7A.01A.2D.1 Subject to Rule 7A.01A.2D.2 and Rule 7A.01A.2D.4, the Clearing Fund Deposits deposited by Active Clearing Members to clear the Contract Class in which an event of default and/or Trigger Event has occurred shall be applied to meet the losses in that Contract Class.
7A.01A.2D.2 Where an auction is held in relation to the Contract Class specified in Rule 7A.01A.5.a, the Clearing Fund Deposit of each Required Participant shall be further apportioned to that auction in such proportion as the Clearing House determines, to be applied to meet the losses arising from or in connection with that auction, in the following order of priority and manner, with each level to be exhausted before the next level is applied:
a. first, the apportioned Clearing Fund Deposits of Required Participants who did not submit a bid;
b. second, the apportioned Clearing Fund Deposits of Required Participants who had submitted bids that were below the Winning Bid Price, which will be applied on a pro-rata basis based on the product of:
i. the distance between such Required Participant's bid price and the Winning Bid Price; and
ii. the amount of such Required Participant's Clearing Fund Deposit apportioned to the auction;
c. third, the unused apportioned Clearing Fund Deposits of Required Participants who had submitted bids that were below the Winning Bid Price, which are not applied in Rule 7A.01A.2D.2.b; and
d. fourth, the apportioned Clearing Fund Deposits of Required Participants who had submitted the Winning Bid Price.
7A.01A.2D.3 Where an auction is held in relation to the Contract Class specified in Rule 7A.01A.5.a, any unused apportioned Clearing Fund Deposits for that auction shall be aggregated with the remaining Clearing Fund Deposits apportioned to the Contract Class, and applied to meet any outstanding losses in that Contract Class (including outstanding losses in any other such auction(s)) in such manner as the Clearing House determines.
7A.01A.2D.4 Where an event of default has occurred in more than one Contract Class, any unused apportioned Clearing Fund Deposits for a Contract Class (regardless of whether this follows the application of Rule 7A.01A.2D.3) shall be applied to meet any losses outstanding in the other Contract Class(es).
Added on 17 July 201917 July 2019 and Amended on 29 July 2022.