7.20 Margin Amounts

7.20.1 Acceptable Margin

Margin requirements shall be prescribed by the Clearing House from time to time. The Clearing House will accept as margin, cash, government securities or common stocks, units of listed business trusts or units of listed real estate investment trusts in accordance with such procedures as may be prescribed by the Clearing House all of which must be and remain unencumbered, unless otherwise permitted or contemplated under this Rules, the Security Deed or the SFA.

The Clearing Member shall notify the Clearing House as to whether such Collateral is to be maintained for its Customer Contracts or its House Contracts. Where the Collateral is to be maintained for the Clearing Member's Customer Contracts, the Clearing Member shall notify the Clearing House as to whether it is to be held for an Applicable Customer Account. Where the Collateral is to be maintained for the Clearing Member's House Contracts, the Clearing Member shall notify the Clearing House as to whether it is to be held for an Affiliate Account. Collateral will be held by the Clearing House for the relevant account.

Amended on 27 March 2006 27 March 2006, 26 April 2013 26 April 2013, 31 December 2013 31 December 2013 and 2 May 2016 2 May 2016.

7.20.2 Margin Composition

Without prejudice to the generality of the foregoing, the aggregate amount of Collateral deposited with or provided to the Clearing House in respect of the aggregate required margin in relation to Customer Contracts, Affiliate Contracts and House Contracts (excluding Affiliate Contracts) must each separately comply with the following:

7.20.2.1 where the relevant total margin requirements are US$1,000,000 (or its equivalent) or less, the entire margin requirements must be in the form of cash and/or government securities;

7.20.2.2 where the relevant total margin requirements are more than US$1,000,000 (or its equivalent), cash and/or government securities must constitute at least US$1,000,000 or 60 percent of the total margin requirements whichever is the greater; and

7.20.2.3 [Rule has been deleted]

7.20.2.4 government securities or any other form of Collateral acceptable to the Clearing House shall not exceed a prescribed proportion of the margin requirement, as the Clearing House may specify from time to time in its discretion.

Added on 27 March 2006 27 March 2006 and amended on 3 November 2010 3 November 2010, 8 November 2012 8 November 2012, 26 April 2013 26 April 2013, 2 May 2016 2 May 2016 and 2 March 2020 2 March 2020.

7.20.3 Calculation of Margin

The amount of margins required to be deposited by any Clearing Member with the Clearing House shall be calculated and determined:

7.20.3.1 on a cumulative gross basis with reference to all open positions (both long and short) for which such Clearing Member is responsible and in accordance with procedures prescribed by the Clearing House; and/or

7.20.3.2 on a cumulative gross basis with respect to cumulative Settlement Variation for freight forward contracts for tanker voyage routes, with reference to any potential adjustments to the Flat Rate.

Amended on 27 March 2006 27 March 2006.