7.9 Order of Application of Contributions

7.9.1

The Clearing Fund shall be applied in the following order:—

(1) first, the contributions made by the Defaulting Clearing Member to the Clearing Fund;

(2) second, the CDP First Contribution;

(3) third, subject to Rules 7.10.4, 7.10.5 and 7.10.6, the Collateralised Contributions from all non-Defaulting Clearing Members. Each non-Defaulting Clearing Member’s Collateralised Contribution will be applied on a pro rata basis, based on that non-Defaulting Clearing Member's required Collateralised Contribution relative to the aggregate required Collateralised Contributions of all non-Defaulting Clearing Members;

(3A) fourth, the CDP Second Contribution; and

(4) fifth, subject to Rules 7.10.4, 7.10.5 and 7.10.6, the Contingent Contributions from all non-Defaulting Clearing Members. Each non-Defaulting Clearing Member’s Contingent Contribution will be applied on a pro rata basis, based on that non-Defaulting Clearing Member's required Contingent Contribution relative to the aggregate required Contingent Contributions of all non-Defaulting Clearing Members.

(5) [Rule has been deleted.]

(6) [Rule has been deleted.]

Amended on 3 May 20113 May 2011, 26 May 2023 and 31 October 2024.

7.9.2

Following the application of the Clearing Fund for the first Event of Default in a Relevant Period, any subsequent application of the Clearing Fund for subsequent Events of Default in the same Relevant Period shall continue from the remaining funds in the source of contribution with the highest order of application that has not been exhausted by the previous Event of Default.

Amended on 3 May 2011 3 May 2011 and 26 May 2023.

7.9.3

Once all the sources of contribution to the Clearing Fund have been exhausted, any further application of the Clearing Fund (as topped up in accordance with Rule 7.10) shall, irrespective of the number of times it has been topped up, and subject to Rules 7.10.4, 7.10.5 and 7.10.6, begin again at the start of and flow in the sequence of the priority set out in Rule 7.9.1.

(1) [Rule has been deleted.]

(2) [Rule has been deleted.]

Amended on 3 May 20113 May 2011, 26 May 2023 and 31 October 2024.

7.9.4

Upon the commencement of a new Relevant Period, regardless of the last source of contribution applied in the previous Relevant Period, any application of the Clearing Fund in the new Relevant Period shall begin at the start of the sequence of priority set out in Rule 7.9.1.

Amended on 3 May 2011 3 May 2011 and 26 May 2023.

7.9.5

Notwithstanding Rule 7.9.1, CDP shall be entitled to draw upon its available lines of credit or other such liquidity resources available to CDP at any time for the purposes set out in Rule 7.8 in the event that any of the assets comprising the Clearing Fund are not immediately available for application in accordance with Rule 7.9.1, such unavailability arising for example, where the cash deposits of the Clearing Fund are placed in fixed deposit accounts and penalty charges may be incurred for the premature termination of the fixed deposit accounts, or where there is delay in the realisation or disposal of the resources and assets of the Clearing Fund, or where there is delay in obtaining payment from the guarantees or other facilities of the Clearing Fund, or where CDP, in its absolute discretion, deems it advisable to draw upon its available lines of credit or other such liquidity resources available to CDP first.

Amended on 3 May 2011 3 May 2011 and 26 May 2023.

7.9.6

Where CDP, in lieu of applying any source of contribution, draws down on any lines of credit or other such liquidity resources available to CDP pursuant to Rule 7.9.5, CDP shall be entitled to be reimbursed from that source of contribution for the amount drawn down and all costs in relation to the draw down.

Amended on 3 May 2011 3 May 2011 and 26 May 2023.