Qualifying Letter of Credit
(a) For the purpose of Rule 3.4, a Trading Member may include one or more qualifying letter(s) of credit in its calculation of aggregate resources, except that where the total amount payable under the qualifying letter(s) of credit exceeds 50% of the Trading Member's total risk requirement, the amount in excess shall not be taken into account for determining the Trading Member's aggregate resources.
(b) For the purpose of Rule 3.4.6(a), a qualifying letter of credit is a legally enforceable and irrevocable letter of credit that is:
(i) in the case of a Trading Member that is not a Clearing Member, made in favour of SGX-ST;
(ii) in the case of a Trading Member that is also a Clearing Member, made in favour of CDP; and
(iii) issued by a bank approved by, and in a form acceptable to SGX-ST or CDP, as the case may be,
but does not include any letters of credit provided by a Clearing Member to satisfy Rule 7 of the Clearing Rules or any other requirement imposed by CDP.
(c) SGX-ST shall reserve the right to call on any of the qualifying letter(s) of credit made in favour of SGX-ST pursuant to Rule 3.4.6 and apply the proceeds thereof in respect of the Trading Member's default to SGX-ST.