7A.01A.2B.1 The Clearing Fund shall be applied in the manner set out in Rule 7A.01A.2B.2 to meet losses suffered by the Clearing House, arising from or in connection with, an event of default or a Trigger Event, provided always that the defaulted Clearing Member's Collateral, or in the case of a Trigger Event, the Connect Counterparty’s collateral, has been fully applied in accordance with Rule 7A.05.1.
7A.01A.2B.2 Save as provided in Rule 7A.06.6.4 on the application of the Clearing Fund in a Multiple Default Period, and subject to the application of Rule 7A.01A.2F when a Trigger Event has been declared, the Clearing Fund shall be applied in the following order of priority, with each source of funds to be exhausted before the next source is applied:
a. first, the Clearing House First Loss Contribution, in the manner set out in Rule 7A.01A.2C;
b. second, the Clearing Fund Deposits of Active Clearing Members, in the manner set out in Rule 7A.01A.2D;
c. third, the Clearing House Intermediate Contribution, in the manner set out in Rule 7A.01A.2E;
d. fourth, the Clearing Fund Deposits of non-defaulting Clearing Members that are not available for use pursuant to Rule 7A.01A.2B.2.b, which will be applied on a pro-rata basis, calculated as the proportion of the Clearing Fund Deposit requirement of that Clearing Member relative to the aggregate Clearing Fund Deposit requirements of all such Clearing Members;
e. fifth, the Further Assessment Amounts of all non-defaulting Clearing Members, which will be applied on a pro-rata basis, calculated as the proportion of the Further Assessment Amount requirement of that Clearing Member relative to the aggregate Further Assessment Amount requirements of all such Clearing Members; and
f. sixth, any other contributions to the Clearing Fund.
Added on 17 July 201917 July 2019 and Amended on 29 July 2022.