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.