Extract. Chapters 3, 7 and 9 with Schedule 1. Binding on every Member from admission. Amendments take effect on the eleventh Business Day after notice.
The following is an extract from the Rulebook of the Market, operated by the Clearing House. Capitalised terms have the meanings given in Chapter 1, which is not reproduced. The Rulebook binds every Member from the date of admission and is not subject to negotiation.
3.1.1 A person admitted as a Member is bound by these Rules as amended from time to time, whether or not the Member has received notice of an amendment, and whether or not the Member was a Member when the amendment was made.
3.2.1 A Member shall at all times maintain Net Capital not less than the amount prescribed for its category in Schedule 1, and shall certify compliance to the Clearing House on the first Business Day of each month.
3.2.2 A Member which does not satisfy Rule 3.2.1 shall be Restricted. A Restricted Member may reduce Open Positions and may not increase them. The Clearing House shall determine whether a transaction reduces or increases an Open Position, and that determination is final.
3.4.1 A Member shall not be entitled to information concerning the conduct, matter, act or omission underlying any Instrument it acquires, and the Clearing House shall not provide it.
3.4.2 Nothing in these Rules imposes on the Clearing House, on any Member, or on any prior holder, any obligation to notify the person to whom an underlying matter relates that an Instrument referencing it has been registered, transferred or settled.
3.5.1 A Member which is the subject of proceedings arising from Settlement remains in good standing and may continue to trade, provided that Rule 3.2.1 continues to be satisfied.
3.6.1 A Member shall not make any representation as to the risk characteristics of the Market, or of any Instrument admitted to it, to any person who is not a Member. A Member may make representations as to its own position.
7.1.1 Each of the following is a Default Event: failure to meet a Margin Call within the Prescribed Period; failure to satisfy Rule 3.2.1 for five consecutive Business Days; the appointment of an insolvency officer; and any event which in the opinion of the Clearing House is likely to lead to any of the foregoing.
7.1.2 No cure period applies to a failure to meet a Margin Call. No materiality threshold applies. The Prescribed Period is measured from the time the call is issued and not from the time it is received.
7.2.1 On a Default Event the Clearing House shall apply Resources in the order set out in Rule 7.2.2. No layer shall be applied until the preceding layer is exhausted, and each layer shall be applied in full.
7.2.2 The order is:
7.3.1 The Clearing House may issue an Assessment to each non-defaulting Member of not more than twice that Member’s Contribution, and not more than twice in respect of any one Default Event, the second not earlier than thirty days after the first.
7.4.1 On Maturity an Instrument ceases to be transferable. The person recorded in the Register as holder at the moment of Maturity is the Settlement Party.
7.4.2 No prior holder has any obligation in respect of an Instrument after transfer, whether in respect of Settlement, of the underlying matter, or of anything arising from either. The Register is conclusive as to identity of the Settlement Party and as to the time of each transfer.
7.4.3 The period for which the Settlement Party held the Instrument is not relevant to its obligation and shall not be pleaded in reduction of it.
7.5.1 The Clearing House may offer ancillary services to a Settlement Party, including representation, chain reconstruction and referral for the appointment of a designated officer. The provision of such services to a Settlement Party from whom the Clearing House has received commission in respect of the same Instrument does not constitute a conflict for the purposes of these Rules.
7.5.2 The Clearing House holds the complete transfer record. Whether that record is produced to a Settlement Party, to a court, or to any other person, is determined by the Clearing House in its absolute discretion.
9.1.1 The Clearing House does not hold a position in any Instrument at any time and gives no advice to any Member. No fiduciary duty arises between the Clearing House and any Member.
9.2.1 The liability of the Clearing House to a Member in respect of any matter is limited to the lesser of the fees paid by that Member to the Clearing House in the twelve months preceding the claim and 500,000.
9.2.2 The Clearing House is not liable for indirect, consequential, reputational or economic loss, for loss of profit, or for any liability arising from Settlement.
9.3.1 Force Majeure includes: failure of a settlement system; failure of a communications network; act of a competent authority; and publication.
9.4.1 Any determination, calculation, valuation or classification made by the Clearing House under these Rules is conclusive and binding save in the case of manifest error.
9.4.2 Whether a manifest error has occurred is determined by the Clearing House.
9.6.1 A Member waives, to the fullest extent permitted by law, any claim against the Clearing House arising from the exercise or non-exercise of any discretion conferred by these Rules.
9.7.1 The Clearing House may amend these Rules by notice. An amendment takes effect on the eleventh Business Day after notice unless Members holding not less than seventy-five per cent of aggregate Contributions object in writing within ten Business Days.
9.8.1 These Rules are governed by the law of the jurisdiction of incorporation of the Clearing House. The courts of that jurisdiction have exclusive jurisdiction. A Member submits to that jurisdiction irrevocably and waives any objection on the grounds of forum.
| Reference | Provision | Value |
|---|---|---|
| S1.01 | Prescribed Period, Margin Call | 60 minutes from issue |
| S1.02 | Intraday call times | 09:00, 12:00, 15:00 CET |
| S1.03 | Net Capital, General Clearing Member | 250,000,000 |
| S1.04 | Net Capital, Direct Clearing Member | 50,000,000 |
| S1.05 | Net Capital, Sponsored Participant | 10,000,000 |
| S1.06 | Dedicated Own Resources | 14,000,000 |
| S1.07 | Assessment cap, per call | 2 times Contribution |
| S1.08 | Assessment calls, per Default Event | 2 |
| S1.09 | Interval between Assessment calls | 30 days |
| S1.10 | Default trigger on Net Capital, Rule 7.1.1 | 5 consecutive Business Days |
| S1.11 | Amendment notice period | 10 Business Days |
| S1.12 | Objection threshold, Rule 9.7.1 | 75 per cent of aggregate Contributions |
| S1.13 | Interest on late payment | Reference rate plus 400 basis points |
| S1.14 | Liability cap, Rule 9.2.1 | Lesser of 12 months fees and 500,000 |
Members are reminded that Schedule 1 is amended under Rule 9.7.1 in the same manner as any other provision, and that the values above are those in force on the date of this extract. The Rulebook has been amended one hundred and fourteen times since inception, of which sixty-one amendments affected Schedule 1. The table of derivations accompanies the consolidated edition.