7.04.2A.1 NLT transactions for Connect Contracts cleared by two Clearing Members
When a NLT transaction for Connect Contracts that is eligible for registration pursuant to Rule 7.02A.1.1 and that is registered pursuant to Rule 7.02A.2 between two Clearing Members is cleared through the Clearing House, upon the Clearing House issuing to the Clearing Members a Notice of Novation that the transaction has been accepted for clearing, 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:
When a NLT transaction for Connect Contracts that is eligible for registration pursuant to Rule 7.02A.1.1 and that is registered pursuant to Rule 7.02A.2 between two Clearing Members is cleared through the Clearing House, upon the Clearing House issuing to the Clearing Members a Notice of Novation that the transaction has been accepted for clearing, 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.
A "Notice of Novation" for the purpose of Rule 7.04.2A means a "BD4" message or such other message that the Clearing House may inform Clearing Members will be used in place of a "BD4" message.
Added on 29 July 2022.