CLIENT CLEARING MEMBER DISCLOSURE DOCUMENT
Direct and Indirect Clearing – RBC Europe Limited
Introduction
Throughout this document references to "we", "our" and "us" are references to the clearing broker.
References to "you" and "your" are references to the client.
What is the purpose of this document?
To enable us to comply with our obligations as a clearing member under MiFID 2 RTS 6 and EMIR as
it now applies in UK law following the withdrawal of the UK from the European Union, which requiresthat where we are providing services to you that involve us clearing derivatives through an EU/UK
central counterparty (CCP), we must:•

offer you a choice of an individual client account or an omnibus client account (as discussed
under "The types of accounts available" in Part One B below);•

publicly disclose the levels of protection and costs associated with different levels ofsegregation; and•describe the main legal implications of different levels of segregation.

Additionally, to enable us to comply with our obligations as a clearing member under the Indirect
Clearing RTS, which require that, where we are providing services to you that involve us facilitating theindirect clearing of derivatives through an EU/UK CCP, we must:•

offer you a choice of a basic omnibus indirect client account or a gross omnibus indirect client
account (as discussed under "The types of accounts available" in Part One B below); and•publicly disclose the general terms and conditions under which we provide services to you(which information we will provide to you in a separate document).

We have provided the costs associated with the different levels of segregation separately. Details can befound in the RBCEL EMIR and MiFID Clearing Fees Disclosure, located on the RBC Capital Markets
webpagefor
Policies,
Disclaimers
andDisclosures
under
the
following
link: https://www.rbccm.com/rbccm/policies-disclaimers.page .
In respect of the treatment of margin and collateral at CCP level you should refer to the CCP disclosuresthat the CCPs are required to prepare.
Organisation of this document
This document is set out as follows:•Part One A provides some background to clearing.
1
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.

This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

•Part One B gives information about the differences between the individual client account, theomnibus client account, the basic omnibus indirect client account and the gross omnibus indirectclient account, explains how this impacts on the clearing of your derivatives and sets out someof the other factors that might affect the level of protection you receive in respect of assets
provided to us as margin.

•

Part One C sets out some of the main insolvency considerations.

•

Part One D sets out a general overview of the terms and conditions under which we provide
services to you.

•Part Two provides an overview of the main variations on the different levels of segregation that
the CCPs offer, together with an explanation of the main implications of each, and sets out links
to further information provided by the CCPs. For the position relating to any particular CCP
you should refer to the disclosure and any other information prepared by the CCP.

What are you required to do?
You must review the information provided in this document and the relevant CCP disclosures andconfirm to us in writing which client account type you would like us to maintain with respect to each
CCP on which we clear derivatives for you from time to time and whether you agree with the way inwhich we propose to deal with any excess margin we may hold in relation to an individual client account.
We will explain how we would like you to make this confirmation and by when. If you do not confirm
within the requested timeframe, we will record the positions and assets relating to you in an account thathas the level of EMIR-compliant segregation which is the closest to your pre-EMIR account structure,provided that:•

we have used reasonable and multiple endeavours to obtain your written choice of segregationand have evidence of our efforts;•

in our communication with you, we have informed you that your failure to elect a level ofsegregation in accordance with EMIR Article 39 will result in us allocating you to an accounthaving the level of EMIR-compliant segregation which is the closest to your pre-EMIR accountstructure (e.g. an omnibus segregation, net or gross as the case may be); and•we have explained to you that election by us does not preclude you to elect a different (e.g.
higher) level of segregation at any time by communicating it in writing to us.

Where we offer to facilitate indirect clearing services, you will also need to confirm to us whether you
intend to provide clearing services through us to your clients and inform us of your clients' choice of
indirect client accounts. We will explain how we would like you to make this confirmation and by when.
ImportantWhilst this document will be helpful to you when making this decision, this document does notconstitute legal or any other form of advice and must not be relied on as such. This document provides
a high level analysis of several complex and/or new areas of law, whose effect will vary depending on
the specific facts of any particular case, some of which have not been tested in the courts. It does notprovide all the information you may need to make your decision on which account type or level of2
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

segregation is suitable for you. It is your responsibility and, where applicable, the responsibility of yourclients to review and conduct independent due diligence on the relevant rules, legal documentation andany other information provided on each of the account offerings and those of the various CCPs on which
we clear derivatives for you and, where applicable, your clients. You and, where applicable, your clients
may wish to appoint independent professional advisors to assist with this.
We shall not in any circumstances be liable, whether in contract, tort, breach of statutory duty orotherwise for any losses or damages that may be suffered as a result of using this document. Such losses
or damages include (a) any loss of profit or revenue, damage to reputation or loss of any contract orother business opportunity or goodwill and (b) any indirect loss or consequential loss. No responsibility
or liability is accepted for any differences of interpretation of legislative provisions and related guidanceon which it is based. This paragraph does not extend to an exclusion of liability for, or remedy in respectof, fraudulent misrepresentation.
Please note that this disclosure has been prepared on the basis of English law save as otherwise stated.
However, issues under other laws may be relevant to your due diligence. For example, the law governing
the CCP rules or related agreements; the law(s) governing our insolvency; the law of the jurisdiction ofincorporation of the CCP; and the law of the location of any assets.

3
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

Part One A: A brief background to clearing
The market distinguishes two main types of clearing models: the "agency" model and the "principal-to­principal" model. Most of the CCPs we use adopt the "principal-to-principal" model, and this document
assumes all transactions are cleared according to this model.
The "principal-to-principal" clearing model
When clearing transactions for you through a CCP, we usually enter into two separate transactions:CCP

A principal-to-principal transaction with the CCP, which is governedby the rules of such CCP (the CCP Transaction).
Clearing Broker(We)

ClientA principal-to-principal transaction with you, which is governed by theterms of the client clearing agreement between us (the Client
Transaction).

(You)

Additionally, where we facilitate indirect clearing services, i.e. facilitate the clearing by you through usof positions for your own clients, you may enter into a third principal-to-principal transaction with oneof your clients:

CCP

CCP Transaction
Clearing Broker(We)

Client Transaction
Client(You)

Indirect Client

A principal-to-principal transaction between you and one of yourclients, which is governed by the terms of an indirect client clearing
agreement between you and your client (the Indirect Client
Transaction).

(Your client)4
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

The terms of each Client Transaction are equivalent to those of the related CCP Transaction, except that(i) each Client Transaction will be governed by a client clearing agreement between you and us and (ii)
we will take the opposite position in the CCP Transaction to the position we have under the related
Client Transaction. Similarly, where applicable, the terms of each Indirect Client Transaction areequivalent to those of the related Client Transaction which, in turn, is equivalent to those of the related
CCP Transaction, except that (i) each Indirect Client Transaction will be governed by an indirect client
clearing agreement between you and your client, and (ii) you will take the opposite position in the Client
Transaction to the position you have under the related Indirect Client Transaction.
Under the terms of the client clearing agreement between you and us, a Client Transaction will arise
without the need for any further action by either you or us, as soon as the CCP Transaction arises
between us and the CCP. Once both of those transactions have been entered into, your transaction isconsidered to be "cleared". Similarly, where applicable, we expect that under the terms of the indirectclient clearing agreement between you and your client, an Indirect Client Transaction will arise without
the need for any further action by either you or your client, as soon as the Client Transaction arises
between you and us. Once all three of those transactions referred to above have been entered into, yourclient's transaction is considered to be "cleared".
As the principal to the CCP, we are required to provide assets to the CCP as margin for the CCP
Transactions that relate to you and your clients and to ensure the CCP has as much margin as it requires
at any time. We will therefore ask you for margin and, where you provide it in a form which we cannot
transfer to the CCP, we may transform it. If you have provided us with margin assets, you may face
what we call "transit risk" - this is the risk that, if we were to default prior to providing such assets to
the CCP, the assets that should have been recorded in your account at the CCP will not have been andwill not benefit from the protections described below under "What happens if we are declared to be in
default by a CCP?". Transit risk may be mitigated where we hold margin in the form of cash as clientmoney (see "What is the impact if we treat cash you transfer to us as client money in accordance with
the FCA client money rules?" below).
However, in many cases you may not actually face transit risk because the CCPs often call margin fromus early in the morning so we will often use our own funds to satisfy the margin call and then seek torecover such amount from you. In these cases, it is rather that we are exposed to you for the interim
period. The arrangements between you and us relating to how the margin calls will be funded will be
set out in the client clearing agreement between you and us.
If we are not a member of such CCP ourselves, we may offer you alternative solutions:•

Where we do not facilitate indirect clearing services provided by you, we may enter into a
principal-to-principal transaction with an affiliate or third-party clearing broker which is amember of such CCP, instead of a principal-to-principal transaction directly with such CCP.
Such arrangements are outside the scope of this document, and we will provide you with aseparate Client Disclosure Document with respect to such arrangements.

•

Where we facilitate indirect clearing services provided by you, for any of your clients that have
opted for a Basic Omnibus Indirect Client Account and that are not part of our group, we may
enter into a principal-to-principal transaction with an affiliate clearing broker, which is amember of such CCP, instead of a transaction directly with such CCP in a long chain

5
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

arrangement under the Indirect Clearing RTS (a Long Chain Arrangement). Under a Long
Chain Arrangement, both the affiliate clearing broker and we would be subject to the relevant
requirements for clearing brokers in the Indirect Clearing RTS. Consequently, any referencesin this document to 'clearing broker' should be read, where relevant, as including us in thecapacity of a client of an affiliate clearing broker under a Long Chain Arrangement.
Please see Part One B for an explanation of how this is relevant to the choice of account types.
What if you want to transfer your Client Transactions to another clearing broker?
There may be circumstances where you wish to transfer some or all of your Client Transactions toanother clearing broker on a business as usual basis (i.e. in the absence of us having been declared in
default by a CCP). We are not obliged to facilitate this under EMIR or the Indirect Clearing RTS but wemay be willing to do so subject to our ability to transfer the CCP Transactions to which they relate andthe margin provided to the CCP in connection with them (which will depend on the relevant CCP's rules)
and any conditions set out in our client clearing agreement. You will also need to find a clearing broker
that is willing to accept such Client Transactions and the related CCP Transactions and assets.
It may be easier to transfer Client Transactions and CCP Transactions that are recorded in an Individual
Client Account than those recorded in an Omnibus Client Account (both types of account being
described in more detail in Part One B) for the same reasons as set out below under "Will the CCP
Transactions and assets relating to you be automatically ported to a back-up clearing broker?".
Similarly, where applicable, it may be easier to transfer Client Transactions relating to your Indirect
Client Transactions and the corresponding CCP Transactions that are recorded in a Gross Omnibus
Indirect Client Account than those recorded in a Basic Omnibus Indirect Client Account (both types ofaccount being described in more detail in Part One B) for the same reasons as set out below under "Willthe CCP Transactions and assets relating to you be automatically ported to a back-up clearing broker?".
What happens if we are declared to be in default by a CCP?
If we are declared to be in default by a CCP, there are two possibilities with respect to the CCP
Transactions and assets related to you and, where applicable, your clients:•

with respect to Individual Client Accounts, Omnibus Client Accounts and Gross Omnibus
Indirect Client Accounts (and, in certain circumstances, Basic Omnibus Indirect Client
Accounts) 1, the CCP will, at your request, try to transfer (port) to another clearing broker (aback-up clearing broker), such CCP Transactions and assets; or•if porting cannot be achieved with respect to such accounts and ordinarily with respect to Basic
Omnibus Indirect Client Accounts, the CCP will terminate the CCP Transactions that relate toyou or your clients, respectively (see "What happens if porting is not achieved" below).

The porting process will differ depending on the CCP but it is likely to involve a close-out (with us) anda re-establishment (with the back-up clearing broker) of the CCP Transactions or a transfer of the open
CCP Transactions and related assets from us to the back-up clearing broker. In some cases CCPs will
support this structure legally by requiring us to grant a security interest to you over some or all of ourrelated rights against the CCP but in other cases where CCPs can rely on EMIR and local legislation,
this is not necessary.

6
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

Will the CCP Transactions and assets relating to you and, where applicable, your clients be
automatically ported to a back-up clearing broker?
No, there will be a number of conditions which must be satisfied before the CCP Transactions and assetsthat relate to you and, where applicable, your clients can be ported to a back-up clearing broker. These
conditions will be set by the CCPs and will include obtaining your consent. In all cases you will need tohave a back-up clearing broker that has agreed to accept the CCP Transactions. You may wish to appointa back-up clearing broker upfront as part of your clearing arrangements but the back-up clearing broker
is unlikely to be able to confirm that it is willing to accept the CCP Transactions until the default occurs.
The back-up clearing broker may also have conditions that they require you to meet. You may also beable to agree with the CCP that it may choose a back-up clearing broker on your behalf. If you have notappointed a back-up clearing broker prior to our default, or agreed with the CCP that it may appoint one
on your behalf, then this may mean that porting is less likely to occur.
If porting is achieved, your Client Transactions with us will terminate in accordance with our client
clearing agreement, but we would expect that any Indirect Client Transactions between you and yourclients would be unaffected. We would expect your back-up clearing broker to put in place new clienttransactions between itself and you.
The type of account and level of segregation will have an impact on the ability to port CCP Transactions
and assets to a back-up clearing broker upon our default.
With regard to a Basic Omnibus Indirect Client Account (described in more detail in Part One B), no
contractual arrangements will be in place for porting and, therefore, porting will ordinarily not be
available 2. With regard to an Omnibus Client Account (described in more detail in Part One B), in mostcases, all of our clients who have CCP Transactions and assets relating to them recorded in the same
Omnibus Client Account will have to agree to use the same back-up clearing broker, and the back-up
clearing broker will have to agree to accept all of the CCP Transactions and assets recorded in that
Omnibus Client Account. It is therefore likely to be difficult to achieve porting in relation to an Omnibus
Client Account or a Basic Omnibus Indirect Client Account.
It should be easier to achieve porting in respect of your positions if you choose an Individual Client
Account (described in more detail in Part One B), because you can appoint a back-up clearing broker
with respect to just your CCP Transactions and the related assets. Similarly, it should be easier toachieve porting in respect of one of your client's positions if such client chooses a Gross Omnibus
Indirect Client Account (described in more detail in Part One B), because it allows one or more of yourclients in the same Gross Omnibus Indirect Client Account to port independently of your other clientsin the same Gross Omnibus Indirect Client Account, and because, unlike a Basic Omnibus Indirect
Client Account, the Gross Omnibus Indirect Client Account at the CCP level relates only to your clients(and not to clients of our other clients).
What happens if porting is not achieved?
Each CCP is permitted to specify a period of time after which, if it has not been able to achieve porting,it will be permitted to actively manage its risks in relation to the CCP Transactions. This period of time
will vary across CCPs. If you want to port your CCP Transactions (where possible), you will need to
notify the CCP and show that you can satisfy the other conditions within this period.

7
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

Otherwise, the CCP will terminate the CCP Transactions and perform a close-out calculation in respectof them in accordance with the CCP rules. If there is an amount owed by the CCP in respect of the CCP
Transactions, to the extent that the CCP knows your identity and how much of that amount relates toyou and, where applicable, your clients, the CCP may pay such amount directly to you. If the CCP does
not know your identity and/or does not know how much of the amount relates to you and, whereapplicable, your clients, the CCP will pay it to us (or our insolvency practitioner) for the account of ourclients.
It is more likely that a CCP will be able to pay any such amount directly to you with respect to an
Individual Client Account or a Gross Omnibus Indirect Client Account (described in more detail in Part
One B). This is because your identity will typically be disclosed to the CCP in these cases.
If the CCP terminates the CCP Transactions, then the Client Transactions between us and the Indirect
Client Transactions between you and your clients are also likely to terminate. The termination
calculations in respect of those Client Transactions and Indirect Client Transactions will be performedin accordance with the client clearing agreement between us and, where applicable, the indirect client
clearing agreement between you and your clients, respectively. Such calculations will likely mirror
those performed by the CCP in respect of the CCP Transactions. If you are due a payment from us as aresult of the close-out calculations in respect of our Client Transactions, the amount due from us to you
will be reduced by any amount that you receive (or are deemed to receive) directly from the CCP.
Please see Part One C for a consideration of the main insolvency considerations.

8
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

Part One B: Account types and the factors to consider
The types of accounts available
Unless specifically stated otherwise, reference to accounts means the accounts in the books and recordsof each CCP. The CCP uses these accounts to record the CCP Transactions that we enter into inconnection with the clearing of your related Client Transactions and any related Indirect Client
Transactions and the assets that we provide to the CCP in respect of such CCP Transactions. 3
Additionally, we will open accounts in our books and records to record the Client Transactions we enter
into with you, some of which may relate to your Indirect Client Transactions (depending on the accounttype), and the assets that you provide to us in respect of such Client Transactions.
There are two basic types of client account available at the CCP level – Omnibus Client Accounts andIndividual Client Accounts. Some of the CCPs then offer different levels of segregation within those as
described in Part Two of this document. Additionally, there are two basic types of indirect client
accounts available at the CCP level – the Basic Omnibus Indirect Client Accounts and Gross Omnibus
Indirect Client Accounts.
As noted, we refer you to the CCP disclosures which CCPs are required to prepare and which set out
the treatment of margin and collateral at CCP level. We have also included below a general overview ofthe most common segregation approaches taken by CCPs, but note that for any particular CCP, there isno substitute for that CCP's own disclosure.
At the clearing broker level, we then open and maintain accounts corresponding to the relevant direct
and indirect clearing accounts at the CCP level as described in more detail below.
Omnibus Client Account 4
Under this account type, at the level of the CCP, the CCP Transactions and assets that relate to them in
the CCP's accounts are segregated from:•any CCP Transactions we are clearing for our own account (our House Transactions)(including corresponding assets in the CCP’s accounts) at the CCP;•

any CCP Transactions (including corresponding assets in the CCP's accounts) relating to any of
our other clients that have opted for an Individual Client Account; and•any CCP Transactions (including corresponding assets in the CCP's accounts) relating to yourclients and any clients of our other clients (regardless of whether they have opted for a Basic
Omnibus Indirect Client Account or a Gross Omnibus Indirect Client Account).

However, the CCP Transactions and assets that relate to you will be commingled with the CCP
Transactions and assets relating to any of our other clients that are recorded in the same Omnibus Client
Account.

9
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

CCP books andrecords

House Accountrecords only our House
Transactions and assets

Omnibus Client
Account

Individual Client
Accounts

record CCP Transactions andassets relating to you and any
number of our other clientsrecord CCP Transactions
and assets relating to only
one of our clients

Basic Omnibus
Indirect Client
Account

Gross Omnibus
Indirect Client
Accounts

records CCP Transactions
and assets relating to all theclients of all our clients thathave opted for a Basic
Omnibus Indirect Client
Account

record CCP Transactions andassets relating to all theclients of one of our clientsthat have opted for a Gross
Omnibus Indirect Client
Account

Can CCP Transactions and related collateral be No
netted with our House Transactions and assets?
Can CCP Transactions and related assets be Yes (provided the other clients' CCP
Transactions and assets are recorded in the samenetted with those relating to our other clients?
Omnibus Client Account)
Can CCP Transactions and related collateral be No
netted with those relating to your clients?
Can CCP Transactions and related collateral be No
netted with those relating to clients of our otherclients?
The CCP will agree not to net the CCP Transactions relating to you with our House Transactions or any
CCP Transactions not recorded in the same Omnibus Client Account, nor use the assets relating to such
CCP Transactions with respect to any House Transaction or CCP Transaction recorded in any otheraccount.
However, both we and the CCP may net the CCP Transactions that are recorded in the same Omnibus
Client Account. The assets provided in relation to the CCP Transactions recorded in the same Omnibus
Client Account can be used in relation to any CCP Transaction (whether it relates to you or to any of
our other clients) credited to that Omnibus Client Account.
Please see Part Two for an overview of the risks you may face if you choose an Omnibus Client Accountand for details of the different levels of segregation that may be available at different CCPs.

10
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

Individual Client AccountUnder this account type, at the level of the CCP, the CCP Transactions and assets that relate to you in
the CCP's accounts are segregated from:•any CCP Transactions (including corresponding assets in the CCP's accounts) relating to ourHouse Transactions;•

any CCP Transactions (including corresponding assets in the CCP's accounts) relating to any of
our other clients (regardless of whether they have opted for an Individual Client Account or an
Omnibus Client Account); and•any CCP Transactions (including corresponding assets in the CCP’s accounts) relating to yourclients and any clients of our other clients (regardless of whether they have opted for a Basic
Omnibus Indirect Client Account or a Gross Omnibus Indirect Client Account).
CCP books andrecords

House Accountrecords only our House
Transactions and assets

Omnibus Client
Account

Individual Client
Account

records CCP Transactions
and assets relating to any
number of our clientsrecords CCP Transactions
and assets relating only toyou

Basic Omnibus
Indirect Client
Account

Gross Omnibus
Indirect Client
Accounts

records CCP Transactions
and assets relating to all theclients of all our clients thathave opted for a Basic
Omnibus Indirect Client
Account

record CCP Transactions andassets relating to all theclients of one of our clientsthat have opted for a Gross
Omnibus Indirect Client
Account

Can CCP Transactions and related collateral be No
netted with our House Transactions and assets?
Can CCP Transactions and related assets be No
netted with those relating to our other clients?
Can CCP Transactions and related collateral be No
netted with those relating to your clients?
Can CCP Transactions and related collateral be No
netted with those relating to clients of our otherclients?
The CCP will agree not to net the CCP Transactions relating to you with our House Transactions, nor
use the assets relating to such CCP Transactions in relation to our House Transactions.

11
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

Further, and in contrast to an Omnibus Client Account, the CCP will agree not to net the CCP
Transactions relating to you that are recorded to an Individual Client Account with any CCP Transaction
recorded to any other account, nor use the assets related to such CCP Transactions in relation to the CCP
Transactions recorded in any other account.
Please see Part Two for an overview of the risks you may face if you choose an Individual Client
Account and additional features of Individual Client Accounts that may be available at different CCPs.
Basic Omnibus Indirect Client AccountUnder this account type, at the level of the CCP, the CCP Transactions (including the corresponding
assets in the CCP's accounts) relating to your clients that have opted for a Basic Omnibus Indirect Client
Account are segregated from:•any CCP Transactions (including corresponding assets in the CCP's accounts) relating to ourHouse Transactions;•

any CCP Transactions (including corresponding assets in the CCP's accounts) relating to yourown account or that of one of our other clients (regardless of whether you/they have opted foran Individual Client Account or Omnibus Client Account); and•any CCP Transactions (including corresponding assets in the CCP's accounts) relating to any ofyour clients or any clients of our other clients that have opted for a Gross Omnibus Indirect
Client Account.

However, the CCP Transactions (including corresponding assets in the CCP's accounts) relating to yourclients that have opted for a Basic Omnibus Indirect Client Account will be commingled with the CCP
Transactions (including corresponding assets in the CCP's accounts) relating to any of your other clientsand any clients of our other clients that have opted for a Basic Omnibus Indirect Client Account andwhich are recorded in the same Basic Omnibus Indirect Client Account.
CCP books andrecords

House Accountrecords only our House
Transactions and assets

Omnibus Client
Account

Individual Client
Accounts

records CCP Transactions
and assets relating to any
number of our clientsrecord CCP Transactions
and assets relating to only
one of our clients

Basic Omnibus
Indirect Client
Account
records CCP Transactions
and assets relating to all yourclients that have opted for a
Basic Omnibus Indirect
Client Account and all theclients of all our other clientsthat have also opted for a
Basic Omnibus Indirect
Client AccountGross Omnibus
Indirect Client
Accounts
record CCP Transactions andassets relating to all theclients of one of our clientsthat have opted for a Gross
Omnibus Indirect Client
Account

12
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

Can CCP Transactions and related collateral be netted No
with our House Transactions and assets?
Can CCP Transactions and related assets be netted with No
those relating to you or our other clients?
Can CCP Transactions and related collateral be netted Yes (provided your other clients' CCP
with those relating to your other clients?
Transactions and assets are recorded in thesame Basic Omnibus Indirect Client
Account)
Can CCP Transactions and related collateral be netted Yes (provided our other clients' clients'
with those relating to clients of our other clients?
CCP Transactions and assets are recordedin the same Basic Omnibus Indirect Client
Account)

The CCP will agree not to net the CCP Transactions relating to your indirect clients that have opted fora Basic Omnibus Indirect Client Account with our House Transactions or any CCP Transactions notrecorded in the same Basic Omnibus Indirect Client Account, nor use the assets relating to such CCP
Transactions with respect to any House Transaction or CCP Transaction recorded in any other account.
However, both we and the CCP may net the CCP Transactions that are recorded in the same Basic
Omnibus Indirect Client Account. The assets provided in relation to the CCP Transactions recorded in
the same Basic Omnibus Indirect Client Account can be used in relation to any CCP Transaction(whether it relates to your indirect clients or indirect clients of any of our other clients) credited to that
Basic Omnibus Indirect Client Account.
Please see Part Two for an overview of the risks in relation to a Basic Omnibus Indirect Client Accountand for details of the different levels of segregation that may be available at different CCPs.
Additionally, at the level of the clearing broker, we then open and maintain accounts corresponding to
the Basic Omnibus Indirect Client Accounts at the CCP level. Under this account type, the Client
Transactions (including the corresponding assets in our accounts) relating to your clients that have opted
for a Basic Omnibus Indirect Client Account are segregated from:•our House Transactions;•

any Client Transactions (including corresponding assets in our accounts) relating to your own
account or that of one of our other clients (regardless of whether you/they have opted for an
Indirect Client Account or Omnibus Client Account);•

any Client Transactions (including corresponding assets in our accounts) relating to any clientsof our other clients that have also opted for a Basic Omnibus Indirect Client Account and which
are recorded in a different Basic Omnibus Indirect Client Account; and13
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

•

any Client Transactions (including corresponding assets our accounts) relating to any of yourclients or any clients of our other clients that have opted for a Gross Omnibus Indirect Client
Account.

However, the Client Transactions (including corresponding assets in our accounts) relating to yourclients that have opted for a Basic Omnibus Indirect Client Account will be commingled with the Client
Transactions (including corresponding assets in our accounts) relating to any of your other clients thathave also opted for a Basic Omnibus Indirect Client Account and which are recorded in the same Basic
Omnibus Indirect Client Account.
Our books andrecords

House Accountrecords only our House
Transactions and assets

Omnibus Client
Account

Individual Client
Accounts

records Client Transactions
and assets relating to any
number of our clientsrecord Client Transactions
and assets relating to only
one of our clients

Basic Omnibus
Indirect Client
Account
records Client Transactions
and assets relating to all yourclients that have opted for a
Basic Omnibus Indirect
Client AccountGross Omnibus
Indirect Client
Accounts
records Client Transactions
and assets relating to all theclients of one of our clientsthat have opted for a Gross
Omnibus Indirect Client
Accounts

Can Client Transactions and related collateral be netted No
with our House Transactions and assets?
Can Client Transactions and related assets be netted with No
those relating to you or our other clients?
Can Client Transactions and related collateral be netted Yes (provided your other clients' Clientwith those relating to your other clients?
Transactions and assets are recorded in thesame Basic Omnibus Indirect Client
Account)
Can Client Transactions and related collateral be netted No
with those relating to clients of our other clients?
We will not net the Client Transactions relating to your clients that have opted for a Basic Omnibus
Indirect Client Account with our House Transactions or any Client Transactions not recorded in thesame Basic Omnibus Indirect Client Account, nor use the assets relating to such Client Transactions
with respect to any House Transaction or Client Transaction recorded in any other account.
However, we may net the Client Transactions that are recorded in the same Basic Omnibus Indirect
Client Account. The assets provided in relation to the Client Transaction credited to that Basic Omnibus
Indirect Client Account can be used in relation to any Client Transaction credited to that Basic Omnibus
Indirect Client Account.

14
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

Gross Omnibus Indirect Client AccountUnder this account type, at the level of the CCP, the CCP Transactions (including the corresponding
assets in the CCP's accounts) relating to your clients that have opted for a Gross Omnibus Indirect Client
Account are segregated from:•any CCP Transactions (including corresponding assets in the CCP's accounts) relating to ourHouse Transactions;•

any CCP Transactions (including corresponding assets in the CCP's accounts) relating to yourown account or that of one of our other clients (regardless of whether you/they have opted foran Individual Client Account or Omnibus Client Account);•

any CCP Transactions (including corresponding assets in the CCP's accounts) relating to any ofyour clients or any clients of our other clients that have opted for a Basic Omnibus Indirect
Client Account; and•any CCP Transactions (including corresponding assets in the CCP's accounts) relating to any
clients of our other clients that have also opted for a Gross Omnibus Indirect Client Accountand which are recorded in a different Gross Omnibus Indirect Client Account.

However, the CCP Transactions (including corresponding assets in the CCP's accounts) relating to yourindirect clients that have opted for a Gross Omnibus Indirect Client Account will be commingled with
the CCP Transactions (including corresponding assets in the CCP's accounts) relating to any of yourother clients that have opted for a Gross Omnibus Indirect Client Account and which are recorded in thesame Gross Omnibus Indirect Client Account. Within the Gross Omnibus Indirect Client Account, the
CCP will keep separate records of the positions of each of your clients that has opted for a Gross
Omnibus Indirect Client Account. The CCP will also calculate the margining requirement separately foreach of your clients that has opted for a Gross Omnibus Indirect Client Account and collect the aggregateof each such margin requirement.
CCP books andrecords

House Accountrecords only our House
Transactions and assets

Omnibus Client
Account

Individual Client
Accounts

records CCP Transactions
and assets relating to any
number of our clientsrecord CCP Transactions
and assets relating to only
one of our clients

Basic Omnibus
Indirect Client
Account
records CCP Transactions
and assets relating to all theclients of all our clients thathave opted for a Basic
Omnibus Indirect Client
Account

Gross Omnibus
Indirect Client
Account
records CCP Transactions
and assets relating to all yourclients that have opted for a
Gross Omnibus Indirect
Client Account

15
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

Can CCP Transactions and related collateral be netted No
with our House Transactions and assets?
Can CCP Transactions and related assets be netted with No
those relating to you or our other clients?
Can CCP Transactions and related collateral be netted The CCP Transactions relating to any one
with those relating to your other clients?
of your clients that has opted for a Gross
Omnibus Indirect Client Account will not
be netted with the CCP Transactions
relating to any of your other clients.
However, the collateral of any one of yourclients that has opted for a Gross Omnibus
Indirect Client Account may be used tocover CCP Transactions of your otherclients to the extent it is recorded in thesame Gross Omnibus Indirect Client
Account.
Can CCP Transactions and related collateral be netted No
with those relating to clients of our other clients?
The CCP will agree not to net the CCP Transactions relating to your clients that have opted for a Gross
Omnibus Indirect Client Account with our House Transactions, your CCP Transactions, the CCP
Transactions relating to our other clients or any CCP Transactions relating to your other clients(regardless of whether they are recorded in the same Gross Omnibus Indirect Client Account).
The CCP will also agree not to use the assets relating to the CCP Transactions relating to your clientsthat have opted for a Gross Omnibus Indirect Client Account with respect to any House Transactions,
your CCP Transactions, the CCP Transactions relating to our other clients or any CCP Transactions
relating to your other clients provided that they are not recorded in the same Gross Omnibus Indirect
Client Account. However, the assets provided in relation to the CCP Transactions relating to one of yourclients that have opted for a Gross Omnibus Indirect Client Account may be used by both the CCP and
us in relation to any CCP Transaction relating to your other clients that have also opted for a Gross
Omnibus Indirect Client Account.
Please see Part Two for an overview of the risks in relation to a Gross Omnibus Indirect Client Accountand for details of the different levels of segregation that may be available at different CCPs.
Additionally, at the level of the clearing broker, we then open and maintain accounts corresponding to
the Gross Omnibus Indirect Client Accounts at the CCP level. Under this account type, the Client
Transactions (including the corresponding assets in our accounts) relating to your clients that have opted
for a Gross Omnibus Indirect Client Account are segregated from:•our House Transactions;

16
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

•

any Client Transactions (including corresponding assets in our accounts) relating to your own
account or that of one of our other clients (regardless of whether you/they have opted for an
Individual Client Account or Omnibus Client Account);•

any Client Transactions (including corresponding assets in our accounts) relating to any of yourclients or any clients of our other clients that have opted for a Basic Omnibus Indirect Client
Account; and•any Client Transactions (including corresponding assets our accounts) relating to any clients of
our other clients that have also opted for a Gross Omnibus Indirect Client Account and which
are recorded in a different Gross Omnibus Indirect Client Account.

However, the Client Transactions (including corresponding assets in our accounts) relating to yourclients that have opted for a Gross Omnibus Indirect Client Account will be commingled with the Client
Transactions (including corresponding assets in our accounts) relating to any of your other clients thathave also opted for a Gross Omnibus Indirect Client Account and which are recorded in the same Gross
Omnibus Indirect Client Account.
Our books andrecords

House Accountrecords only our House
Transactions and assets

Omnibus Client
Account

Individual Client
Accounts

records Client Transactions
and assets relating to any
number of our clientsrecord Client Transactions
and assets relating to only
one of our clients

Basic Omnibus
Indirect Client
Accounts
record Client Transactions
and assets relating to all theclients of one of our clientsthat have opted for a Basic
Omnibus Indirect Client
Account

Gross Omnibus
Indirect Client
Account
records Client Transactions
and assets relating to all yourclients that have opted for a
Gross Omnibus Indirect
Client Accounts

Can Client Transactions and related collateral be netted No
with our House Transactions and assets?
Can Client Transactions and related assets be netted with No
those relating to you or our other clients?
Can Client Transactions and related collateral be netted The Client Transactions relating to any
with those relating to your other clients?
one of your clients that has opted for a
Gross Omnibus Indirect Client (GOIC)
Account will not be netted with the Client
Transactions relating to any of your otherclients. However, the collateral of any oneof your clients that has opted for a GOIC
Account may be used to cover Client
Transactions of your other clients to the17
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

extent it is recorded in the same GOIC
Account
Can Client Transactions and related collateral be netted No
with those relating to clients of our other clients?
We will not net the Client Transactions relating to your clients that have opted for a Gross Omnibus
Indirect Client Account with our House Transactions, your Client Transactions, the Client Transactions
relating to our other clients or any Client Transactions relating to your other clients (regardless ofwhether they are recorded in the same Gross Omnibus Indirect Client Account).
Neither will we use the assets relating to the Client Transactions relating to your clients that have opted
for a Gross Omnibus Indirect Client Account with respect to any House Transactions, your Client
Transactions, the Client Transactions relating to our other clients or any Client Transactions relating to
your other clients provided that they are not recorded in the same Gross Omnibus Indirect Client
Account. However, we may use the assets provided in relation to the Client Transactions relating to oneof your clients that have opted for a Gross Omnibus Indirect Client Account in relation to any Client
Transaction relating to your other clients that have also opted for a Gross Omnibus Indirect Client
Account.
Affiliates
Except for Long Chain Arrangements, we treat our affiliates in the same way as clients when complying
with EMIR and the Indirect Clearing RTS. This means that affiliates also have a choice between typesof account. An affiliate may be part of the same omnibus account as other clients.
Other factors that may impact on the level of protection you receive in respect of assets that you
provide to us as margin for Client Transactions
There are a number of factors that, together, determine the level of protection you will receive in respectof assets that you provide to us as margin for Client Transactions:•

whether you choose an Omnibus Client Account or an Individual Client Account and whether
your clients choose a Basic Omnibus Indirect Client Account or a Gross Omnibus Indirect Client
Account (as discussed under "The types of accounts available" above);•whether, if you choose an Omnibus Client Account, you would want a gross or net account;•in each case, whether such assets are transferred by way of title transfer or security interest;•

whether or not cash that you transfer to us is treated as client money in accordance with the FCA
client money rules;•

whether we call any excess margin from you or you pay excess margin to us;•

whether you will get back the same type of asset as you provided as margin; and•the bankruptcy and other laws that govern us and the CCP.

18
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

The rest of Part One B sets out further details for each of these variables and their implications underEnglish Law.
Would you prefer a gross or net Omnibus Client Account?
Prior to the Indirect Clearing RTS coming into force, the CCPs are only required to offer one type of
Omnibus Client Account (and one type of Individual Client Account) with regard to direct clearing
under EMIR, but some of them have developed a range of accounts within these two types with featuresthat provide different degrees of segregation. These are discussed in more detail in Part Two. There are
two main levels of segregation within Omnibus Client Accounts:•

Net is where the margin called by the CCP in respect of the CCP Transactions is called on thebasis of the net CCP Transactions recorded in the Omnibus Client Account.

•

Gross is where the margin called by the CCP Transactions is called on the basis of the gross
CCP Transactions recorded in the Omnibus Client Account.

These two different versions of the Omnibus Client Account are reflected in the two indirect client
accounts required under the Indirect Clearing RTS, which envisage one gross omnibus account in theform of the Gross Omnibus Indirect Client Account and one omnibus account that may be net in theform of the Basic Omnibus Indirect Client Account.
It may be easier to port CCP Transactions and their related assets, both in business as usual and default
circumstances, with regard to a gross Omnibus Client Account or Gross Omnibus Indirect Client
Account than a net Omnibus Client Account or Basic Omnibus Indirect Client Account. This is because
the CCP is more likely to have sufficient assets to facilitate the porting of the CCP Transactions that
relate to you or, where applicable, your clients and those that relate to another client or, where applicable,
their clients separately if it has called the margin on a gross basis. That said, different CCPs' accounts
have been designed in different ways and so you should consider the CCP's information about the
specific accounts to understand the exact differences. Please see Part Two for more details on this.
Will you provide cash or non-cash assets as margin for the Client Transactions?
As noted under "The "principal-to-principal" clearing model" in Part One A, as a clearing member of
the CCP, we are required to transfer assets to the CCP in respect of the CCP Transactions related to yourClient Transactions and any Indirect Client Transactions. CCPs only accept certain types of liquid cash
and non-cash assets as margin.
As is market practice, we will decide what types of assets to accept from you as margin for your Client
Transactions. This will be set out in the client clearing agreement between us. What we will accept fromyou as margin for the Client Transactions will not necessarily be the same type of assets that the CCPs
will accept from us for the CCP Transactions, in which case we may provide you with a collateraltransformation service, under which we transform the assets you provide to those which we can passonto the CCP.

19
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

Do you provide assets to us on a title transfer or a security interest basis?
As is market practice, we will decide the basis on which we are willing to accept assets from you. As
set out in the client clearing agreement between us we will only accept assets from you on a title transfer
basis.
Title Transfer
Where the client clearing agreement provides for the transfer of assets by way of title transfer, when you
transfer assets (Transferred Assets) to us, we become the full owner of such assets and you lose allrights in such assets. We will record in our books and records that we have received such Transferred
Assets from you with respect to the applicable Client Transaction. We will be obliged to deliver to you
equivalent assets to such Transferred Assets (Equivalent Assets) in the circumstances set out in theclient clearing agreement.
We may either transfer such Transferred Assets on to the CCP with respect to the CCP Transaction
related to the Client Transaction or any Indirect Client Transaction, or we may transfer other assets to
the CCP with respect to such CCP Transaction.
You bear our credit risk with respect to our obligation to deliver Equivalent Assets to you. This meansthat if we were to fail, unless we are declared to be in default by the CCP, you will have no right ofrecourse to the CCP or to any assets that we transfer to the CCP and you will instead have a claim against
our estate for a return of the assets along with all our other general creditors. Even if we are declared to
be in default by the CCP, the extent of your rights in relation to the CCP, if any, will depend on theparticular CCP.
How will we treat cash that you transfer to us as margin?
•

RBC European Limited is an "approved bank" within the meaning of the FCA Handbook.
Money held for you by RBC Europe Limited will be held by RBC Europe Limited as banker
and not as a trustee. As a result the money will not be held in accordance with the rules onclient money in the FCA Handbook. Where money is not held as "client money", you will not
be entitled to specific pools of money under the FCA's Client Money Distribution Rules but
rather be a depositor of RBC Europe Limited as an "approved bank" and treated as an unsecured
creditor accordingly.

How will any excess margin we call from you be treated?
We are required to treat excess margin in a particular way in relation to an Individual Client Account.
Excess margin is any amount of assets we require from you or you provide to us in respect of a Client
Transaction that is over and above the amount of assets the CCP requires from us in respect of the related
CCP Transaction.
If you choose an Individual Client Account we are required to pass all excess margin on to a CCP. If
you provide us with assets which are not related to your individually segregated clearing activities at aparticular CCP and such assets are not dedicated to cover your current positions with that CCP, then we
do not need to post such assets on to that CCP. Also, if the excess margin you provide to us is not in the20
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

form of assets which are eligible to be posted to the CCP (in accordance with the CCP's rules), unless
we agree otherwise, we have no obligation to transform such assets into assets that would be eligible tobe posted to the CCP. The details of this will be set out in the client clearing agreement between you
and us.
If you provide us with collateral in the form of a bank guarantee in our favour, we are not required topost on to the CCP an amount of assets equal to the value of the portion of the bank guarantee which
exceeds the amount of margin we have called from you in respect of the relevant Client Transaction(s).
In relation to an Omnibus Client Account, a Basic Omnibus Indirect Client or a Gross Omnibus Indirect
Client Account, we are not required to pass any excess margin on to the CCP. Depending on the terms
on which we hold excess margin, you may take credit risk on us in respect of it.
Will you get back the same type of asset as you originally provided to us as margin for a Client
Transaction?
In a business as usual situation, whether we will deliver the same type of asset to you that you originallyprovided to us will be governed by the client clearing agreement between us.
In the event of our default, if you are due a payment, you may not receive back the same type of asset
that you originally provided to us. This is because the CCP is likely to have wide discretion to liquidate
and value assets and make payments in various forms, and also because the CCP may not know whatform of asset you originally provided to us as margin for the Client Transaction and as a result of any
asset transformation services we may provide. This risk is present regardless of what type of client
account you select.
Please see Part One C for a consideration of the main insolvency considerations.

21
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

Part One C: What are the main insolvency considerations?
General insolvency risks
If we enter into insolvency proceedings, you may not receive all of your assets back or retain the benefitof your positions and there are likely to be time delays and costs (e.g. funding costs and legal fees)
connected with recovering those assets. These risks arise in relation to Individual Client Accounts,
Omnibus Client Accounts, Basic Omnibus Indirect Client Accounts and Gross Omnibus Indirect Client
Accounts because:•

except for CCP-specific porting solutions described earlier and the comments below under"Margin rights", you will not have any rights directly against the CCP; and you will only havecontractual claims against us (i.e. rather than being able to recover particular assets as owner);•

our insolvency proceedings are most likely to be a version of a process called administration(although it is possible for us to enter into liquidation and other proceedings). In administration,subject to a few exceptions, you will not be able to take any action against us without court orinsolvency official consent (which can be a time consuming process with an uncertain outcome);and•any stage of a cleared transaction (e.g. Indirect Client Transactions, Client Transactions, CCP
Transactions and porting) may be challenged by our insolvency official if, broadly speaking, it
was not on arm's length terms. If successful, the court has broad powers to unwind or vary allof those stages.

Please also note that:•

insolvency law may override the terms of contractual agreements, so you should consider thelegal framework as well as the terms of disclosures and legal agreements;•

a large part of your protection comes from CCP arrangements and the legal regimes surrounding
them. Therefore, you should understand these in order to evaluate the level of protection thatyou have on our default. It is important that you review the relevant disclosures by the CCP in
this respect; andInsolvency of CCPs and others
Except as set out in this section "Insolvency of CCPs and others", this disclosure deals only with ourinsolvency. You may also not receive all of your assets back or retain the benefit of your positions if
other parties in the clearing structure default – e.g. the CCP itself, a custodian or a settlement agent.
In relation to CCP insolvency, broadly speaking our (and therefore your) rights will depend on the lawof the country in which the CCP is incorporated (i.e. not necessarily English law) and the specificprotections that the CCP has put in place. You should review the relevant CCP disclosures carefully inthis respect and take legal advice to fully understand the risks in this scenario.

22
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

In addition, please note the following:•

we expect that an insolvency official will be appointed to manage the CCP. Our rights against
the CCP will depend on the relevant insolvency law and/or that official;•

it will be difficult or impossible to port CCP Transactions and related margin, so it would bereasonable to expect that they will be terminated at CCP level. The steps, timing, level of control
and risks relating to that process will depend on the CCP, its rules and the relevant insolvency
law. However, it is likely that there will be material delay and uncertainty around when andhow much assets or cash we will receive back from the CCP. Subject to the bullet points below,
it is likely that we will receive back only a percentage of assets available depending on theoverall assets and liabilities of the CCP;•

it is unlikely that you will have a direct claim against the CCP because of the principal-to­principal model described in Part One A;•

under the client clearing agreement, Client Transactions will terminate at the same time as thematching CCP Transactions unless the relevant CCP rules provide otherwise. This will resultin a net sum owing between you and us. However, your claims against us are limited recourse
so that you will only receive amounts from us in relation to Client Transactions if we receive
equivalent amounts from the CCP in relation to relevant CCP Transactions;•

if recovery of margin in this scenario is important, then you should explore "bankruptcy remote"or "physical segregation" structures offered by some CCPs. These tend to be offered only in
relation to Individual Client Accounts and generally involve either:•you or us retaining assets in your/our name and only giving a security interest over thatmargin to the CCP (i.e. it allows the CCP to apply margin if we default but should keep
the assets out of the CCP's insolvency if it defaults); or•

the CCP holding the assets in a blocked or controlled margin account and giving asecurity interest (or similar legal right) over the margin back to us, to you and/or to atrustee on our behalf.

It is beyond the scope of this disclosure to analyse such options but your due diligence on themshould include analysis of matters such as whether other creditors of the type described in"Porting – preferential creditors" below will have priority claims to margin; whether margin or
positions on one account could be applied against margin or positions on another account(notwithstanding the contractual agreement in the CCP's rules); the likely time needed to recover
margin; whether the margin will be recovered as assets or cash equivalent; and any likely
challenges to the legal effectiveness of the structure (especially as a result of the CCP's
insolvency).
Margin rights
If you provide assets to us by way of security interest and we have not exercised a right of use over thoseassets, then you should have a legal right to recover the balance of those assets (after settling yourobligations to us) ahead of other creditors. However, please note that, depending on the exact set up of

23
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

our security arrangements, it may be that some preferential creditors will still have a prior claim to yourassets (please see "Porting – preferential creditors" below which deals with a similar point).
If you have retained the assets (e.g. in a custody account over which you have given us a security interest)
then you will have the best chance of recovering them. If you have transferred the assets to our name by
way of security (e.g. by giving us a mortgage over the assets) then you bear more risk if there is a
shortfall in any of the assets that we are holding. Generally speaking, your risk of loss will be highest in
relation to non-client money cash margin; lower in relation to securities held by us in an omnibus
account; and lower still if securities are segregated in our books and records and at custody level
identifying you as the client.
The actual result will be highly fact specific and will depend on, amongst other things, the exact termsof our legal arrangements; how we have operated accounts; and claims that other intermediaries (e.g.
custodians and settlement systems) have to those assets.
As an exception to this general position, we would also expect client money protection (please see Part
One B) to be effective in our insolvency.
We do not expect the above position to change materially if you have an Individual Client Account,
Omnibus Client Account, Basic Omnibus Indirect Client Account or Gross Omnibus Indirect Client
Account.
Companies Act 1989, Part VII
Part VII applies because we are an English company (generally speaking, it does not apply to nonEnglish companies) and gives specific protection against some of the legal risks that arise on our
insolvency. Generally speaking, if we are declared in default by a CCP that has the benefit of Part VII
protection, then our insolvency official cannot challenge actions taken by the CCP against us under its
default rules:•

to settle our CCP Transactions or to transfer those CCP Transactions and related assets to a
back-up clearing broker; or•to transfer our Client Transactions with you and related assets to the same back-up clearing
broker.

This Part VII protection generally applies to actions taken by English CCPs that have been (re)authorisedby the Bank of England. It can also protect actions taken by non-English CCPs that have been authorised
or recognised by other competent authorities or ESMA (as applicable) provided that the non-English
CCP's default provisions either meet certain requirements set out in the UK Recognition Requirementsor the non-English CCP has applied for and the Bank has granted an order stating that Part VII will
apply to transfers of assets and positions under that non-English CCP's default provisions.
In either case, Part VII focuses on protecting counterparties from our default. It is not clear that it would
provide any wider protection – e.g. if the CCP itself became insolvent.
Please note that Part VII is a complex and unclear piece of legislation and this summary is not a substitutefor detailed legal analysis – particularly of Part VII in the context of the relevant CCP's regulatory
authorisations and default rules - with your professional advisors.

24
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

Please see below an outline of some specific insolvency risks and related Part VII commentary.
The protection is from insolvency law so will not necessarily help, for example, with the issue describedunder "Porting – preferential creditors" below because that relates, at least in part, to security law.
Close-out netting
If we default and the CCP cannot port the CCP Transactions and collateral (e.g. because a back-up
clearing broker cannot be found or, ordinarily, because the relevant positions are in a Basic Omnibus
Indirect Client Account) then we would expect it to terminate and net our CCP Transactions and apply
related assets.
You and we would want this to work differently from normal bilateral close-out netting that would apply
to all positions and assets between us and the CCP – e.g. assets on an Individual Client Account relating
to you could be netted with our house or another client account at the CCP. There is a risk that thisnetting across accounts could happen automatically as a result of ordinary English insolvency law.
However, to the extent that the CCP has Part VII protection, this should not occur.
A similar risk occurs between us and you in relation to Client Transactions.
It is most likely to materialise in a pre-porting period during which English law may automatically set
off Client Transactions and collateral relating to one CCP with Client Transactions and collateral relating
to another. This risk arises regardless of what you and we may provide for in our clearing documentation.
Whilst the resulting termination amount should represent our net exposure to each other, it will makeporting difficult or impossible.
It is unclear whether Part VII provides you protection in this case. However, there are certain industrywide legal opinions that have been prepared on the effectiveness of close-out provisions in standard
client clearing agreements. You should seek legal advice and/or access to such opinions for more
information in this respect.
Please also note more generally that your freedom to close out Client Transactions is more limited under
the client clearing agreement than in other arrangements that you may be used to. In particular, the main
termination event under our client clearing agreement is that the relevant CCP has declared us to be in
default under the CCP's rules. The intention is to match the treatment of CCP Transactions and Client
Transactions as much as possible. However, this may mean that – unless the CCP declares a default
under its rules - you cannot terminate Client Transactions for common reasons such as a payment or
insolvency default on our part.
Porting - prohibition
As mentioned above, except in specific (e.g. physically segregated) structures, a CCP only owes us (notyou) obligations in relation to CCP Transactions and related assets.
As a result, when these contracts and assets are transferred to a back-up clearing broker, there is a riskof insolvency challenge because our rights have effectively been taken from us on or around the time of
our insolvency. Applicable laws may not permit this and there is a risk that the courts may therefore notpermit, or may unwind, any porting and related Client Transactions with your back-up clearing broker.

25
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

That said, we expect the risk of challenge to be low in relation to CCP Transactions and matchingtransfer of Client Transactions that are ported in accordance with the default rules of a CCP that has Part
VII protection.
Porting - preferential creditors
As mentioned under "What happens if we are declared to be in default by a CCP?" in Part One A, a
CCP's porting structure may be based on or supported by a security interest. This can take different
forms but generally involves us creating security over our rights against the CCP in relation to an
Individual Client Account, Omnibus Client account or Gross Omnibus Indirect Client Account in yourfavour or in favour of another person (e.g. an independent trustee) to hold the security on your behalf.
Broadly speaking, the security interest should support the argument that these assets are not part of ourinsolvency estate (i.e. are not to be shared with our other creditors).
However, depending on the exact structure, insolvency law gives certain statutory creditors priority oversecured creditors. This means that some creditors may have a claim on client account assets ahead ofyou. Statutory creditors are likely to include, amongst others, our insolvency official (e.g. in respect ofits costs and expenses), a relatively small amount of unsecured creditors, some employee salaries andpension contributions.
Mismatch of CCP/Client Transactions and assets
It could be that our net assets in relation to CCP Transactions do not match our net obligations to eachother in relation to the matching Client Transactions. This can slow down or make porting impossible
either operationally or legally.
For example, it may occur at CCP level as a result of Fellow Client Risk (see the explanation of thisterm in Part Two of this document) in an Omnibus Client Account or a Gross Omnibus Indirect Client
Account, with the result that there are insufficient assets available for porting to satisfy our obligations
to you in relation to the Client Transactions.
Alternatively, it could be that all of your Client Transactions with us are netted automatically as a resultof English insolvency law (please see above under "Close-out netting").

26
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

Banking Act 2009
Banking Act applies because we are an English company that falls within its scope. As a result, in serious
circumstances, we may be nationalised or we (or any of our assets and liabilities) may be transferred toa third party by a combination of the Treasury, Bank of England or FCA. It is also possible that we may
become subject to resolution measures and that your termination rights (where these are exercisable byvirtue of such resolution measures) may be disapplied or that some of our liabilities owed to you may
be bailed in. In these scenarios, your counterparty and/or your counterparty risk may change. It is
unlikely that you will be able to stop such transfer or bail-in, or to enforce any early termination rights
against us as a result of such actions.

27
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

Part Two: CCP client account structures
As noted in Part One B, each CCP may offer at least one Omnibus Client Account and/or at least one
Individual Client Account by changing some of the features. This Part Two contains an overview of themain levels of segregation within each account type of which we are aware that the CCPs offer withrespect to direct clearing, and are likely to offer with indirect clearing, together with an overview of themain protections afforded by and the main legal implications of each.
The descriptions given in this Part Two are very high level and consider the typical features of theseclient account types and the minimum requirements for indirect client account types under the Indirect
Clearing RTS, and the respective levels of segregation. However, the particular characteristics of theaccounts will affect the exact levels of protection they offer and the legal implications so you must
review the information provided by the CCPs to fully understand the risks of the specific account wemaintain in relation to you at each CCP.
Each CCP is required to publish information about the client account structures it offers under EMIR
and we have provided a link to the relevant part of the website of each CCP we use 5. You may also needto seek professional advice to understand the differences in detail. However, we hope that the questions
raised and factors described in both parts of this document will help you to know which questions to ask
and to understand the impact of the answers you receive.
The descriptions of the client accounts have been prepared on the basis of publicly available disclosure
documents made available by a selection of CCPs. We are not responsible for, and do not accept any
liability whatsoever, for any content or omissions or inaccuracies contained in the information produced
by any CCP. The descriptions of the indirect client accounts have been prepared on the basis of theminimum requirements in the Indirect Clearing RTS.
The Annex seeks to compare the main account types and levels of segregation against the following
risks:
Risks used to compare each account type andlevel of segregation

Explanation of risk

Transit Risk

Whether you are exposed to us at any point in
the process of providing or receiving margin in
respect of Client Transactions.

Fellow Client Risk

Whether assets provided to the CCP in respectof CCP Transactions related to you/ your clients
could be used to cover losses in CCP
Transactions relating to another client/ clients ofanother client.

Liquidation Risk

Whether, if the CCP Transactions and assets
relating to them were to be ported, there is a riskthat any non-cash assets would be liquidated
into cash. If this were to happen, the value given

28
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

Risks used to compare each account type andlevel of segregation

Explanation of risk
to such assets by the CCP may differ from what
you perceive to be the full value of the assets.

Haircut Risk

Whether the value of the assets that relate to
CCP Transactions might be reduced or notincrease by as much as you expect because the
CCP applied a haircut that did not properlyreflect the value of the asset.

Valuation Mutualisation Risk

Whether the value of the assets that relate to
CCP Transactions could be reduced or notincrease by as much as you expect because theassets posted in relation to other clients' CCP
Transactions have decreased in value.

CCP Insolvency Risk

Whether you are exposed to the insolvency orother failure of the CCP.

29
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

Typical account characteristics at the CCP level

Net Omnibus Client
Account

Basic Omnibus
Indirect Client
Account

Gross Omnibus Client
Account

Gross Omnibus
Indirect Client
Account

Individual Client
Account

Net Omnibus Client
Accounts record both
assetsand
CCP
Transactions that relate
to you and the assets
and CCP Transactions
that relate to one ormore of our otherclients.

Basic Omnibus Indirect
Client Accounts record
both assets and CCP
Transactions that relate
to your clients that have
opted for a Basic
Omnibus Indirect Client
Account and the assets
and CCP Transactions
that relate to the clientsof our other clients thathave opted for Basic
Omnibus Indirect Client
Account.

Gross Omnibus Client
Accounts record assets
and CCP Transactions
that relate to you and theassetsand
CCP
Transactions that relate
to one or more of ourother clients.

Gross Omnibus Indirect
Client Accounts record
assetsand
CCP
Transactions that relate
to your clients that have
opted for a Gross
Omnibus Indirect Client
Account.

Only assets and CCP
Transactions that relate
to you should berecordedinan
Individual
ClientAccount.

Which losses can Assets that are provided
assets recorded in the to the CCP as margin
for a CCP Transaction
account be used for?
recorded in a net
Omnibus
ClientAccount may be used tocover any losses in that
account, whether suchlosses relate to the CCP

Assets that are provided
to the CCP as margin
for a CCP Transaction
recorded in a Basic
Omnibus Indirect Client
Account may be used tocover any losses in that
account, whether suchlosses relate to the CCP

Assets that are provided
to the CCP as margin
for
the
CCP
Transactions recorded
in a gross Omnibus
Client Account may be
used to cover any losses
in that account, whether
such losses relate to the

Assets that are provided
to the CCP as margin
for
the
CCP
Transactions recorded
in a Gross Omnibus
Indirect Client Accountmay be used to cover
any losses of any ofyour clients in that

Assets that are provided
to the CCP as margin
for CCP Transactions
recordedinan
Individual
ClientAccount may only be
used to cover losses inthat account. 7

Who will the CCP
Transactions recordedin the account relateto?

Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure Document in which both the International Swaps and Derivatives
Association, Inc. and FIA, Inc. have copyright.

Net Omnibus Client
Account

Basic Omnibus
Indirect Client
Account

Gross Omnibus Client
Account

Gross Omnibus
Indirect Client
Account

Individual Client
Account

Transactions relating to
you
or
CCP
Transactions relating toanother client.

Transactions relating to
your clients or CCP
Transactions relating toclients of our otherclients.

CCP
Transactions account. 6
relating to you or CCP
Transactions relating toanother client.

Will the CCP know
which
CCP
Transactions
andtypes of assets relate toyou/ your clients?

The CCP may not know
which
CCP
Transactions and assets
recorded in a net
Omnibus
ClientAccount relate to you.

The CCP may not know
which
CCP
Transactions and assets
recorded in a Basic
Omnibus Indirect Client
Account relate to yourindividual clients.

The CCP may not know
which
CCP
Transactions and assets
recorded in a grossOmnibus
ClientAccount relate to you.

The CCP will know Yes
which
CCP
Transactions relate toyour clients, but may
not know which typesof assets relate to yourclients.

Will the CCP record
the assets provided byvalue only or will it
identify the type of
asset provided?

The CCP may identify
in its records the type of
asset
providedasmargin for the net
Omnibus
ClientAccount but will not beable to identify which
type of assets relate toanyclient's
CCP
Transactions within that

The CCP may identify
in its records the type of
asset
providedasmargin for the Basic
Omnibus Indirect Client
Account but will not beable to identify which
type of assets relate to
any indirect client's
CCP
Transactions

The CCP may identify
in its records the type of
asset
providedasmargin for the grossOmnibus
ClientAccount but is unlikely
to be able to identify
anything other than thevalue of the assets
provided in respect of

The CCP may identify
in its records the type of
asset
providedasmargin for the Gross
Omnibus Indirect Client
Account but is unlikely
to be able to identify
anything other than thevalue of assets provided
in respect of any of yourThe
CCP
shouldidentify in its records
the type of asset
provided as margin for
an Individual Client
Account.

Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure Document in which both the International Swaps and Derivatives
Association, Inc. and FIA, Inc. have copyright.

Net Omnibus Client
Account
net Omnibus
Account.

Will the CCP
Transactions
recorded in theaccount be netted?

Basic Omnibus
Indirect Client
Account

Gross Omnibus Client
Account

Gross Omnibus
Indirect Client
Account

Client within
that
Basic anyclient's
CCP
Omnibus Indirect Client Transactions within that
Account.
gross Omnibus Client
Account.

client's
CCP
Transactions within that
Gross Omnibus Indirect
Client Account.

CCP
Transactions
relating you in theaccount will be netted
with
other
CCP
Transactions relating toyou. However CCP
Transactions relating to
you should not be nettedwith CCP Transactions
relating to any of ourother clients recorded in
the
same
Gross
Omnibus
ClientAccount.

CCP
Transactions
relating to any one ofyour clients in theaccount will be netted
with
other
CCP
Transactions relating to
that
same
client.
However,
CCP
Transactions relating tothat client should not be
nettedwith
CCP
Transactions relating to
any of your other clientsrecorded in the same
Gross Omnibus Indirect
Client Account.

It is likely that the CCP
Transactions recordedin the account will be
netted. This means that
CCP Transactions that
relate to you may be
nettedwith
CCP
Transactions that relate
to our other clients
whose
CCP
Transactions
arerecorded in the same net
Omnibus
ClientAccount.

It is likely that the CCP
Transactions recordedin the account will be
netted. This means that
CCP Transactions that
relate to your clients
may be netted with CCP
Transactions that relate
to clients of our otherclients whose CCP
Transactions
arerecorded in the same
Basic Omnibus Indirect
Client Account.

Individual Client
Account

CCP Transactions arelikely to be netted, butshould not be netted
againstthe
CCP
Transactions relating to
any of our other clients.

Will the margin be The margin will be The margin will be The margin will be The margin will be The margin requirement
calculated on a gross calculated on a net calculated on a net calculated on a gross calculated on a gross for an Individual Client
basis.
basis.
basis.
basis.
Account will typicallyor net basis?
be calculated on a net
Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure Document in which both the International Swaps and Derivatives
Association, Inc. and FIA, Inc. have copyright.

Net Omnibus Client
Account

Basic Omnibus
Indirect Client
Account

Gross Omnibus Client
Account

Gross Omnibus
Indirect Client
Account

Individual Client
Account
basis.

Will you have to enter
into
any
documentation
or
operationalarrangements directlywith the CCP?

You may have to enter
into
legal
documentation to which
the CCP is party. It is
unlikely that you will
have to set up any
operationalarrangements with the
CCP directly.

You may have to enter
into
legal
documentation to which
the CCP is party. It is
unlikely that you will
have to set up any
operationalarrangements with the
CCP directly.

You may have to enter
into
legal
documentation to which
the CCP is a party. It is
possible but unlikelythat you will have to set
up
operationalarrangements with the
CCP directly.

You may have to enter
into
legal
documentation to which
the CCP is party. It is
possible but unlikelythat you will have to set
up some operationalarrangements with the
CCP directly.

You may have to enter
into
legal
documentation to which
the CCP is a party. It isalso possible that you
will have to set up some
operationalarrangements with the
CCP directly.

Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure Document in which both the International Swaps and Derivatives
Association, Inc. and FIA, Inc. have copyright.

Basic Omnibus
Indirect Client
Account

Net Omnibus Client
Account

Gross Omnibus
Indirect Client
Account

Gross Omnibus Client
Account

Individual Client
Account

Transit Risk

Yes

Yes

Yes

Yes

Yes

Fellow Client Risk

Yes

Yes

Yes

Yes

No

Liquidation Risk

Yes (unless the CCP isable to port the assets
recorded in the account oris able to transfer theassets to you without
needing to liquidate someor all of them first).

Yes

Yes (unless the CCP isable to port the assets
recorded in the account oris able to transfer theassets to you without
needing to liquidate someor all of them first).

Yes (unless the CCP isable to port the assets
recorded in the account oris able to transfer theassets to you without
needing to liquidate someor all of them first).

Yes (unless the CCP isable to port the assets
recorded in the account oris able to transfer theassets to you without
needing to liquidate someor all of them first).

Haircut Risk

Yes

Yes

Yes

Yes

Yes

Valuation Mutualisation
Risk

Yes

Yes

Yes

Yes

No

CCP Insolvency Risk

Yes

Yes

Yes

Yes

Yes

How likely it is that
porting will be achieved
if we default?

There is a significant riskthat porting will not be
achieved in respect ofpositionsandassetsrecorded in a net Omnibus
Client Account.

Unlikely

There is a significant riskthat porting will not be
achieved in respect ofpositionsandassetsrecorded in a grossOmnibus Client Account.

If you have satisfied all of
the CCP's and back-up
clearing
member's
conditions, porting ismore readily facilitated in
the event of our default.

If you have satisfied all of
the CCP's and back-up
clearing
member's
conditions, porting ismore readily facilitated in
the event of our default.

Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure Document in which both the International Swaps and Derivatives
Association, Inc. and FIA, Inc. have copyright.

Additional features that may be available for Individual Client Accounts
Some CCPs may offer additional Individual Client Accounts with special features that have been designed to mitigate certain of the risks identified under"Typical account structures" above. Below is a high level overview of some of the common additional features. The extent to which any risks are mitigated bythese additional features, if at all, will depend on the structures used by an individual CCP. Again, therefore, you must review the information provided by the
CCPs in order to evaluate the actual risks to you and you may need some professional advice. It is likely that these additional features will only be available tocertain types of clients that meet each CCP's requirements. These additional features are not required by EMIR. Accordingly, not all CCPs will offer them nor
are we obliged to facilitate access to them.
Additional feature

High level overview of the additional feature

Which risks might this feature
mitigate?

Extended porting period

In the event of our default, this feature has been designed to allow more time for porting This may make porting more
to be achieved.
likely to be achieved.
For a set period of time (decided by the CCP) following our default, the CCP
Transactions and assets that relate to you will continue to be held in an account which
the CCP will identify as directly relating to you. If you find a back-up clearing broker,
these CCP Transactions and assets will then be transferred to one of their client accounts.
If you do not find a back-up clearing broker, they will be terminated and the close-out
value returned to you.
Where the CCP treats the Client as an interim Clearing Member, it is possible that the
CCP may expect you to contribute to the default fund and may require additional margin,
including variation margin, to be provided in respect of the CCP Transactions transferred
to you.
It is possible that you may have to set up such accounts as the CCP requires and have theability to make payments directly to the CCP. The CCP may also have an additional listof requirements that you will have to satisfy to be able to use the extended porting period.

Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure Document in which both the International Swaps and Derivatives
Association, Inc. and FIA, Inc. have copyright.

Additional feature

High level overview of the additional feature

Which risks might this feature
mitigate?

Separate custody account (inthe name of the CCP) for theassets that have been
provided as margin for
positions relating to you

The assets relating to your positions are held in a separate account (in the CCP's name) This may make porting moreat the CCP's custodian from any other assets held for the CCP.
likely to be achieved.

Ability for you to keep assets
required as margin for
positions relating to you in acustody account in yourname.

It is likely that you will have to enter into additional legal documentation and security Transit Risk
arrangements with us and the CCP, and any custodian or settlement bank used under thisCCP Insolvency Risk
structure.
This may make porting more
This additional feature may be restricted to certain types of non-cash assets.
likely to be achieved.
The custodian may be specified by or require the approval of the CCP.

It is likely that you will have to enter into additional legal documentation with us and the
CCP.

There will be additional operational requirements that you will need to meet in order to
use this type of additional feature.
Ability for you to post You may be able to post margin directly to the CCP rather than you posting it to us, and Transit Risk
margin directly to the CCP. us in turn posting it on to the CCP.
This form of account may require you to have an account with particular custodians andsettlement banks. The custodians and settlement banks are likely to be specified by the
CCP.
You will have to enter into additional legal documentation with us and the CCP.
There will be additional operational requirements which you will need to meet in order
to use this type of additional feature.

Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure Document in which both the International Swaps and Derivatives
Association, Inc. and FIA, Inc. have copyright.

Links to CCP disclosure documents
Please note that these links have been included for convenience only. In the event that any of them do
not work, you should contact the relevant CCP directly.

For Direct CCPs:
Eurex Clearing AG:
http://www.eurexclearing.com/clearing-en/risk-management/client-asset-protection/143894/
ICE Clear Europe:
https://www.theice.com/clear-europe/risk-management
LCH Clearnet Ltd:
http://www.lchclearnet.com/about_us/corporate_governance/ltd_account_structures_under_emir.asp
LCH Clearnet SA:
http://www.lchclearnet.com/about_us/corporate_governance/sa_account_structures_under_emir.asp
LME Clear:https://www.lme.com/lme-clear/rules-and-regulations/client-information/#tabIndex=0

Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.

1

Porting may be envisaged under local insolvency law for all relevant accounts, including Basic Omnibus Indirect Client Accounts.

2

This paragraph refers to porting not being available "ordinarily" with regard to Basic Omnibus Indirect Client Accounts. This isbecause porting with respect to such accounts is not required under the Indirect Clearing RTS but may be envisaged under local
insolvency law for all relevant accounts, including Basic Omnibus Indirect Client Accounts.

3

This meaning is derived from Article 39(9) EMIR.

4This description is based on Articles 39(2) and 39(9) EMIR.

5

The links are to the documents used to prepare the summary in Part Two. It is not clear whether these are the documents published by
the CCPs pursuant to Article 39(7) and we assume they may be updated in due course in any event.

6

Please note that the clearing agreement between you and us may allow us to apply any positive liquidation balance of your proprietaryaccount to any negative liquidation balances owed in respect of your clients' accounts.

7

Please note that the clearing agreement between you and us may allow us to apply any positive liquidation balance of your proprietary
ICA to any negative liquidation balances owed in respect of your clients' accounts.

Copyright © 2017 by FIA, Inc. FIA, Inc. has not reviewed or endorsed any modifications that may have been
made to this document.
This document is based on the January 2016 version of the ISDA and FIA Clearing Member Disclosure
Document in which both the International Swaps and Derivatives Association, Inc. and FIA, Inc. have copyright.