Past version: Effective from 17 Jul 2019 to 28 Jul 2022
7A.06.6.1 A Multiple Default Period shall be a fixed period of 90 days commencing on the day an event of default occurs as declared by the Clearing House, where such event of default results in the use and application of the Clearing Fund.
7A.06.6.2 An event of default occurring within a Multiple Default Period shall not trigger the commencement of a new Multiple Default Period.
7A.06.6.3 The Clearing House shall notify Clearing Members of the commencement date of any Multiple Default Period.
7A.06.6.4 The Clearing Fund in the order of priority listed in Rule 7A.01A.2B.2 shall be used and applied in the following manner in respect of events of default occurring within a Multiple Default Period:
a. The Clearing Fund shall only be drawn upon after the monies of the defaulted Clearing Member with the Clearing House have been exhausted in accordance with this Rules;
b. The Clearing Fund shall be utilised in respect of each event of default occurring within the Multiple Default Period in the order of priority listed in Rule 7A.01A.2B.2 irrespective of the number of draw downs on the Clearing Fund;
c. In the event that a utilisation of the Clearing Fund draws on only part of the funds available at any source under Rule 7A.01A.2B.2, the next utilisation of the Clearing Fund in connection with the next event of default occurring within the same Multiple Default Period, shall:
i. subject to Rule 7A.06.6.4.c.ii, draw first from the remaining funds available at the unexhausted source before drawing from the next source, taking into account, at all times, the relevant Contract Class;
ii. where the next event of default occurs in one or more Contract Classes in which all preceding events of defaults in that same Multiple Default Period were not involved, the draw down will revert to the start of the sequence of priority listed in Rule 7A.01A.2B.2 and:
(1) the source of funds provided for in Rule 7A.01A.2B.2.a will consist of any remaining resources in the Clearing House First Contribution or any remaining resources in the Clearing House Intermediate Contribution, whichever amount is the higher; and
(2) the source of funds provided for in Rule 7A.01A.2B.2.c will consist of any remaining contributions to the Clearing Fund as referred to in Rule 7A.01A.2B.2.f, after which, either any remaining resources in the Clearing House Intermediate Contribution or any remaining resources in the Clearing House First Contribution, whichever has not already been used as the source of fund provided for in Rule 7A.01A.2B.2.a pursuant to (1) above.
d. Once all the sources of the Clearing Fund have been exhausted, any current or subsequent utilisation of the Clearing Fund in connection with an event of default occurring within the same Multiple Default Period shall revert to the start of the sequence of the priority listed in Rule 7A.01A.2B.2 in respect of the replenished Clearing Fund; and
e. Upon the commencement of a new Multiple Default Period, the first draw down on the Clearing Fund in connection with an event of default occurring in the new Multiple Default Period shall commence from the first source of funds listed in Rule 7A.01A.2B.2, subject to Rule 7A.06.8.2, and the subsequent sources of funds shall follow accordingly. This applies regardless of the source from which the last payment out of the Clearing Fund was made in connection with an event of default which occurred in any previous Multiple Default Period.
7A.06.6.5 The Clearing House, in its application of the Clearing Fund in accordance with Rules 7A.01A.2B.2, and 7A.01A.2D, shall exclude a resigning Clearing Member whose Clearing Fund Deposit and Further Assessment Amount have been applied fully as specified in Rule 2.28.2A.
7A.06.6.6 Nothing in this Rule 7A.06.6 shall be construed as permitting the Clearing House to apply more than the Clearing Member's Clearing Fund Deposit and Further Assessment Amount as at the time of the event of default, to meet losses arising from or in connection with any individual event of default.
Added on 7 August 20127 August 2012 and amended on 29 July 201329 July 2013, 30 June 201430 June 2014, 12 November 201812 November 2018 and 17 July 201917 July 2019.