7.04.2 Off Market Trades (Excluding OTCF)

Past version: Effective from 26 Apr 2013 to 18 Sep 2016

7.04.2.1 Eligible Non-Relevant Market Transactions cleared by two Clearing Members

When a contract registered and confirmed as an Eligible Non-Relevant Market Transaction pursuant to Rule 7.02A.2 between two Clearing Members is cleared through the Clearing House, upon confirmation of the contract, 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.
7.04.2.2 EFP, EFS, NLT cleared by two Clearing Members

Subject to Rule 7.04.2.3, when a contract registered as an EFP, EFS or NLT between two Clearing Members is cleared through the Clearing House, 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.
7.04.2.3 The events described under Rule 7.04.2.2 shall take place only upon:
a. where both Clearing Members receive margin call pursuant to the first margin cycle run following the registration of the trade: 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 registration of the trade: 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 for the trade: the end of that margin cycle.
7.04.2.4 EFP, EFS, NLT cleared by a Clearing Member and a clearing Member of another Relevant Market (or its clearing house

Subject to Rule 7.04.2.5, when a contract registered as an EFP, EFS or NLT 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, 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 The events described under Rule 7.04.2.4 shall take place only upon the 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 registration of the trade, 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 7.04.2.4.b.

Amended on 1 October 20091 October 2009 and 26 April 201326 April 2013.