7.03.1 Default by Clearing Member and any other Relevant Market (or its Clearing House)

Past version: Effective up to 06 Aug 2012

Without prejudice and subject to the other provisions of this Rules:

7.03.1.1 Where a Clearing Member has failed promptly to discharge any of its obligations to the Clearing House in respect of a House Contract, the Clearing House may apply:
a. the Clearing Member's Security Deposit and all other forms of security furnished to the Clearing House (except where such security is furnished in relation to Customer Contracts, it shall be governed by Rule 7.03.1.2.c);
b. margins, assets or securities (including without limitation letters of credit provided by the Clearing Member to the Clearing House) deposited by the Clearing Member in relation to House Contracts; and
c. in the case of a Bank Clearing Member incorporated outside Singapore which has satisfied Rule 2.02B.1.11.a or b, the cash and/or acceptable government securities deposited by the Bank Clearing Member pursuant to Rule 2.08.1B.1.
7.03.1.2 Where a Clearing Member has failed promptly to discharge any of its obligations to the Clearing House in respect of a Customer Contract, the Clearing House may apply:
a. the Clearing Member's Security Deposit and all other forms of security furnished to the Clearing House (except where such security is furnished in relation to Customer Contracts, it shall be governed by Rule 7.03.1.2.c);
b. margins, assets or securities (including without limitation letters of credit provided by the Clearing Member to the Clearing House) deposited by the Clearing Member in relation to House Contracts;
c. margins, assets or securities (including without limitation letters of credit provided by the Clearing Member to the Clearing House) deposited by the Clearing Member in relation to Customer Contracts provided that the conditions in the SFA are satisfied;
d. in the case of a Bank Clearing Member incorporated outside Singapore which has satisfied Rule 2.02B.1.11.a or b, the cash and/or acceptable government securities deposited by the Bank Clearing Member pursuant to Rule 2.08.1B.1; and
e. the qualifying letters of credit deposited with the Exchange by a Trading Member sponsored by the Clearing Member, pursuant to Rule 7.3.6 of the Trading Rules, provided that the Clearing Member's default is attributable to such Trading Member's act or omission.
7.03.1.3 Without prejudice to the rights of the Clearing House in respect of failure by the Clearing Member to promptly discharge any of its obligations to the Clearing House, the Clearing Member shall immediately make up any deficiencies in its Security Deposit resulting from such applications.
7.03.1.4 The Clearing Member shall not take any action or do anything that will directly or indirectly interfere with, prohibit, restrict or inhibit the ability of the Clearing House to so apply such Security Deposit, margins on deposit, assets or securities and the Clearing House shall, except where it has acted in bad faith, be under no liability to the Clearing Member or any other person whatsoever in so applying such Security Deposit, margins on deposit, assets or securities and the Clearing Member shall fully indemnify and keep indemnified the Clearing House and hold the Clearing House harmless against any such liability.
7.03.1.5 If a Relevant Market, including a Participating Market, and/or its clearing house as the case may be fails to promptly discharge any of its obligations to the Clearing House arising out of any arrangement relating to the clearing of Contracts, including the Mutual Offset System, the Letters of Credit, margins, other assets or securities of such Relevant Market shall be applied by the Clearing House to discharge the obligation.

Amended on 12 October 200512 October 2005, 27 March 200627 March 2006, 22 September 200622 September 2006, 10 August 200710 August 2007 and 1 October 20091 October 2009.