gross basis with reference to all open positions (both long and short) for which such Clearing Member is responsible and in accordance with procedures prescribed by the Clearing House; and/or
        7.20.3.2 on a cumulative gross basis with respect to cumulative Settlement Variation for freight forward contracts for tanker voyage routes, with reference to any potential adjustments to the Flat Rate.

        Amended on 27 March 200627 March 2006.

      • 7.20.3A

        The Clearing House may make margin calls in respect of the margin requirements prescribed pursuant to this Rule 7.20. Such margin calls shall be paid by such time and means as the Clearing House shall prescribe.

        Added on 26 April 201326 April 2013.

    • 7.22 Margins of Third Parties

      • 7.22.2

        A Clearing Member may accept cash, government securities, common stocks, bank certificates of deposit, bank guarantees, bank letters of credit, gold bars, gold certificates and such other instruments as the Clearing House permits from its Third Parties (including Customers) for meeting their initial margins and maintenance margins requirements. Valuation of such instruments shall be in accordance with procedures specified by the Clearing House. The following are not acceptable forms of margins under this Rule:

        7.22.2.1 bank guarantees or letters of credit issued by a Third Party, or a Third Party's related corporation which is a bank, for trades incurred in that Third Party's account;
        7.22.2.2 bank guarantees and letters of credit other than those issued by a bank that holds a valid licence and operates in Singapore under the Banking Act 1970; and
        7.22.2.3 currency and financial instruments denominated in currencies which are subject to exchange controls such that they are illegal tender outside the currency's home country or are restricted by any form of capital controls.

        Amended on 27 March 200627 March 2006, 22 September 200622 September 2006 and 18 January 2022.

      • 7.22.3

        Except for trades which reduce a Third Party's maintenance margins requirements, a Clearing Member shall not accept orders or new trades for clearing from any Third Party (including any Customer) unless:

        7.22.3.1 the minimum initial margins for the new trades are deposited or are forthcoming within a reasonable period from the trade date; and
        7.22.3.2 the Third Party's total net equity complies with the maintenance margins for its existing open positions and in relation to potential Flat Rate adjustment applicable to freight forward contracts for tanker voyage routes or additional margins to be posted pursuant to Rule 7.22.4 are forthcoming within a reasonable period from the trade date.

        For settlement currency denominated in Japanese Yen, "reasonable period" in Rule 7.22.3.1 or 7.22.3.2 means a period which shall not exceed three (3) Trading Days from the trade date (T+3). For all other settlement currencies it means a period which shall not exceed two (2) Trading Days from the trade date (T+2).
        7.22.3.3 Credits in excess of required initial margins on all open positions and in relation to any potential Flat Rate adjustment applicable to freight forward contracts for tanker voyage routes of a Third Party (including a Customer), may be utilised by a Clearing Member as initial margins on a new position of the same Third Party (including a Customer).

        Amended on 27 March 200627 March 2006, 22 September 200622 September 2006 and 25 January 201725 January 2017.

      • 7.22.4

        A Clearing Member shall call for additional margins from a Third Party (including a Customer) for whom the Clearing Member provides carrying and/or clearing services if at any time the Third Party's total net equity falls below the maintenance margins. Such additional margins posted should be sufficient to bring the relevant account up to the initial margins level, within a reasonable period. Nothing herein prohibits a Clearing Member from making a call for additional margins or imposing a stricter settlement period as it sees fit.

        For settlement currency denominated in Japanese Yen, "reasonable period" in this Rule 7.22.4 means a period which shall not exceed three (3) Trading Days from the date that the Third Party's total net equity falls below the maintenance margins. For all other settlement currencies it means a period which shall not exceed two (2) Trading Days from the date that the Third Party's total net equity falls below the maintenance margins.

        Amended on 22 September 200622 September 2006.

      • 7.22.5

        If the Clearing Member is unable to effect personal contact with a Third Party (including a Customer) for whom the Clearing Member provides carrying and/or clearing services, a written notice sent to the Third Party at the most recent address furnished by it to the Clearing Member shall be deemed sufficient.

      • 7.22.6

        In the event of a Clearing Member's failure to obtain margins from the relevant Third Parties (including Customers) as required under Rule 7.22, the Clearing House may order such Clearing Member to immediately close out all or such part of the positions of such Third Parties on its books so as to correct the deficiency notwithstanding that the Clearing Member itself has sufficient margins placed with the Clearing House for the support of such positions in Contracts. Nothing herein prohibits a Clearing Member from taking such necessary actions to rectify the deficiency as it sees fit.

        Amended on 27 March 200627 March 2006 and 22 September 200622 September 2006.

      • 7.22.7

        Clearing Members shall be responsible to the Clearing House for all margin requirements.

      • 7.22.7A

        A Clearing Member shall comply with such requirements on the computation and monitoring of a Third Party's (including a Customer's) margins as the Clearing House, or where relevant, the Exchange may prescribe.

        Added on 22 September 200622 September 2006.

      • 7.22.8

        Violation of this Rule 7.22 shall be a major offence.

    • 7.22A Inter-Exchange Cross Margining

      • 7.22A.1

        Notwithstanding Rule 7.22, a Clearing Member may grant margin credit, at a rate not exceeding that which is prescribed by the Clearing House, to a Third Party (including a Customer) which holds long and short positions on contracts (on the same Underlying) with the Clearing House and another clearing house to the extent that the risk on the position in one clearing house is set-off against another ("inter-exchange cross margining"), if the following conditions are satisfied:

        7.22A.1.1 The risk-offsetting positions relate to contracts prescribed by the Clearing House as eligible for inter-exchange cross margining.
        7.22A.1.2 The Clearing Member ensures that the risk-offsetting positions are carried in the accounts belonging to the same Third Party (including a Customer) in which the same Third Party is the legal and beneficial owner. For the avoidance of doubt, inter-exchange cross margining is not allowed for positions carried in accounts opened by the same Third Party with different Clearing Members.
        7.22A.1.3 The Clearing Member provides for the right of set-off in respect of the Third Party's (including a Customer's) positions with the Clearing House and any other clearing house in its contractual agreements with that Third Party.
        7.22A.1.4 The Clearing Member continues to calculate the counterparty risk requirement for each counterparty exposure to the Third Party (including a Customer) as if margin credit had not been granted.
        7.22A.1.5 The Clearing Member, except in the case of a Bank Clearing Member, continues to maintain adequate liquidity facilities (bank lines and cash balances) to fund the gross margins payable to the Clearing House and any other relevant clearing houses.
        7.22A.1.6 The Clearing Member, except in the case of a Bank Clearing Member, imposes a limit on the amount of margin credit granted to the Third Party (including a Customer) which should not exceed 20% of such Clearing Member's free financial resources.
        7.22A.1.7 The Clearing Member, except in the case of a Bank Clearing Member, has proper internal controls and risk management procedures, as prescribed below, to monitor the credit risk and liquidity risk arising from inter-exchange cross margining:
        a. the limit on the amount of margin credit granted to a Third Party (including a Customer) must be set, approved and regularly reviewed by an authorised staff independent of trading, dealing or marketing functions;
        b. in setting the limit on the amount of margin credit granted to a Third Party (including a Customer), the Clearing Member must take into account possible maintenance margin calls and Settlement Variation losses to be paid to the Clearing House and any other relevant clearing house;
        c. the Clearing Member must strictly observe the limit on the amount of margin credit granted to each Third Party (including a Customer); and
        d. the Clearing Member must ensure that it has proper systems and control procedures to monitor, on a daily basis, the usage of the margin credits and the adequacy of its liquidity facilities (bank lines and cash balances) to meet obligations arising from positions held with the Clearing House and any other relevant clearing house, including:
        i. daily monitoring of each Third Party's (including a Customer's) intra-day and end-of-day use of margin credits to ensure that the limit on the amount of margin credit granted is not breached;
        ii. daily monitoring of all Third Parties' (including Customers') aggregated intra-day and end-of-day use of margin credits to ensure that the Clearing Member's liquidity facilities (bank lines and cash balances), after setting-off the Third Parties' aggregate use of margin credits, are adequate to meet the potential mark-to-market loss for positions carried at any relevant clearing house (excluding the Clearing House), as well as potential mark-to-market loss equivalent to at least two (2) times the maintenance margin for positions carried with the Clearing House;
        iii. reports used for intra-day and end-of-day monitoring are generated in a timely manner and have the following information:
        •   limit on amount of margin credit granted to each Third Party (including a Customer);
        •   amount of margin credit used by each Third Party;
        •   aggregate limit on amount of margin credit granted for all Third Parties;
        •   aggregate amount of margin credit used by all Third Parties;
        •   available liquidity facilities (bank lines and cash balances);
        •   excess liquidity facilities (bank lines and cash balances) after setting off the Third Parties' aggregate use of margin credits;
        and
        iv. remedial procedures are in place should there be any breach of controls, limits and thresholds.
        7.22A.1.8 The Clearing Member must notify the Clearing House if it decides to offer the inter-exchange cross margining arrangement to Third Parties (including Customers), that it has complied with, and shall continue to comply with the conditions stated in Rule 7.22A.
        7.22A.1.9 The Clearing House reserves the right to impose additional conditions or disallow a Clearing Member from offering the inter-exchange cross margining arrangement if it is not satisfied with the internal controls and risk management procedures of the Clearing Member requesting inter-exchange cross margining.

        Added on 22 September 200622 September 2006 and amended on 10 August 200710 August 2007.

    • 7.23 Emergency Margins and Advance Call for Settlement

      • 7.23.1

        The Clearing House may take any of the following actions:

        7.23.1.1 When in its opinion unstable conditions exist or market conditions and price fluctuations relating to one or more Commodities or Contracts or contracts at any time require that additional margins to maintain an orderly market or to preserve fiscal integrity or for any other reason, the Clearing House may call for additional margins from one or more Clearing Members.

        Such additional margins may be as much as or more than the original margin and must be deposited with the Clearing House during the next banking hour after demand therefore or at such time as may be specified. Such additional margins may be called for one or more Contracts, from one or more Clearing Members and on long positions, short positions or both, or in relation to any potential Flat Rate adjustment applicable to freight forward contracts for tanker voyage routes.
        7.23.1.2 When the Clearing House believes that any Clearing Member is carrying positions in its House and/or Customer Accounts, that are larger than is justified by the financial condition of that Clearing Member, or the Clearing Member is found to have a record of frequent rule violations or inadequate or unsound management or serious operational defects which, in the Clearing House's opinion, places or may place the Clearing House at risk, then the Clearing House may require such Clearing Member to deposit additional margins with the Clearing House during the next banking hour after demand therefore or at such time as may be specified or they may require that a portion of the open positions on the books of such Clearing Member be transferred to the books of another Clearing Member.

        Amended on 27 March 200627 March 2006.

      • 7.23.2

        If market conditions or price fluctuations are such that the Clearing House deems it necessary, it may call upon the Clearing Members whom it believes are affected by such conditions or fluctuations to deposit additional funds with the Clearing House by such time as it shall specify and in the amount it deems necessary to meet settlements.

        Amended on 27 March 200627 March 2006.

    • 7.24 Failure to Comply with Emergency Orders

      • 7.24.1

        In the event of the failure of a Clearing Member to deposit additional margins or to comply with the order of transfer of positions or to deposit additional funds as required under Rule 7.23, the Clearing House may direct and the Clearing Member shall in such event forthwith comply with any such direction that the Clearing Member forthwith liquidate all or part of the positions on its books.

        Amended on 27 March 200627 March 2006.

      • 7.24.2

        If there is a failure to so effect the required reduction in positions by the next Business Day, the Clearing House shall thereupon order the liquidation of all or the required part of the Clearing Member's position with due consideration to the positions in Customer Accounts and Affiliate Accounts. Any Clearing Member whose trades are thus liquidated shall provide for the payment of any loss to the Clearing House on the next settlement cycle by the Clearing House pursuant to Rule 7.12 or 7.13.

        Amended on 27 March 200627 March 2006 and 2 May 20162 May 2016.

    • Miscellaneous

      • 7.25 Fees

        • 7.25.1 Clearing Fees

          Clearing fees shall be charged by the Clearing House against a Clearing Member for each Contract cleared by the Clearing House in such amounts as the Clearing House may from time to time prescribe.

        • 7.25.2 Administrative Fees

          Without prejudice to Rule 2.36, administrative fees or similar fees shall be charged by the Clearing House against a Clearing Member in respect of such matters and in such amounts as the Clearing House may from time to time prescribe.

          Amended on 27 March 200627 March 2006.

        • 7.25.3 Payment

          Such fees as may be imposed by the Clearing House pursuant to this Rule shall be payable by the Clearing Members by such times and in such manner as may be prescribed by the Clearing House from time to time.

    • 7.26 Fines for Errors, Delays and Omissions

      • 7.26.1

        The Clearing House may impose fines against Clearing Members for errors, delays and omissions with respect to the required position change sheet or any other submission to the Clearing House.

        Amended on 27 March 200627 March 2006.

    • 7.27 Transfers of Trades

      • 7.27.1

        Subject to the approval of the Clearing House:

        7.27.1.1 Existing trades may be transferred on the books of a Clearing Member to the books of another Clearing Member when an error has been made in the assignment of a trade or trades, or when the change merely constitutes a transfer from one account title to another account title where both account titles have a common owner;
        7.27.1.2 Existing trades may be transferred from the books of one Clearing Member to the books of another Clearing Member when:—
        a. they merge or the first-mentioned Clearing Member is transferring the whole or part of its business to another entity; or
        b. a Clearing Member resigns from the Clearing House; or
        c. a new Clearing Member has an interest in existing trades on another Clearing Member's books. The original Clearing Member shall not suffer any loss in commission to which it is entitled on the trades that were transferred; or
        d. a mutual clerical error was made by two Clearing Members or the clearing members of the Relevant Market they are clearing for with respect to the trades to be cleared by them respectively on opposite sides thereof. Clear and sufficient information must be included with respect to the transfer trades and both the trade to reverse the error and the replacement trade must clear as transfers. In this event, and only in this event, the transfer may liquidate an open position on the books of the relevant Clearing Member(s);
        7.27.1.3 Existing trades on the books of one Clearing Member being a Customer Contract may be transferred to the books of another Clearing Member at the request of the relevant Customer, provided that the Customer is not at that time in default to the Clearing Member from whom the trades are to be transferred;
        7.27.1.4 Existing trades on the books of one Clearing Member may be transferred to the books of another Clearing Member when such transfer is EFP or an EFS transaction. The provisions of this Rule 7.27.1.4 shall not however apply to options contracts; and
        7.27.1.5 A trade made on a Relevant Market by a Clearing Member or a member of the Relevant Market (other than the Connect Market) (the "Executing Member") intended to be an order fill or to be given up to (i.e. placed on the books of) a Clearing Member (the "Recipient Member") other than the Executing Member or (where relevant) its qualifying member, may be placed or transferred into the books of the Recipient Member subject to compliance with Rule 7.27.3.

        Amended on 27 March 200627 March 2006, 10 August 200710 August 2007, 31 December 201331 December 2013 and 29 July 2022.

      • 7.27.2

        Except with the approval of the Clearing House, existing trades on the books of one Clearing Member may not be transferred to the books of another Clearing Member in order to liquidate a position by offset or where such transfer would result in concurrent long and short positions for the same speculative account.

        Amended on 27 March 200627 March 2006.

      • 7.27.3

        Where an Executing Member makes a trade on a Relevant Market intended to be an order fill or to be given up to a Recipient Member, as contemplated in Rule 7.27.1.5 (a "Relevant Trade"), each Relevant Trade may be transferred or placed to the books of the Recipient Member provided that the transfer or placement shall occur:

        7.27.3.1 within such time and in accordance with such procedures as the Relevant Market and/or the Clearing House may from time to time prescribe; and
        7.27.3.2 subject to the approval of the Clearing House.
        7.27.3.3 [Rule has been deleted.]

        Amended on 27 March 200627 March 2006 and 7 December 20107 December 2010.

      • 7.27.4

        If a Recipient Member purports to reject the transfer or placement of an alleged Relevant Trade(s) onto its books and the rejection (if permitted) would result in the Executing Member (if a Clearing Member itself) or its qualifying member having to accept onto its own books the rejected trade(s), and such rejected trade(s) would (whether of itself or together with other similarly rejected trade(s) for the same trading day) give rise to an aggregate maintenance margin obligation equal to S$3,000,000 (or such other amount as the Clearing House may from time to time prescribe):

        7.27.4.1 The Clearing House may:
        a. require the Recipient Member, as the party purporting to so reject the said trades, to satisfy the Clearing House of the validity of its rejection; and/or
        b. require the Clearing Member who would, if the rejection were effective, have to accept onto its own books the rejected trades, to provide such information and evidence in its possession or control relevant to the issue of the validity of the purported rejection;
        and
        7.27.4.2 unless the Clearing House is, consequent to any or both of its foregoing requirement(s) satisfied that the purported rejection was fully justified and valid, the Clearing House is thereafter empowered to require the Recipient Member to accept the transfer or placement out of all such part of the trades purported to have been rejected as the Clearing House deems appropriate onto its own books, and the Recipient Member shall abide by such requirement.
        7.27.4.3 In so far as the Clearing House deems it appropriate that only some of the trades purported to be rejected shall be accepted by the Recipient Member, the balance shall be treated as permitted rejection and the Executing Member (if itself a Clearing Member) or its qualifying member shall accept the same onto its own books accordingly.
        7.27.4.4 Failure by any Clearing Member to act accordingly pursuant to the Clearing House's requirement as aforesaid shall be a major offence.
        7.27.4.5 The Recipient Member shall, in anticipation of the prospect of the Clearing House exercising its discretion pursuant to Rule 7.27.4.1 above pursuant to a relevant purported rejection of an alleged Relevant Trade, be ready and willing consequent upon it so purporting to reject a said trade forthwith to produce on request by the Clearing House satisfactory evidence validating its purported rejection.
        7.27.4.6 Any decision by the Clearing House as aforesaid shall be without prejudice to the rights of any Clearing Member to pursue its contractual rights inter se either by arbitration pursuant to these Rules or the rules of the Relevant Market where the relevant Contract was executed (or where permitted) by litigation.

        Amended on 27 March 200627 March 2006.

      • 7.27.5

        The Clearing House may, with the consent of both Clearing Members, transfer existing trades on the books of one Clearing Member to the books of another Clearing Member, if in its opinion, the situation so requires and such transfer is to the best interests of the Clearing House. In such case, the Customer may be charged only one commission.

        Amended on 27 March 200627 March 2006.

      • 7.27.5A

        The Clearing House may, in accordance with any Contract Specifications, transfer existing trades from the books of one Clearing Member to the books of another Clearing Member with the consent of both Clearing Members, or from one Customer Account to another Customer Account of a Clearing Member with the consent of that Clearing Member.

        Added on 7 December 20157 December 2015.

      • 7.27.6

        All transfers or placements made pursuant to this Rule shall be reported to the Clearing House in a form acceptable to the Clearing House for the type of transaction involved. The Clearing Members involved shall maintain a full and complete record of all transactions together.

      • 7.27.7

        Notwithstanding any provision in this Rule 7.27, the Clearing House shall require (i) any Clearing Member from whose name one or more trades are to be transferred and, (ii) any Clearing Members in whose name one or more trades are to be transferred to provide the Clearing House with sufficient collateral to meet margin requirements and Settlement Variation and/or comply with any other margin requirement prescribed by the Clearing House as a condition of transfer of such trades .

        Amended on 3 November 20103 November 2010.

      • 7.27.8

        Transfers of positions under this Rule 7.27 will not require the close-out and re-booking of the relevant positions.

        Added on 31 December 201331 December 2013.

    • 7.28 Inter-Clearing House Transfers of Positions

      • 7.28.1

        Subject to the approval of the Clearing House, existing positions may be transferred between the books of a Clearing Member and the clearing member of any other Relevant Market (other than the Connect Market) at the request of the Customer, if:

        7.28.1.1 such positions relate to Contracts accepted for clearing by the Clearing House and such other Relevant Market (or its clearing house);
        7.28.1.2 the transfer has been approved by the other Relevant Market; and
        7.28.1.3 the other Relevant Market is not a Participating Market which is party to the Mutual Offset System.

        Added on 1 October 20091 October 2009 and Amended on 29 July 2022.

      • 7.28.2

        All transfers made pursuant to this Rule shall be reported to the Clearing House in a form acceptable to the Clearing House. The Clearing Member involved shall maintain a full and complete record of all such transfers together with all pertinent memoranda.

        Added on 1 October 20091 October 2009.

    • 7.30 Applicable Customer Accounts

      • 7.30.1

        For the purposes of Part 7 of these Rules, a Customer mayrequest its Clearing Member to designate any of its Customer Accounts as an Applicable Customer Account. The Clearing Member shall inform each of its Customers of the availability of this choice, and shall designate a Customer Account as being an Applicable Customer Account if the Customer requests for it. If the Clearing Member is not ready to designate a Customer Account as an Applicable Customer Account when the Customer requests for it, the Clearing Member shall inform the Customer when it will be able to do so.

        Added on 31 December 201331 December 2013.

      • 7.30.3

        The Clearing House shall be under no obligation to treat a Customer Account as being an Applicable Customer Account unless the Clearing House has received information relating to the identities of the Customers underlying the Applicable Customer Account as it requires.

        Added on 31 December 201331 December 2013.

      • 7.30.4

        Each Cleared Swaps Customer Account shall be treated by the Clearing House as being an Applicable Customer Account.

        Added on 31 December 201331 December 2013.

      • 7.30.5

        Each FCM Clearing Member shall provide to the Clearing House information relating to the identity of the Customer underlying each Cleared Swaps Customer Account as required by the Clearing House from time to time.

        Added on 31 December 201331 December 2013.

    • 7.31 Affiliate Account

      • 7.31.1

        For the purpose of Part 7 and 7A of this Rules, a Clearing Member may designate as an Affiliate Account, any House Account that belongs to and is maintained wholly for the benefit of one or more Affiliates. The Clearing Member must notify the Clearing House of any designation, failing which the Clearing House will be under no obligation to treat the designated account(s) as Affiliate Account(s).

        Added on 2 May 20162 May 2016.