from the Clearing Members’ positions and collateral as well as APEX Clear’s own funds. APEX Clear further holds Customers’ collateral in trust for the benefit of Customers and in accordance with regulation 23 of the SF (Clearing Facilities) Regulations. Reconciliation of Customers’ positions and assets at participant level is done on a daily basis.
14.3	A CCP should structure its portability arrangements in a way that makes it highly likely that the positions and collateral of a defaulting participant’s customers will be transferred to one or more other participants.
APEX Clear’s Clearing Rules and Default Management Plan allow positions and collateral of a defaulting Clearing Member’s customers to be transferred to one or more surviving Clearing Members provided that conditions previously mentioned are fulfilled. APEX Clear will also obtain the consent of the receiving Clearing Members before effecting the transfers. This will help APEX Clear enhance the efficiency of the portability arrangement in the event of a Clearing Member default situation.
14.4	A CCP should disclose its rules, policies, and procedures relating to the segregation and portability of a participant’s customers’ positions and related collateral. In particular, the CCP should disclose whether customer collateral is protected on an individual or omnibus basis. In addition, a CCP should disclose any constraints, such as legal or operational constraints, that may impair its ability to segregate or port a participant’s customers’ positions and related collateral.
APEX Clear’s segregation and portability arrangements are contained in Clearing Rule 415 as well as in the Clearing Procedures which are available on APEX Clear’s website. Customer collateral will be protected from the default of Clearing Members as well as any insolvency of APEX Clear. At present, APEX Clear does not offer individually segregated accounts at the customer level and all customer collateral will be commingled in multiple omnibus bank accounts and accounted for on a per Clearing Member basis. This account structure is clearly detailed in APEX Clear’s Clearing Rules and Procedures. Clearing Members can also access APEX Clear’s Clearing System to view the amount of collateral balance held in their accounts.
Principle 15: General business risk An FMI should identify, monitor, and manage its general business risk and hold sufficient liquid net assets funded by equity to cover potential general business losses so that it can continue operations and services as a going concern if those losses materialise. Further, liquid net assets should at all times be sufficient to ensure a recovery or orderly wind-down of critical operations and services.
15.1	An FMI should have robust management and control systems to identify, monitor, and manage general business risks, including losses from poor execution of business strategy, negative cash flows, or unexpected and excessively large operating expenses.
The Board and management team of APEX Clear comprise of individuals equipped with extensive knowledge of and experience in the industry, including strong track record in establishing robust corporate governance and controls framework. Their skills and expertise will assist APEX Clear in identifying, monitoring and managing its general business risks. The following committees provide strong governance over the general business risks faced by APEX Group, including APEX Clear.