Past version: Effective from 07 Aug 2012 to 25 Apr 2013
Without prejudice and subject to the other provisions of this Rules:
7A.05.1.1 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 7A.05.1.2.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.
7A.05.1.2 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 7A.05.1.2.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 in relation to the permissible use of customers' money and assets 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.
7A.05.1.3 The Clearing House may liquidate any non-cash assets deposited with it by a Clearing Member:
a. in respect of assets in relation to House Contracts, where the Clearing Member has failed to promptly discharge its obligations to the Clearing House in respect of any Contract; and
b. in respect of assets in relation to Customer Contracts, where the Clearing Member has failed to promptly discharge its obligations in respect of a Customer Contract and the conditions in the SFA in relation to the permissible use of customers' money and assets are satisfied.
The Clearing House shall not be liable for any losses arising from such liquidation.
7A.05.1.4 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.
7A.05.1.5 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.
7A.05.1.6 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.
7A.05.1.7 Where the Clearing Member which is also a clearing member of CDP has failed to settle its financial obligations to CDP, the Clearing House shall be entitled to retain any margins, assets or securities, including without limitation letters of credit, deposited by the Clearing Member in relation to House Contracts which have not been utilised pursuant to this Rule 7A.05.
Added on 7 August 20127 August 2012.