(II) FINANCE PROCEDURES

INDEX

1. General....................................................................................................................................... 2

2. Cash collateral............................................................................................................................ 4

3. Triparty Collateral...................................................................................................................... 4

4. Assured Payment System: Accounts.......................................................................................... 8

5. Assured Payment System: Procedures..................................................................................... 11

6. Payments To And From The Clearing House .......................................................................... 13

7. Custody Accounts.................................................................................................................... 23

8. Permitted Cover: Securities...................................................................................................... 24

9. Intentionally Omitted. .............................................................................................................. 24

10. Permitted Cover: Gold Bullion ................................................................................................ 24

11. Settlement Procedures For Non-Cash Collateral...................................................................... 26

12. Intentionally omitted................................................................................................................ 29

13. Risk Management .................................................................................................................... 29

14. Guaranty Fund Parameters And Restrictions........................................................................... 31

15. Clearing House Contributions.................................................................................................. 32

1 September 2021
EUROPE/1011922968.3 2

1. GENERAL

1.1 These Finance Procedures are 'Procedures' as defined in the ICE Clear Europe rules (the "Rules") 

and are subject to the Rules, including, without limitation, Rule 102. These Finance Procedures 

set out details on how Clearing Members’ and Sponsored Principals' financial obligations are met, 

including the provision of cash and securities to the Clearing House.

1.2 The Clearing House will execute and initiate a range of financial transactions on a daily basis to manage 

Clearing Members’ and Sponsored Principals' requests, rights, liabilities and obligations. Such 

transactions will result in payments being made to cover Margin obligations and to pay fees, among 

others. ICE Clear Europe has established a network of Approved Financial Institutions for this purpose. 

This is also known as the “Assured Payment System” or “APS”.

1.3 These Finance Procedures apply in relation to F&O Clearing, CDS Clearing and FX Clearing.

1.4 Subject to paragraph 1.5 to 1.10 below, these Finance Procedures, and all non-contractual obligations 

arising out of or in connection with them, are governed by and shall be construed in accordance with 

English law and any Dispute under these Finance Procedures will be subject to arbitration under Rule 

117. 

1.5 Solely as between an FCM/BD Clearing Member and the Clearing House, those provisions of these 

Finance Procedures inasmuch as they relate solely to an issue or matter concerning:

(a) the pledging, transfer, holding, use and segregation of Pledged Collateral provided by an 

FCM/BD Clearing Member (or other property, excluding for the avoidance of doubt the 

Contracts themselves recorded in such an Account, recorded in a Customer Account or 

Proprietary Account that is designated as an account in respect of which Pledged Collateral may 

be provided by an FCM/BD Clearing Member); and/or

(b) the application of any net sum owed in favour of the FCM/BD Clearing Member in respect of a 

Customer Account or Proprietary Account that is designated as an account in respect of which 

Pledged Collateral may be provided,

and, solely to the extent relevant to interpreting the foregoing provisions in such circumstances, relevant 

definitions and interpretative provisions in paragraph 1 of these Finance Procedures (such provisions, 

together or separately "Pledged Collateral Matters") shall be governed by and construed in accordance 

with the laws of the State of New York and, as applicable, the federal law of the United States of America.

1.6 For the avoidance of doubt, paragraph 1.5 is an exception to paragraph 1.4 and Rule 102(s) which provide 

that the Finance Procedures and Rules respectively shall be governed by and construed in accordance 

with the laws of England and Wales. For the avoidance of doubt, without limitation and notwithstanding 

paragraph 1.5, the following are governed by and shall be construed in accordance with the laws of 

England and Wales in their entirety without any exception and shall in no circumstances constitute a 

Pledged Collateral Matter:

(a) all of the provisions of these Finance Procedures relating to the Designated System;

(b) any Dispute or issue arising as between a Non-FCM/BD Clearing Member or Sponsored 

Principal on the one hand and the Clearing House on the other hand;

(c) any Dispute or issue arising in respect of a Customer Account or Proprietary Account that is not 

designated as an account in respect of which Pledged Collateral may be provided; 

(d) any matter relating to Pledged Collateral of a Non-FCM/BD Clearing Member or a Sponsored 

Principal;
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(e) any Pledged Collateral provided by an FCM/BD Clearing Member or Sponsored Principal 

pursuant to an English law Pledged Collateral Addendum; and

(f) the Contract Terms of all Contracts.

1.7 Where a dispute between an FCM/BD Clearing Member and the Clearing House relates to one or more 

Pledged Collateral Matters, notwithstanding the provisions of Rule 117, solely the allegations or claims 

relating to the Pledged Collateral Matters in such dispute shall be heard and determined exclusively in 

any New York federal court sitting in the Borough of Manhattan of the City of New York, provided, 

however, that if such federal court does not have jurisdiction over such allegations or claims, such 

allegations or claims shall be heard and determined exclusively in any New York state court sitting in 

the Borough of Manhattan of the City of New York (such Courts, together, "New York Courts"). 

Consistent with the preceding sentence, the Clearing House and each FCM/BD Clearing Member hereby:

(a) submits to the exclusive jurisdiction of the New York Courts solely in respect of allegations or 

claims relating to Pledged Collateral Matters; and

(b) agrees that service of process will be validly effected by sending notice in accordance with Rule 

113.

1.8 All allegations or claims other than those over which the New York Courts have exclusive jurisdiction 

pursuant to paragraph 1.7 shall be finally and exclusively determined by way of arbitration pursuant to 

Rule 117. It is expressly recognised that for Disputes between an FCM/BD Clearing Member and the 

Clearing House containing both allegations or claims over which the New York Courts have exclusive 

jurisdiction pursuant to paragraph 1.7 and other allegations or claims, it may be necessary to have both 

New York Court proceedings and arbitral proceedings. The submission of a party to the jurisdiction of 

a New York Court and/or the taking of a step by a party in proceedings before a New York Court, where 

in any such instance the New York Court has exclusive jurisdiction pursuant to paragraph 1.7 does not 

amount to a waiver by that party of its right to commence or participate in arbitral proceedings in 

accordance with Rule 117. The submission of a party to arbitration under Rule 117 or in respect of any 

Dispute does not amount to a waiver by that party of its right to have allegations or claims in relation to 

which the New York Courts have exclusive jurisdiction pursuant to paragraph 1.7 heard in the New York 

Courts.

1.9 Nothing in paragraphs 1.4 to 1.10 precludes the Clearing House from bringing an action to enforce a 

judgment from any New York Court or award of any arbitral tribunal in any court of competent 

jurisdiction.

1.10 EACH CLEARING MEMBER AND THE CLEARING HOUSE HEREBY IRREVOCABLY WAIVES 

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE 

TO A TRIAL BY JURY WITH RESPECT TO ANY DISPUTE ARISING OUT OF, UNDER OR IN 

CONNECTION WITH THESE FINANCE PROCEDURES OR ANY MATTER CONTEMPLATED 

BY THEM. EACH CLEARING MEMBER AND THE CLEARING HOUSE HEREBY:

(a) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PERSON BOUND BY 

THESE RULES HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH 

OTHER PERSON WOULD NOT, IN THE EVENT OF ANY SUCH DISPUTE, SEEK TO 

ENFORCE THE FOREGOING WAIVER; AND

(b) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THESE RULES, 

ALL CONTRACTS AND ALL OTHER TRANSACTIONS CONTEMPLATED BY THESE 

RULES, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS 

AND CERTIFICATIONS IN PARAGRAPHS 1.4 to 1.10.

1.11 The following terms shall have the meaning specified below where they are used in these Procedures:
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(a) “CZK” means the lawful currency from time to time of the Czech Republic;

(b) “DKK” means the lawful currency from time to time of the Kingdom of Denmark;

(c) “HUF” means the lawful currency from time to time of Hungary;

(d) “JPY” means the lawful currency from time to time of Japan;

(e) “NOK” means the lawful currency from time to time of the Kingdom of Norway;

(f) “PLN” means the lawful currency from time to time of the Republic of Poland;

(g) “TRY” means the lawful currency from time to time of the Republic of Turkey; and

(h) “ZAR” means the lawful currency from time to time of the Republic of South Africa.

2. CASH COLLATERAL

2.1 The Clearing House will support transactions and account holdings in six currencies: USD, GBP, EUR, 

CAD, CHF and SEK. Initial Margin, Original Margin and FX Original Margin obligations may be met 

only in USD, GBP and EUR. Other currencies may be used by Clearing Members and Sponsored 

Principals only for the receipt of income on non-cash Permitted Cover with coupons payable in those 

currencies. CAD may also be used for Variation Margin and settlement payments only for Energy 

Contracts which settle in CAD (whether in whole or in part). AUD, CHF, CZK, DKK, HUF, JPY, NOK, 

PLN, SEK TRY and ZAR may also be used for Variation Margin and settlement payments only for 

Financials & Softs Contracts which settle in such currencies (whether in whole or in part).

2.2 The Clearing House supports cross currency collateral, which means that it is not necessary to cover 

Margin requirements in the same currency as the underlying Contract (other than Variation Margin in 

accordance with Rule 502(c)). The relevant exchange rate applied is the rate determined by the daily 

concertation procedure between central banks within and outside the European System of Central Banks 

(currently published by the European Central Bank at 

http://www.ecb.int/stats/exchange/eurofxref/html/index.en.html#latest) on the day or business day prior 

to the date on which the exchange rate is calculated by the Clearing House or, in the event that such rate 

is not available, a reasonable exchange rate determined by the Clearing House at its discretion. The 

Clearing House may impose a “haircut” on any Original Margin provided in a currency other than the 

reference currency to cover fluctuations in exchange rates. Applicable exchange rate haircuts will be 

published from time to time by Circular. Haircuts will be determined as set out in paragraph 13.7 of 

these Finance Procedures.

2.3 Variation Margin, Mark-to-Market Margin and FX Mark-to-Market Margin is transferred to and from 

the Clearing House by way of outright transfer. Accordingly: (i) no Variation Margin, Mark-to-Market 

Margin or FX Mark-to-Market Margin is subject to any Pledged Collateral Addendum or the pledge 

referred to in paragraph 7.2; and (ii) there is excluded from the requirement in Rule 1603(c) for Margin 

to be provided by an FCM/BD Clearing Member in respect of a Customer Account in the form of Pledged 

Collateral, any Variation Margin, Mark-to-Market Margin and FX Mark-to-Market Margin so provided 

to or by the Clearing House by outright transfer of cash.

3. TRIPARTY COLLATERAL

General

3.1 Clearing Members may use Triparty Collateral to cover Original Margin, Initial Margin and FX Original 

Margin requirements for certain Accounts, as specified in Circulars concerning the use of Permitted 

Cover. This facility is available to Clearing Members at the discretion of the Clearing House. The 

facility is available, and this paragraph 3 applies equally, to Sponsored Principals in the same way as it 

applies to Clearing Members, save as expressly set out in paragraph 3.2, subject to Part 19 of the Rules. 
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The Clearing House reserves the right to terminate this arrangement at any time. The service is provided 

in cooperation with the following Triparty Collateral Service Providers: 

Euroclear Bank

Clearstream Banking.

3.2 These Finance Procedures should be read in conjunction with the Terms and Conditions and the 

Operational Procedures of the Triparty Collateral Service Providers. The legal basis underpinning the 

collateral consists of (i) the Collateral Service Agreement (or equivalent document) (CSA) of the Triparty 

Collateral Service Provider; (ii) the Clearing Membership Agreement (CMA, for Clearing Members) or 

Sponsored Principal Clearing Agreement (SPCA, for Sponsored Principals); and (iii) in respect of 

securities collateral which is transferred pursuant to a Pledged Collateral Addendum, such Pledged 

Collateral Addendum. The Collateral Giver (under the CSA) must be the same legal entity as the 

Clearing Member (under the CMA) or, in respect of an Individually Segregated Sponsored Account, the 

Disclosed Principal (under the SPCA). 

3.3 The following definitions apply to these Triparty Collateral Procedures:

(a) The term “Triparty Collateral Service Provider” or “Provider” means the institution offering the 

Triparty Collateral Service.

(b) The term “Triparty Collateral Instruction" or “Instruction” means: (i) the instruction to transfer 

to or withdraw from the Clearing House, sent to the Clearing House by the Clearing Member,

or (ii) the initiation, amendment or closure instructions sent by the Clearing House or the 

Clearing Member to the Triparty Collateral Service Provider. 

(c) The term "Triparty Collateral Transaction" or “Transaction” means the transaction which is 

created after matching and settlement of the instructions from both the Clearing House and the 

Clearing Member at the Triparty Collateral Service Provider. 

(d) The term "Fill” or “Filling” means the transfer of eligible securities and cash from the Clearing 

Member to the Clearing House in accordance with the Triparty Collateral Transaction. 

Collateral Service Agreement

3.4 In order to use Triparty Collateral a CSA must be executed between the Clearing Member, the Clearing 

House and the Provider. This CSA contains terms and conditions, eligible securities and cash (Annex I), 

Eligibility Set profiles (Annex II) and Fee specifications (Annex III). 

3.5 The Clearing House retains the right to add, adjust or remove any currency or any collateral type from 

the relevant list of eligible securities or change other components in the Eligibility Set profile at any time. 

The Clearing House will inform the Clearing Member and provide him with revised documentation as 

appropriate. The Clearing Member will be deemed to accept the revision proposed by the Clearing House 

and must inform the Provider of its acceptance within five business days. Rejection or delay in informing 

the Provider may result in a reduction in collateral value of the Triparty Collateral. 

3.6 A Clearing Member may request an exclusion of asset types from the list of eligible securities and cash. 

Adjustments to other parts of the CSA will not be accepted by the Clearing House. 

Triparty Collateral Service

3.7 The Clearing Member is allowed to transfer to the Clearing House Triparty Collateral in the three 

currencies currently supported by the Clearing House for Original Margin, Initial Margin and FX 

Original Margin (USD, GBP and EUR). 
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3.8 Instructions can be given for same day or for next business day settlement. Same day instructions will 

adjust the relevant collateral value when the Instructions are matched and settled and the Transaction is 

filled. Transfers for next day settlement will receive collateral value in the next overnight clearing 

process of the Clearing House. Withdrawals for next day settlement will have an immediate effect on 

the value of the Clearing Member’s collateral but will actually settle in the market in the next overnight 

settlement process of the Provider. 

3.9 The Clearing House has opened accounts with each Triparty Collateral Service Provider, the account 

numbers of which will be confirmed, from time to time, by the Clearing House along with the details, if 

applicable, of how Clearing Members are able to use a Pledged Collateral Addendum (other than a 

Pledged Collateral Addendum relating to Customer Account Margin of an FCM/BD Clearing Member) 

in connection therewith. 

Instruction

3.10 In order to initiate, amend or close a Transaction the Clearing Member must instruct the Clearing House 

using ECS (as defined in the Delivery Procedures). The mandatory fields to be completed are: 

(a) Asset type

(b) Service provider

(c) Risk profile

(d) Settlement date (instruction date or next business day)

(e) Currency

(f) Amount of adjustment

3.11 Settlement accounts and the risk profile are considered to be static data and are stored in ECS. Clearing 

Members are not required to include this information in the initial instruction, amendment or closure 

towards the Clearing House. The static data is used by the Clearing House to create instructions to the 

Provider. 

3.12 Please note that in ECS the Clearing Member must enter the increase or decrease in value of the 

Transaction. This is in contrast with the Instruction to the Triparty Collateral Service Provider which 

quotes the new Transaction value. 

3.13 In ECS an entry in “add new collateral” will generate an initiation of a Triparty Collateral Transaction, 

an adjustment (“+” or “-“) will create an adjustment to the value of an existing Transaction and a 

reduction to zero will result in a closure. 

Matching or Settlement Instructions

3.14 Matching and settlement can only take place during the normal settlement window of the Provider. 

Unmatched instructions will be cancelled after the last matching possibility on the day on which the 

relevant instructions are issued has elapsed. 

3.15 The Clearing House will provide updated information on the settlement status of Instructions through 

ECS. Clearing Members are responsible for monitoring the status of the Instructions. The status of an 

instruction as matched or not matched is not advised by the Clearing House and the Clearing Member 

must confirm this directly with the relevant Provider. 

3.16 It is the responsibility of the Clearing Member to ensure that instructions from ECS and the matching 

instruction to the Provider match correctly. The Clearing House will not be liable for any losses of 
EUROPE/1011922968.3 7

Clearing Members or third parties caused by non-settlement or a delay in settlement as a result of the 

actions or omissions of a settlement system, Provider or the Clearing Member. 

Cancellation requests and cancellation of pending instructions

3.17 Clearing Members can only cancel an instruction prior to the time that the Clearing House sends the 

instruction to the Provider. After the Clearing House has sent the Instruction, the Clearing House will

assume that the Instruction has been completed. 

3.18 All unmatched Instructions are automatically cancelled at the end of each day in ECS. If the Instruction 

is unmatched and cancelled but the Clearing Member still wishes to initiate, amend or close the 

Transaction then the Clearing Member has to re-instruct the following business day. 

Settlement deadlines

3.19 Deadlines will be set out and updated in the Clearing House’s Circulars.

3.20 Based on the market deadlines, the Clearing House has set the following deadlines for Triparty Collateral 

Instructions:

SAME DAY settlement 15.00 pm (UK TIME)

NEXT DAY settlement 16.00 pm (UK TIME)

3.21 Any instruction after this time will not be accepted by ECS. Instruction prior to the deadline will be 

released to the Provider and have the possibility to match and settle until the end of the Provider’s 

business day.

Holidays affecting settlement systems

3.22 On bank holidays and other days on which payments are required to be made in another currency pursuant 

to paragraph 6.1(h)(viii), it will or may not be possible to create Instructions. These dates will be advised 

by Circular from the Clearing House. On these days, Clearing Members will need to use alternative 

settlement systems and/or types of collateral to cover relevant Margin requirements. 

Collateral transfers (transaction filling)

3.23 It is the Clearing Member’s responsibility to make sufficient cash or securities available to transfer to the 

account of the Clearing House up to the value of the Transaction. The Clearing House will have the right 

to raise an additional margin requirement when insufficient cash or securities are transferred to the 

Clearing House to Fill in accordance with the Transaction.

3.24 An intra-day requirement will be raised for the value of the uncovered part of the Transaction. After the 

deadline has passed the Clearing House will calculate and raise the intra-day requirement using the 

information provided by the Triparty Collateral Service Provider. 

Deadline Triparty Collateral 9.00 am (UK TIME).

3.25 The additional requirement will not be released before the next end-of-day clearing process.

3.26 Cash might be used as collateral for the Triparty Collateral during the day. Cash remaining in a 

Transaction overnight on the account of the Clearing House will not be treated as cash collateral upon 

completion of the relevant transfer to the Clearing House and no interest return will be paid. 

Collateral value of Triparty Collateral
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3.27 The Clearing House is allowed to adjust the collateral value of the Triparty Collateral Transaction by 

applying a haircut to the Triparty Collateral. Notification in advance by the Clearing House will not be 

provided. 

Termination of the Collateral Service Agreement

3.28 The Clearing House reserves the right to terminate a Collateral Service Agreement at any time at its own 

discretion. Pending Triparty Collateral Transactions must be replaced by alternative permitted cover 

before the Transactions are closed. 

Corporate actions

3.29 Transfer of cash (including the cash proceeds of any securities) into the Clearing House accounts may 

only be executed through a transfer of title pursuant to the Clearing Membership Agreement. Transfer 

of securities into the Clearing House accounts may be executed either (i) through a transfer of title 

pursuant to the Clearing Membership Agreement or (ii) through delivery of possession pursuant to a 

Pledged Collateral Addendum. The Clearing House will become beneficial owner of all proceeds 

resulting from any holdings of securities. All proceeds from Triparty Collateral, less any deduction or 

withholding for or on account of tax required by Applicable Law, will be passed on to the member by 

the Triparty Collateral Service Provider in satisfaction of the Clearing House's obligations in respect of 

such proceeds under clause 4.4 of the Clearing Membership Agreement. The Clearing House, as 

collateral taker, provides access to information on income payments, redemptions or corporate events in 

relation to collateral securities provided to the collateral taker. 

3.30 The Clearing House will be the beneficial owner of all securities title to which is transferred to the 

Clearing House and the withholding of tax is based on the tax status of the Clearing House. We strongly 

recommend that the Clearing Member should withdraw or exclude the collateral which is subject to the 

corporate action as the Clearing House is not liable for any deviations in taxation and does not assist in 

the reclaiming of tax. 

Default

3.31 The Clearing House will inform the Triparty Collateral Service Provider of an event of default of the 

Clearing Member according to the terms and regulations of the CSA. The Clearing House Rules 

regarding the liquidation of the collateral can be found in the Clearing Member Agreement. 

3.32 At the request of an F&O Clearing Member, the Clearing House may, in its sole discretion, agree to enter 

into a collateral purchase agreement with a third party collateral purchaser and such F&O Clearing 

Member (and in the case of an Individually Segregated Margin-flow Co-mingled Account, the relevant 

Customer), under which the Clearing House will agree to offer for sale to the third party collateral 

purchaser Triparty Collateral transferred to the Clearing House by such F&O Clearing Member for a 

Proprietary Account or Individually Segregated Margin-flow Co-mingled Account in respect of F&O 

Contracts, in the event of the F&O Clearing Member being declared a Defaulter under the Rules. Any 

proceeds of such sale will be included in the relevant net sum pursuant to Rules 905(b)(vii) and 906(a). 

The Clearing House shall have no obligation to enter into any such agreement, and the identity of any 

such third party collateral purchaser (and, in the case of an Individually Segregated Margin-flow Comingled Account, the relevant Customer) must be approved by the Clearing House pursuant to criteria 

established by the Clearing House. Any such collateral purchase agreement must be in the form approved 

by the Clearing House for such purposes from time to time.

4. ASSURED PAYMENT SYSTEM: ACCOUNTS

4.1 Each Clearing Member must as a minimum maintain the following accounts at one or more Approved 

Financial Institutions:
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(a) up to six Nominated Proprietary Bank Accounts (also known as 'house' accounts) linked to each

Proprietary Account, denominated in up to one each of USD, GBP, EUR, CAD, CHF and SEK 

as follows, subject to paragraph 4.2:

(i) all Clearing Members must have an account, denominated in USD;

(ii) all CDS Clearing Members must have an account denominated in EUR;

(iii) all F&O Clearing Members and FX Clearing Members must additionally have at least 

one further account denominated in either GBP or EUR;

(iv) a Clearing Member which has an Open Contract Position in a contract for which EUR, 

GBP, USD or CAD is the settlement currency must have an account denominated in 

such currency;

(v) a Clearing Member that transfers non-cash Permitted Cover to the Clearing House 

which pays a coupon, interest or redemptions must have an account in the currency of 

such coupon, interest or redemption; and.

(vi) an F&O Clearing Member that is a Financials & Softs Clearing Member and is party 

to Financials & Softs Contracts which settle in AUD, CAD, CHF, CZK, DKK, HUF, 

JPY, NOK, PLN, SEK, TRY or ZAR must have an account in each such currency.

(b) for an F&O Clearing Member that is a Non-FCM/BD Clearing Member, additional Nominated 

Customer Bank Accounts (also known as ‘client' accounts), one for each currency used by it for 

each of its different Customer Accounts (other than Margin-flow Co-mingled Accounts, in 

respect of which a single Nominated Customer Bank Account shall be used), the relevant 

currencies being USD, GBP, EUR, AUD, CAD, CHF, SEK, CZK, DKK, HUF, JPY, NOK, 

PLN, SEK, TRY and ZAR, based on the same principles as set out in 4.1(a)(i) to (vii);

(c) for an F&O Clearing Member that is an FCM/BD Clearing Member and which has one or more 

Customer Accounts, additional Nominated Customer Bank Accounts (also known as 'client' 

accounts), one for each currency for each of its Non-DCM/Swap Customer Accounts, Swap 

Customer Accounts, DCM Customer Accounts and General Customer Accounts, the relevant 

currencies being USD, GBP, EUR, AUD, CAD, CHF, SEK, CZK, DKK, HUF, JPY, NOK, 

PLN, SEK, TRY and ZAR, based on the same principles as set out in 4.1(a)(i) to (v) for each 

such Customer Account;

(d) for F&O Clearing Members, a Guaranty Fund account denominated in USD (which may be the 

same account as a USD Nominated Proprietary Bank Account or a USD guaranty fund account 

for CDS);

(e) for CDS Clearing Members, a Guaranty Fund account, denominated in EUR for CDS (which 

may be the same account as a EUR Nominated Proprietary Bank Account);

(f) if a CDS Clearing Member is approved to become party to Sovereign Contracts, an additional 

Guaranty Fund account denominated in USD (which may be the same account as a USD 

Nominated Proprietary Bank Account or the USD Guaranty Fund account for F&O Guaranty 

Fund Contributions or FX Guaranty Fund Contributions); and

(g) for FX Clearing Members, a Guaranty Fund account, denominated in USD (which may be the 

same account as a USD Nominated Proprietary Bank Account or the USD Guaranty Fund 

account for CDS Guaranty Fund Contributions or FX Guaranty Fund Contributions);

(h) if a Non-FCM/BD Clearing Member is a Sponsor in respect of an Individually Segregated 

Sponsored Account and is appointed by the Sponsored Principal and agrees to operate 
EUROPE/1011922968.3 10

Nominated Bank Accounts for the Individually Segregated Sponsored Account, such further 

accounts as would be required of each such Sponsored Principal pursuant to paragraph 4.4.

4.2 If a Clearing Member is more than one of: (i) an F&O Clearing Member; or (ii) a CDS Clearing Member, 

that Clearing Member is treated for the purposes of the Clearing House's banking systems as if it were 

two Clearing Members. Such a Clearing Member may specify the same Nominated Bank Accounts for 

a particular Nominated Bank Account for both CDS and F&O or may use different Nominated Bank 

Accounts for the different product classes. Accordingly, it may have up to twelve Nominated Proprietary 

Bank Accounts, one for each currency for each of CDS and F&O. Where a Clearing Member requests 

more than one Proprietary Account or more than one Customer Account of the same Customer Account 

Category (other than Individually Segregated Sponsored Accounts, Margin-flow Co-mingled Accounts 

or by using "F" for an additional omnibus Customer Account), the Clearing Member will be set up on 

the Clearing House's systems as if it were two Clearing Members and each account of the same Customer 

Account Category will use the same account code but with a different Clearing Member mnemonic. Any 

such additional Customer Account may be dedicated for purposes of indirect clearing of positions 

relating to the indirect clients of a Customer of the Clearing Member.

4.3 Nominated Proprietary Bank Accounts, Nominated Customer Bank Accounts and Guaranty Fund 

accounts must be accounts at Approved Financial Institutions but need not all be at the same Approved 

Financial Institution.

4.4 Each Sponsored Principal must as a minimum maintain (or procure that its Sponsor, if it is a NonFCM/BD Clearing Member maintains) the following accounts at one or more Approved Financial 

Institutions:

(a) up to six Nominated Bank Accounts linked to the Individually Segregated Sponsored Account, 

denominated in up to one each of USD, GBP, EUR, CAD, CHF and SEK as follows, subject to 

paragraph 4.2:

(i) all Sponsored Principals must have an account denominated in USD;

(ii) all Sponsored Principals that clear CDS must have an account denominated in EUR;

(iii) all Sponsored Principals that clear F&O or FX must additionally have at least one 

further account denominated in either GBP or EUR;

(iv) all Sponsored Principals that have an Open Contract Position in a contract for which 

EUR, GBP, USD or CAD is the settlement currency must have an account 

denominated in such currency;

(v) a Sponsored Principal which transfers non-cash Permitted Cover to the Clearing House 

which pays a coupon, interest or redemptions in USD, EUR, GBP, CAD, CHF or SEK 

must have an account in that currency; and.

(vi) a Sponsored Principal that clears Financials & Softs Contracts which settle in AUD, 

CAD, CHF, CZK, DKK, HUF, JPY, NOK, PLN, SEK, TRY or ZAR must have an 

account in each such currency.

4.5 ECS will be used for payments. Successful applicants for membership or Sponsored Principal status will 

be issued with log-ins and given training in the use of ECS. ECS will be used by Clearing Members and 

Sponsored Principals to give instructions in respect of certain transactions relating to the transfer of cash 

and securities to the Clearing House and when there is excess Permitted Cover in place that the Clearing 

Member or Sponsored Principal requests be returned. The Clearing House will be entitled to act upon 

instructions made through ECS by the Clearing Member or any of its Representatives. In respect of an 

Individually Segregated Sponsored Account, the Clearing House will be entitled to act upon instructions 

made through ECS by either the Sponsor or the Sponsored Principal or any of their Representatives. The 
EUROPE/1011922968.3 11

accounts described in paragraph 4.1 are the only accounts that may be used for day-to-day transfers to 

and from the Clearing House through ECS. 

4.6 The Clearing House operates Clearing House Accounts in each of the currencies at each Approved 

Financial Institution and separately for each different Customer Account and Proprietary Account 

business of Clearing Members and separately for F&O, CDS and FX, as mentioned in paragraph 4.2. 

Such separation by the Clearing House is undertaken to comply with Applicable Laws and provide 

administrative benefits to Clearing Members. Upon an Event of Default being declared, amounts in all 

Proprietary Accounts of a Clearing Member may be combined and set off (subject to and in accordance 

with the Rules and paragraph 4.2), and amounts relevant to a single separate Customer Account may be 

combined and set off with one another but not with any other Account, as set out in the Rules.

4.7 Additionally, the Clearing House will hold Clearing House Accounts at Concentration Banks in order to 

facilitate transfers between accounts at Approved Financial Institutions.

5. ASSURED PAYMENT SYSTEM: PROCEDURES

5.1 Each Clearing Member and Sponsored Principal (or, if a Sponsor operates a Nominated Bank Account 

for the Sponsored Principal, the Sponsor) will be required to have in place at all times a standard debit 

mandate, allowing the Clearing House to call funds from its Nominated Bank Accounts, established in 

the relevant Approved Financial Institution’s standard form (“Third Party Authority Form”). Pursuant 

to the Clearing Membership Agreement, each Clearing Member must at all times have in place a duly 

executed Third Party Authority Form in favour of each Approved Financial Institution used by it and in 

respect of each of its Nominated Bank Accounts. Pursuant to the Sponsored Principal Clearing 

Agreement and Sponsor Agreement, each Sponsored Principal must at all times have in place a duly 

executed Third Party Authority Form executed by the Sponsored Principal or Sponsor in favour of each 

Approved Financial Institution used by it and in respect of each of its Nominated Bank Accounts. 

Pursuant to Clearing Membership Agreements (and, where applicable, Sponsored Principal Clearing 

Agreements and Sponsor Agreements) and arrangements between the Clearing House and Approved 

Financial Institutions, the Clearing House is given various powers, including to take any action as it in 

its discretion determines in the Clearing Member’s (or, where applicable Sponsor's and Sponsored 

Principal's) or the Clearing House’s name in connection with a Clearing Member’s (or, where applicable 

Sponsor's and Sponsored Principal's) Nominated Bank Accounts. Approved Financial Institutions will 

act upon any instructions received from the Clearing House in relation to the Nominated Bank Accounts 

without any further reference to, or authority from, a Clearing Member.

5.2 Changes in APS account details must be notified at least five Business Days in advance.

5.3 It is the responsibility of each Clearing Member and Sponsored Principal to have sufficient funds in its 

Nominated Bank Accounts to enable all cash transfers required under the Rules to be settled. Approved 

Financial Institutions will not be able to reverse any payment from or to a Clearing House Account 

without receipt of authorisation from the Clearing House evidenced in writing.

5.4 Clearing Members and Sponsored Principals (or their Sponsors) will be advised of debits from or credits 

to their physical accounts by the standard SWIFT advices of debit and credit (MT900 and MT910 

respectively) or otherwise in accordance with arrangement established with Approved Financial 

Institutions.

5.5 Clearing Members and Sponsored Principals must ensure that Approved Financial Institutions make 

payment to the Clearing House Account at the same Approved Financial Institution within the time 

periods specified in Table 1. The Clearing House will notify all affected Approved Financial Institutions 

if a contingency method is to be invoked, which will occur if an Approved Financial Institution or the 

Clearing House experiences a technology failure that affects either of their ability to send or receive 

SWIFT messages. In the event that no payment notification is received from an Approved Financial 

Institution by the time specified in Table 1, the Clearing House will be permitted to act as if the funds 

have not and will not be received, which includes the declaration of an Event of Default in respect of any 
EUROPE/1011922968.3 12

affected Clearing Member or Sponsored Principal. In such circumstances, the Clearing House will use 

its reasonable endeavours to determine the cause of the late notification with the relevant Approved 

Financial Institutions. The remittance of funds remains at all times the responsibility of Clearing 

Members. The Clearing House may otherwise treat funds as not having been received and take similar 

actions as a result of Rule 301(f). In the case of the failure or Insolvency of an Approved Financial 

Institution used by a Clearing Member or Sponsored Principal in circumstances in which an amount is 

not treated as having been paid as a result of Rule 301(f), the amount must still be paid (through a further 

payment, if necessary) by a Clearing Member or Sponsored Principal using alternative methods or a 

different Approved Financial Institution, in order to discharge the Clearing Member's or Sponsored 

Principal's liabilities.

5.6 If the Clearing House has been transferred excess cash (beyond applicable Margin requirements) by any 

Clearing Member or Sponsored Principal, the Clearing Member or Sponsored Principal in question is 

entitled to request repayment through ECS, either on an ad hoc basis or automatically on a daily or other 

regular basis. Such repayments will take place through the same systems and accounts as for payments 

to the Clearing House.

TABLE 1: TIME PERIODS FOR DELIVERY OF FUNDS AND SWIFT MT900/MT910
EUROPE/1011922968.3 13

Type of Instruction Time for Receipt of Instruction Latest time for APS Bank to make payment of 

amount specified in Instruction and send 

SWIFT MT900/MT910

Routine End-of-day 

Instruction

For Contracts other than F&O 

Contracts: On or after 00:00:00 

London Time on Business Day 

X+1 but on or before 07:59:59 on 

Business Day X+1

For F&O Contracts: On or after 

00:00:00 London Time on Business 

Day X+1 but on or before 07:29:59 

on Business Day X+1

Before 09:00:00 London time on Business 

Day X+1

Routine End-of-day 

Instruction for Financials 

& Softs Contracts that 

settle in currencies other 

than EUR, USD or GBP

On or after 00:00:00 London Time 

on Business Day X+1 but on or 

before 07:29:59 on Business Day 

X+1

Before 09:00:00 London time on Business 

Day X+2

Intra-day Instruction For Contracts other than F&O 

Contracts: between 09:00:00 and 

19:00:00 London time on Business 

Day X

For F&O Contracts: between 

07:30:00 and 20:00:00 London 

time on Business Day X

Within one hour of instruction on Business 

Day X

Intra-day Instruction 

(contingency)

For Contracts other than F&O 

Contracts: On or after 08:00:00 on 

Business Day X but on or before 

21:00:00 on Business Day X

For F&O Contracts: On or after 

07:30:00 on Business Day X but on 

or before 21:00:00 on Business Day 

X

Within one hour of instruction on Business 

Day X

6. PAYMENTS TO AND FROM THE CLEARING HOUSE

6.1 General

(a) This paragraph 6 applies to each Sponsored Principal (or, to the extent that a Sponsor operates 

Nominated Bank Accounts in respect of an Individually Segregated Sponsored Account, each 

such Sponsor) in the same way as it applies to a Clearing Member, subject to Part 19 of the 

Rules.

(b) Adjustments in Margin calls resulting from price changes in underlying open Contracts and 

other amounts due between the Clearing House and the Clearing Member will result in either a 

payment from the Clearing Member’s relevant Nominated Bank Account by direct debit or a 

payment from a Clearing House Account to a Clearing Member’s Nominated Bank Account 

(subject to Part 3 of the Rules). Pursuant to Part 3 of the Rules, payments between the Clearing 
EUROPE/1011922968.3 14

House and a Clearing Member may be set off and consolidated into end-of-day or ad hoc

payments in respect of each Account (other than Margin-flow Co-mingled Accounts, in respect 

of which single combined payments may be used) pursuant to the Standard Payments 

Mechanism. Under the Standard Payments Mechanism, Margin payments are combined with 

all other amounts due and payable pursuant to the Rules and discussed further in this paragraph. 

As an alternative to the Standard Payments Mechanism, Clearing Members will be able to elect 

for upfront fees, Mark-to-Market Margin, FX Mark-to-Market Margin, Variation Margin or 

other payments to be excluded from the Standard Payments Mechanism by selecting the 

Externalised Payments Mechanism for any such classes of payments in respect of a particular 

Account, subject to the written consent of the Clearing House. Details of the payments to 

Clearing Members which can be included under the Externalised Payments Mechanism are set 

forth in Rule 302 and paragraph 6.1(i).

(c) Payments will be executed as an intra-APS-bank, between accounts, book transfer from the 

relevant Nominated Bank Account to a Clearing House Account at the same Approved Financial 

Institution. Payment into Clearing Members’ Nominated Bank Accounts will generally take 

place through a similar book transfer. However, if insufficient funds are available within the 

relevant Clearing House Account at that Approved Financial Institution, the remaining balance 

may be transferred from a Clearing House Account at another Approved Financial Institution 

or Institutions.

(d) In ECS, Clearing Members have the ability to set standing instructions to return all funds above 

applicable Margin requirements or above a threshold (if higher). Such standing instructions can 

only be set for cash collateral. For currencies which can be used only for Variation Margin and 

settlement payments, credits are automatically returned to the Clearing Member's account 

regardless of any standing instructions to the contrary.

(e) If a Clearing Member has not established standing instructions in ECS, it may manage its cash 

accounts by giving manual instructions. An increase in cash positions through ECS will result 

in a direct debit from the relevant Nominated Bank Account of the Clearing Member. A 

reduction in cash positions will result in a payment from a Clearing House Account to one of 

the Clearing Member’s Nominated Bank Accounts. ECS does not permit requested reductions 

or standing instructions to result in a Clearing Member holding any positions below applicable 

Margin and Guaranty Fund Contribution requirements.

All instructions for ad hoc withdrawals of cash must be received by:

Currency Instruction deadline

GBP Same day 10.00 a.m.

EUR Same day 10.00 a.m.

USD Same day 11:45 a.m. (Eastern time)

No ad hoc withdrawals of cash will be possible on the same day if instructions are received

after these deadlines. The Clearing House may require any Clearing Member to reduce excess

cash on account with the Clearing House or may specify that excess cash on account above a

certain threshold does not receive interest.

(f) Clearing Members are able to enter cash transfers for value next day. These requests need to 

be entered and approved by Clearing Members prior to end of day, but the Clearing House will 

only be obliged to accept such transfers on the following morning after receipt. Following 

receipt and acceptance by the Clearing House in ECS, the changes resulting from ad hoc cash 

credits will take effect immediately notwithstanding the previous sentence. This paragraph 

6.1(f) is subject at all times to Rule 301(f).
EUROPE/1011922968.3 15

(g) Overnight payments must be made to the Clearing House at or before 09:00 on the morning 

following a call. Ad hoc payments must be made within one hour of an instruction being issued 

by the Clearing House through ECS. In relation to overnight pending transactions, any 

withdrawals or transfers instructed after the relevant deadline will be rejected by ECS. For risk 

management reasons, the Clearing House will be entitled to delay any payments that are due to 

be paid to the Clearing Member pursuant to this paragraph 6.1 in any currency in respect of an 

Account, if the Clearing Member (or any Affiliate of the Clearing Member) has failed to pay to 

the Clearing House any overnight payment in any currency due following a call issued to the 

Clearing Member (or any Affiliate of a Clearing Member) for payment by 09:00 on the morning 

following the relevant call. For such purposes, the relevant Clearing Member will be deemed to 

be subject to an equivalent additional Margin requirement pursuant to Rule 502(g) until such 

time as the other payment is made or the Clearing House notifies it that the additional Margin 

requirement has been released.

(h) The Clearing House will not provide Clearing Members with any specific notifications or 

confirmations after the execution of a cash movement. Clearing Members may instead find 

details of all instructions in daily and other reports available through the ECS graphical user 

interface (“GUI”). After execution, the status of an instruction within ECS will change from 

‘pending’ to ‘processed’.

(i) The following sub-paragraphs describe the various payments that may be included in any cash 

transfer:

(i) Variation Margin (for F&O Contracts), Mark-to-Market Margin (for CDS Contracts) 

and FX Mark-to-Market Margin (for FX Contracts)

Daily Calls: Pursuant to Rule 503, all Contracts will be revalued and subject to 

Variation Margin, Mark-to-Market Margin or FX Mark-to-Market Margin calls and 

resulting settlement payments on a daily basis for settlement next day for payments in 

currencies other than EUR, USD and GBP or same day for payments in other 

currencies in accordance with Table 1. Variation Margin, Mark-to-Market Margin and 

FX Mark-to-Market Margin requirements are calculated and settled only in cash. The 

standard process will be for adjustments to be calculated and payments ordinarily to 

be executed in the currency of the relevant Contracts (or underlying Contracts). Once 

the resulting settlement payments of Variation Margin, Mark-to-Market Margin or FX 

Mark-to-Market Margin in respect of the relevant daily call have been paid in cleared 

funds, the value of the Contracts will be reset to zero. Under the Standard Payments 

Mechanism, liabilities resulting from Variation Margin, Mark-to-Market Margin and 

FX Mark-to-Market Margin requirements will be included in the overnight call or 

return. Where the Externalised Payments Mechanism applies in respect of Variation 

Margin, Mark-to-Market Margin or FX Mark-to-Market Margin for a particular 

Account, such cash payments will be settled through a separate cash flow and not 

included in a combined overnight call or return as would apply under the Standard 

Payments Mechanism. The specific timings, payments and Accounts that are subject 

to the Externalised Payments Mechanism will be confirmed to the relevant Clearing 

Member by the Clearing House.

Intra-day Calls: Contracts may also be marked to market and subject to an additional 

Initial Margin, Original Margin or FX Original Margin call (the proceeds of which 

may be applied against future Variation Margin, Mark-to-Market Margin or FX Markto-Market Margin calls) on an ad hoc intra-day basis. Affected Clearing Members will 

be informed (not in writing) by the Clearing House in the event of an intra-day call 

being applicable. If the call affects a significant number of Clearing Members, the 

Clearing House may issue a Circular. Intra-day calls will be executed via a direct debit 

from the Clearing Member’s Nominated Bank Account at an Approved Financial 
EUROPE/1011922968.3 16

Institution. Payment must be made within one hour. Intra-day calls will only be in 

USD, GBP or EUR.

Non EUR, USD or GBP payments: Any obligation to pay Variation Margin or 

settlement amounts on Financials & Softs Contracts in JPY must be covered with cash 

or non cash Original Margin in a different currency between the time of instruction and 

settlement.

(ii) Original Margin (for F&O Contracts), Initial Margin (for CDS Contracts) and FX 

Original Margin (for FX Contracts)

Daily Calls: Pursuant to Part 5 of the Rules, Original Margin, Initial Margin and FX 

Original Margin requirements will be recalculated on a daily basis. Requirements will 

be calculated and payments will ordinarily be executed in the currency of the relevant 

Contracts (or underlying Contracts). Under the Standard Payments Mechanism, 

liabilities resulting from Original Margin, Initial Margin and FX Original Margin 

requirements will be included in the overnight call or return. When the Externalised 

Payments Mechanism applies in respect of Variation Margin, Mark-to-Market Margin 

or FX Mark-to-Market Margin for a particular Account, cash payments will be settled 

through a separate cash flow and not included in a combined overnight call or return. 

The specific timings, payments and Accounts that are subject to the Externalised 

Payments Mechanism will be confirmed to the relevant Clearing Member by the 

Clearing House

Intra-day Calls: Original Margin, Initial Margin and FX Original Margin may also be 

subject to ad hoc intra-day recalculations and calls. Affected Clearing Members will 

be informed (not in writing) by the Clearing House in the event of an intra-day call 

being applicable. If the call affects a significant number of Clearing Members, the 

Clearing House may issue a Circular. Intra-day Original Margin, Initial Margin and 

FX Original Margin calls will be executed via a direct debit from the Clearing 

Member’s Nominated Bank Account at an Approved Financial Institution. Payment 

must be made within one hour. Intra-day calls will only be in USD, GBP or EUR.

Clearing Members can specify the currency in which Original Margin, Initial Margin 

and FX Original Margin deficits are called. In order to enable this facility Clearing 

Members will have to complete and return the ICE Clear Europe Margin Deficit 

Currency Form. 

As explained in the Clearing Procedures, in the event that an intra-day Margin call is anticipated, 

the Clearing House will contact the Clearing Member by phone to notify them of the 

requirement. This will be followed by written notification distributed by email. Intra-day 

Margin calls for Contracts other than F&O Contracts can be made between 09:00 and 19:00 

London time. Intra-day Margin calls for F&O Contracts can be made between 07:30 and 20:00 

London time. Where a contingency method applies (see paragraph 5.5), intra-day calls in 

respect of any Contracts may be made up to 21:00 London time. All intra-day Margin calls 

must be met within 60 minutes of notification by the Clearing House. Any Margin calls made 

outside of these hours for a particular product must be met by the later of: (x) 60 minutes after 

notification by the Clearing House, provided that any settlement system used by the Clearing 

House for the relevant currency remains open for business at that time; or (y) 60 minutes after 

the time at which any settlement system used by the Clearing House for the relevant currency 

becomes open for business following the time of the notification by the Clearing House. 

Clearing Members will be able to answer the call by reducing positions (e.g. reallocation of 

trades/clearing give-ups), or submitting new cash and/or collateral. Margin calls are rounded to 

the smallest major currency unit (e.g. US dollar cents).

(iii) Guaranty Fund adjustments
EUROPE/1011922968.3 17

Each relevant Guaranty Fund Period, the total value of the Guaranty Funds and 

required Guaranty Fund Contributions of Clearing Members are reviewed and may be 

amended. Each Clearing Member will be notified of its total Guaranty Fund 

Contribution requirements at each Guaranty Fund Period end. The Clearing House 

Contributions will also be notified to Clearing Members by Circular. Adjustments to 

Guaranty Fund Contributions will be notified to individual Clearing Members by 

e-mail to a nominated e-mail account of each Clearing Member prior to the end of the 

relevant Guaranty Fund Period. Adjustments to Guaranty Fund Contributions will be 

made five Business Days after the date of notification unless the relevant Circular 

specifies otherwise. Other than in exceptional circumstances, any additional required 

Guaranty Fund Contribution payments will be included together with overnight calls 

and details will be included in daily reports provided to Clearing Members through 

ECS.

(iv) Interest and price alignment amounts

The Clearing House will notify Clearing Members of its interest rate in each currency 

on the Business Day following the day to which the rate applies. The Clearing House 

rates payable (or deductible in the case of negative rates) on Original Margin, Initial 

Margin and FX Original Margin are referred to as the ICE Deposit Rate (IDR). 

Payments or deductions on accounts in respect of interest will be made to or from 

Clearing Members in respect of cash, assets and securities held by the Clearing House 

as Margin, Guaranty Fund Contributions or Permitted Cover. The rate of return or loss 

(in the case of negative rates) may vary for different cash and asset classes and between 

types of cover. The IDR and accumulated interest over each month will be available to 

Clearing Members through the ECS-GUI.

Interest will be calculated on a simple daily basis and will become available for 

payment to or liable for deduction from Clearing Members, subject to any required 

deduction or withholding tax, monthly, by the fourth fifth Business Day after the end 

of each month. Once credited, any positive interest is available to meet Margin 

payments or may be withdrawn by Clearing Members. If used to meet Margin 

payments, such positive interest then itself becomes eligible to accrue positive or 

negative interest.

Any deductions on account of interest may result in calls for Margin in respect of

requirements under the Rules which are no longer being satisfied as a result of such 

deduction.

Price alignment amounts are payable in respect of CDS Contracts by Clearing

Members and the Clearing House as set out in the CDS Procedures. FX Price

Alignment Amounts are payable in respect of FX Contracts by Clearing Members and 

the Clearing House as set out in the FX Procedures.

(v) Income (interest and collateral) and redemption

The Clearing House will make payment to Clearing Members in respect of income and 

redemptions on non-cash assets transferred to the Clearing House as Margin, Guaranty 

Fund Contributions or Permitted Cover. Distributions will be executed direct to the 

Clearing Member by the relevant custodian pursuant to a standing instruction made by 

the Clearing House based on account information provided by the Clearing Member. 

Clearing Members are required to provide account details in relation to accounts in all 

applicable currencies to the Clearing House. Changes in account details must be 

notified at least five Business Days in advance.
EUROPE/1011922968.3 18

Payments in respect of income on non-cash assets will be paid to Clearing Members 

in the same currency as the income is distributed by the relevant issuer or payment 

agent to the Clearing House or the relevant Custodian. Any required foreign exchange 

transaction following payment must be arranged by the Clearing Member and the costs 

of the same must be met by the Clearing Member. No currency exchange will be 

arranged by the Clearing House or its custodian.

If there is a failed payment in respect of income or redemption (e.g. as a result of 

account details being unavailable or incorrect), income may be retained by the Clearing 

House or custodian but will not be treated by the Clearing House as Permitted Cover. 

The Clearing House makes no representation or warranty to Clearing Members in 

respect of the promptness of payment by any issuer or payment agent, the custodian or 

any of its sub-custodians or agents (save for any liability which by Applicable Law

may not be excluded).

(vi) Fees and rebates

All Market fees, Clearing House fees, delivery fees and other fees payable to the 

Clearing House or a Market will be calculated and charged to each Clearing Member 

as such fees accrue (typically on a monthly basis). 

Rebates, fee discounts and incentive programme payments which have been directed 

by the payee or beneficiary to be paid to the account of a Clearing Member will be 

calculated and credited to the relevant account of the Clearing Member as such rebates, 

fee discounts and incentive programme payments accrue (typically on a monthly basis) 

and may include payments for which the payer is a Market, payments for which the 

payer is the Clearing House or both. 

The following additional provisions apply in respect of rebate, fee discount or incentive 

programme payments except to the extent agreed or notified otherwise by the Clearing 

House from time to time. Terms, conditions and amounts of rebate, fee discount or 

incentive programmes may be periodically modified by the Clearing House at its sole 

discretion. In certain circumstances, the Clearing House may make the availability of 

a rebate, fee discount or incentive programme contingent on certain cleared volume 

levels. Rebate, fee discount and incentive programmes may be withdrawn by the 

Clearing House or any relevant Market at any time. Persons may be required to meet 

participation criteria, conditions and obligations applicable to participants in this 

scheme as the same may be amended or added to from time to time, in order to be able 

to continue to participate in any such programme. Where a rebate, fee discount or 

incentive programme relates to a service for which both Market trading, clearing or 

other fees or Clearing House clearing fees are applicable, the payer of the rebate, fee 

discount or incentive programme payment is the Clearing House as to the total amount 

of the Market and Clearing House rebate, fee discount or incentive programme

payments multiplied by the percentage that Clearing House fees represent of the sum 

of Clearing House and Market fees. The legal entity operating the relevant Market will 

be the payer of the remainder of the rebate, fee discount or incentive programme

payment. Where only Clearing House fees are charged or a rebate, fee discount, or 

incentive programme payment the payer of the entire rebate, fee discount or incentive 

programme payment is the Clearing House. The Clearing House or the operator of the 

relevant Market may arrange for one of its Affiliates or the Clearing House to make 

any payment in respect of rebates, fee discounts or incentive programmes on the 

payer's behalf. The payee in respect of a rebate, fee discount or incentive programme

is the person who participates in the programme, regardless of whether such person is 

or is not a Clearing Member or member or participant of the relevant Market. A 

qualifying participant in a rebate, fee discount or incentive programme may from time 

to time direct that relevant payments be made directly to their account or to the account 
EUROPE/1011922968.3 19

of their Clearing Member, exchange member, execution platform participant or any 

other third party. Any payment in accordance with such instructions shall constitute 

due and final payment by the Clearing House or Market to the account of the rebate, 

fee discount or incentive programme participant. Rebate, fee discount or incentive 

programme participants may direct changes to such payment arrangements from time 

to time by providing notice in writing to the Clearing House or the relevant Market. In 

the absence of any payment instructions, the Clearing House shall be entitled (but shall 

not be required) to make payment in respect of any rebate, fee discount or incentive 

programme payment by crediting amounts to the Proprietary Account or Customer 

Account of the relevant Clearing Member and in doing so shall have made good 

discharge of its obligations and those of any Market in relation to the relevant rebate, 

fee discount or incentive programme payment.

Fee invoices will be made available via ECS by the fourth Business Day of each month. 

Fees and any applicable rebates, incentive payments or discounts will be included in 

the overnight call or return by the fifth Business Day after the end of each month. All 

fees are collected through a Clearing Member’s Nominated Proprietary Bank Account. 

Rebates, incentive payments or discounts may be credited to a Clearing Member's 

Nominated Proprietary Bank Account or Nominated Customer Bank Account, as 

instructed from time to time by the payee.

Clearing Members that wish to query a fee invoice should contact the Clearing House 

Finance department on or before the 10th Business Day of the relevant month. Any 

required amendments will be reflected in the next billing cycle.

(vii) Other amounts

Any amount payable by a Clearing Member to the Clearing House (or vice versa) 

pursuant to the Rules or any Contract may be included within an end-of-day or ad hoc

payment under the Standard Payments Mechanism. This may include premium 

payments (in the case of Options), settlement amounts, Surplus Collateral, 

delivery-related payments (e.g. Buyer’s Security and Seller’s Security), fines, 

damages, amounts payable as a result of arbitration or disciplinary proceedings, 

dividends and coupons and other corporate action payments relating to Investments 

being delivered under Financials & Softs Contracts, amounts resulting from reduced 

gain distributions, product terminations or non-default loss contributions under Part 9 

of the Rules, and other amounts payable under the Rules. 

(viii) Applicability of Externalised Payments Mechanism to Part 9 Rules payments

If the Externalised Payments Mechanism applies to Variation Margin, Mark-toMarket Margin or FX Mark-to-Market Margin for a particular Account, then:

(A) Margin Account Adjustments applied on Loss Distribution Days in 

accordance with Rule 914(e) may be netted and offset or aggregated by the 

Clearing House against any payment from or receivable by the relevant 

Contributor under either the Standard Payments Mechanism or the 

Externalised Payments Mechanism on the relevant Account, including against 

any payment for MTM/VM and, accordingly, payments of Cash Gainer 

Adjustments and Cash Loser Adjustments pursuant to Rule 914(l) may be 

made under the Standard Payments Mechanism or the Externalised Payments 

Mechanism at the election and discretion of the Clearing House.

(B) Product Termination Amounts may be netted and offset or aggregated by the 

Clearing House against any other payment from or receivable by a Clearing 

Member under either the Standard Payments Mechanism or the Externalised 
EUROPE/1011922968.3 20

Payments Mechanism, regardless of whether the Externalised Payments 

Mechanism would apply in respect of any kind of payment on the relevant 

Account by any other provision of these Procedures, at the election and

discretion of the Clearing House.

(C) Payments of Collateral Offset Obligations as referred to in Rule 919(m) 

Assessment Contributions and Guaranty Fund Contribution calls or 

replenishments will be made under the Standard Payments Mechanism unless 

the Clearing House at its discretion directs otherwise.

The specific timings, Part 9 payments and Accounts that are subject to the Externalised 

Payments Mechanism will be confirmed to the relevant Clearing Member by the 

Clearing House at the relevant time.

(ix) Currency Holidays and payments in other currencies

Before the start of each calendar year, the Clearing House will publish a Circular 

setting out details of bank/public holidays relevant to the currencies supported by the 

Clearing House in different jurisdictions (each, a “Currency Holiday”). Transfer of 

funds in a currency will not take place on a Currency Holiday for that currency.

If there is a Currency Holiday, the Clearing House will call and Clearing Members 

shall pay (or receive as applicable) Margin in another currency specified by the 

Clearing House. The sequence of alternative currencies to be used for F&O Contracts 

and FX Contracts in respect of Currency Holidays (in the absence of a Clearing 

Member specifying an alternative sequence for these three currencies in writing to the 

Clearing House) is as follows: USD, GBP and EUR. The sequence of alternative 

currencies to be used for CDS Contracts (in the absence of a Clearing Member 

specifying an alternative sequence for these three currencies in writing to the Clearing 

House) is as follows: EUR, USD and GBP. 

If, due to a Force Majeure Event, Financial Emergency or otherwise, a transfer of funds 

of a currency is not possible or advisable, the Clearing House may call and Clearing 

Members shall pay (or receive as applicable) Margin, Guaranty Fund Contributions, 

fees, fines, interest, incentive payments, fee discount, rebates and all other payments 

(excluding final settlement payments under Contracts) in another currency specified 

by the Clearing House. If payments are to take place in a currency other than the 

contractual currency in circumstances other than a Currency Holiday, the Clearing 

House will issue a Circular or notify affected Clearing Members, specifying the 

currency to be used and the exchange rate to be applied. 

Payments of Margin in a different currency on a Currency Holiday will not be netted 

against obligations in a currency other than that of the underlying Contract, nor paid in 

another currency. For Variation Margin, Mark-to-Market Margin and FX Mark-toMarket Margin, payment in a different currency from the contractual currency due to 

a Currency Holiday will result in a delay of payments to the next day on which payment 

may be made in the contractual currency. Any obligation to pay Variation Margin, 

Mark-to-Market Margin or FX Mark-to-Market Margin in a currency other than the 

contractual currency, including on a Currency Holiday, will result in an additional 

Original Margin, Initial Margin or FX Original Margin requirement, which must be 

covered with cash or non-cash collateral (which may be of, or be denominated in, a 

different currency). Any obligation to pay any other amount in a currency other than 

the contractual currency may result in an additional Original Margin, Initial Margin or 

FX Original Margin requirement, which must be covered with cash or non-cash 

collateral (which may be of, or be denominated in, a different currency) and which will 

be collected via the Standard Payments Mechanism, regardless of whether the 
EUROPE/1011922968.3 21

Externalised Payments Mechanism applies to such Variation Margin, Mark-to-Market 

Margin or FX Mark-to-Market Margin (unless the Clearing House directs otherwise).

In the case of payment in a currency other than the contractual currency being required 

in instances other than a Currency Holiday, the Clearing House will specify in the 

relevant Circular how applicable obligations will be margined or netted.

Transactions in collateral on bank/public holidays in a relevant jurisdiction will not 

necessarily be rejected upon instruction but will be cancelled at the end of day and 

must be re-instructed by Clearing Members on a day which is not a bank/public holiday 

in the relevant jurisdiction.

(j) Clearing Members are required to provide any information to the Clearing House and complete 

any forms provided by the Clearing House as may be required by the Clearing House to comply 

with its obligations relating to FATCA. For the purposes of this Rule, FATCA means:

(a) sections 1471 to 1474 of the US Internal Revenue Code of 1986, as amended, 

and any associated legislation, regulations or guidance, or similar legislation, 

regulations or guidance enacted in any jurisdiction which seeks to implement similar 

tax reporting and/or withholding tax regimes;

(b) any intergovernmental agreement, treaty, regulation, guidance or any other 

agreement between the United Kingdom (or any UK governmental authority) and the 

United States or any other jurisdiction (including any governmental authority in such 

jurisdiction), entered into in order to comply with, facilitate, supplement or implement 

the legislation, regulations or guidance described in paragraph (a) above;

(c) any agreement pursuant to the implementation of any intergovernmental 

agreement, treaty, regulation, guidance or other agreement referred to in paragraphs 

(a) or (b) above with the US Internal Revenue Service, the US government or any 

governmental authority in any other jurisdiction; and

(d) any legislation, regulations or guidance in the United Kingdom that give 

effect to the matters outlined in the preceding paragraphs.

The Clearing House's status under FATCA (and registration for any applicable Global 

Intermediary Identification Number, including on a protective basis) is not intended to have any 

effect on the Clearing House's status for the purposes of any other Applicable Law. The 

Clearing House's registration under FATCA shall not affect any of the rights or obligations of 

the Clearing House or any Clearing Member or Sponsored Principal (including, without 

limitation, relating to transfers of title over collateral, pledged collateral or other property rights) 

provided for under the Rules, Procedures, Clearing Membership Agreements, Sponsor 

Agreements, Sponsored Principal Clearing Agreements, Applicable Laws or otherwise, nor 

does it put the Clearing House on notice of any Encumbrance.

(k) In respect of Contracts that are equity or equity index futures or options products:

(i) No Clearing Member that is treated as a non-U.S. entity for U.S. federal income tax 

purposes shall enter into any Contract in any equity or equity index futures or option

product with the Clearing House unless:

(A) such Clearing Member has entered into a qualified intermediary agreement 

with the U.S. Internal Revenue Service (the “IRS”) to become: (y) with 

respect to any Proprietary Account Contract or any other Contract in respect 

of which such Clearing Member considers that it is acting as principal for 

U.S. tax purposes, a qualified derivatives dealer (“Qualified Derivatives 

Dealer”); and (z) with respect to any Customer Account Contract in respect 
EUROPE/1011922968.3 22

of which such Clearing Member considers that it acts as an intermediary for 

U.S. tax purposes, a qualified intermediary that assumes the primary 

obligation for withholding under Chapters 3 and 4 of subtitle A of the Internal 

Revenue Code of 1986, as amended (the “Code”) and for reporting and 

withholding under Chapter 61 of subtitle F and Section 3406 of the Code 

(“Withholding Qualified Intermediary”), such that the Clearing House may 

make payments of dividend equivalents (as that term is defined in Section 

871(m)(2) of the Code and Treasury Regulations Section 1.871-15(c) or any 

successor thereto (“Dividend Equivalents”)) or deemed payments to such 

Clearing Member free from U.S. withholding taxes imposed pursuant to 

Chapters 3 and 4 of subtitle A, and Chapter 61 of subtitle F and Section 3406, 

of the Code arising from Contracts with the Clearing House that are entered 

into by the Clearing Member; and

(B) such Contract entered into by the Clearing Member is within the scope of the 

exemption from withholding tax for Dividend Equivalents paid to Qualified 

Derivative Dealers or Withholding Qualified Intermediaries pursuant to 

Chapters 3 and 4 of subtitle A, and Chapter 61 of subtitle F and Section 3406, 

of the Code; and

(C) such Clearing Member has qualified under such procedures promulgated by 

the IRS as are in effect from time to time to establish an exemption from 

withholding under FATCA, such that the Clearing House will not be required 

to withhold any amount with respect to any payment made or deemed to be 

made to such Clearing Member under FATCA.

A Clearing Member that enters into any Contract in breach of paragraph 6.1(k)(i)(A)-

(C) must immediately bring itself into compliance or terminate the relevant Contract

(without prejudice to any other rights or remedies of the Clearing House).

(ii) On 1 January of each year, each Clearing Member that is treated as a non-U.S. entity 

for U.S. federal income tax purposes and that enters into any Contract in any equity or 

equity index futures or option product with the Clearing House in accordance with 

paragraph 6.1(k)(i) shall certify to the Clearing House that such Clearing Member 

satisfies the requirements of paragraph 6.1(k)(i) by providing to the Clearing House 

appropriate tax documentation attesting to such Clearing Member’s U.S. federal 

income tax status. Each such Clearing Member is required to promptly update its 

certification to the Clearing House when required by Applicable Law and, if sooner,

whenever the certification is no longer accurate.

(iii) On 1 January of each year, each Clearing Member that is treated as a non-U.S. entity 

for U.S. federal income tax purposes shall provide the Clearing House with 

information relating to Dividend Equivalents the Clearing House pays or is treated as 

paying to such Clearing Member in sufficient detail and in a sufficiently timely manner 

to enable the Clearing House to report on IRS Forms 1042 and 1042-S (or successor 

forms) under Chapters 3 and 4 of subtitle A of the Code the required amounts and other 

information relating to such Dividend Equivalents and transactions giving rise thereto 

between the Clearing House and the Clearing Member.

(iv) Each Clearing Member that is treated as a non-U.S. entity for U.S. federal income tax 

purposes shall promptly notify the Clearing House in writing if it undergoes a change 

in circumstance that would affect its compliance with this paragraph 6.1(k), or 

otherwise knows or has reason to know that it is not, or will not be, in compliance with 

this paragraph 6.1(k), but in each case, such notice must be delivered to the Clearing 

House no later than within two Business Days of the Clearing Member’s knowledge 

thereof.
EUROPE/1011922968.3 23

(v) The representations set forth above or for U.S. tax purposes concerning "principal" or 

"intermediary" status shall not affect the rights, obligations, status, position or capacity 

of any Clearing Member as principal or otherwise under Contracts, in respect of 

Margin or under the Rules or Procedures.

7. CUSTODY ACCOUNTS

7.1 Pursuant to Rule 502, Original Margin, Initial Margin and FX Original Margin requirements are payable 

initially in cash but a Clearing Member may at the discretion of the Clearing House substitute such cash 

Original Margin, Initial Margin or FX Original Margin with other Permitted Cover by delivery of the 

replacement Permitted Cover to the Clearing House. Such transfers must first be notified to the Clearing 

House by the relevant Clearing Member through ECS and will not be effective and may not be made 

until after the Clearing House has approved the proposed transaction in ECS. Guaranty Fund 

Contribution requirements may also be satisfied through non-cash assets to the extent allowed under the 

Rules and these Procedures. This paragraph 7.1 applies to each Sponsored Principal (or, to the extent 

that a Sponsor operates Nominated Bank Accounts in respect of an Individually Segregated Sponsored 

Account, each such Sponsor) in the same way as it applies to a Clearing Member, subject to Part 19 of 

the Rules.

7.2 Pursuant to Clearing Membership Agreements and Sponsored Principal Clearing Agreements, the 

Clearing House receives all non-cash assets provided to it as Permitted Cover in respect of Accounts that 

are not Pledged Collateral Accounts pursuant to title transfer arrangements. For Pledged Collateral 

Accounts, pursuant to the relevant Pledged Collateral Addendum, the Clearing House is beneficiary of a 

pledge over non-cash assets provided to it as Permitted Cover. Non-cash assets transferred to the 

Clearing House by way of title transfer cease to belong to the Clearing Member, Sponsored Principal or 

Sponsor upon transfer to the Clearing House. Accounts available to the Clearing Members in ECS will 

contain information concerning the amounts and kinds of non-cash Permitted Cover that have been 

transferred to the Clearing House in respect of both Margin and Guaranty Fund Contributions. Non-cash 

Permitted Cover will be held in accounts of the Clearing House at a Custodian, central securities 

depository (“CSD”) or international central securities depository (“ICSD”), which accounts are in the 

name of the Clearing House, as permitted under regulatory technical standards under EMIR. Such 

accounts may be managed by a third party agent. If liquidity needs to be generated against any non-cash 

assets transferred to the Clearing House as Permitted Cover, for example in respect of a Defaulter’s 

Margin or non-defaulting Clearing Members’ Guaranty Fund Contributions following an Event of 

Default or when required to support liquidity funding for making payments, non-cash assets held by the 

Clearing House may become the subject of repurchase agreements or secured lending facilities or may 

be sold and as a result such assets or their proceeds may be held in other kinds of accounts. However, in 

the case of Margin (and Guaranty Fund Contributions which are ultimately not applied under the Rules), 

the Clearing House will remain liable to transfer assets of the same kind as those which were transferred, 

upon relevant secured obligations for the relevant Account being performed or closed out by the Clearing 

Member.

7.3 In the event that a Clearing Member wishes to lodge U.S. Government securities as Permitted Cover, 

Clearing Members are required to complete and return a Form W-8BEN “Certificate of Foreign Status 

of Beneficial Owner for United States Tax Withholding” (non-U.S. entities) or a Form W-9 “Request for 

Taxpayer Identification Number and Certification” (U.S. entities). In the event that a Sponsored 

Principal or Sponsor wishes to lodge U.S. Government securities as Permitted Cover, the Sponsored 

Principal is required to complete and return a Form W-8BEN “Certificate of Foreign Status of Beneficial 

Owner for United States Tax Withholding” (non-U.S. entities) or a Form W-9 “Request for Taxpayer 

Identification Number and Certification” (U.S. entities) specifying the name and details of the Sponsored 

Principal. Clearing Members, Sponsors and Sponsored Principals must inform the Clearing House of 

any changes in relevant tax status or the information provided in any such form. Late provision of 

information may result in unnecessary tax withholdings, deductions, penalties or costs. The Clearing 

House shall not be liable to Clearing Members, Sponsors or Sponsored Principals for any such 

withholdings, deductions, penalties or costs, save as provided otherwise pursuant to the CDS Procedures 

in relation to CDS Contracts. Where necessary, the Clearing House’s custodian will make available a 
EUROPE/1011922968.3 24

tax certificate or other details which may be required for tax purposes from time to time. Declarations 

relating to ‘beneficial ownership’ on IRS Form W-8BEN or IRS Form W-9 are based upon U.S. tax law 

concepts and do not affect the transfer of title, pledge or property rights provided for under Clearing 

Membership Agreements, Sponsor Agreements or Sponsored Principal Clearing Agreements, nor do 

they put ICE Clear on notice of any Encumbrance.

8. PERMITTED COVER: SECURITIES

8.1 The Clearing House will publish by Circular a list from time to time setting out all security classes 

acceptable as non-cash Permitted Cover, specifying any restrictions for such Permitted Cover applicable 

by way of class or status of Clearing Member or Sponsored Principal, account or Contract. Applicable 

‘haircuts’ will also be published and amended by Circular. The amount of recognised Permitted Cover 

at the Clearing House attributable to a particular security is the market value of the relevant security 

multiplied by the applicable haircut. Within ECS, details of international security identification numbers 

(ISINs) for all acceptable Permitted Cover will be provided. New issues are automatically added to the 

list and can be selected for settlement and coverage. The Clearing House is entitled to remove securities 

from the list of accepted Permitted Cover or to vary haircuts at any time.

8.2 Clearing Members and Sponsored Principals may suggest to the Clearing House’s risk department that a 

new class or series of permitted cover be included within the list of acceptable Permitted Cover. A request 

form to lodge new certificates of deposit is available on the member-only section of the Clearing House 

website. New classes will only be added after approval by the risk department. A limited sub-set of the 

acceptable securities are accepted by the Clearing House in respect of required Guaranty Fund 

Contributions. The Clearing House will set out and amend the list of acceptable Permitted Cover by a 

Circular.

8.3 The Clearing House does not recognise any value for non-cash collateral as from the day falling one full 

Business Day prior to redemption or maturity for non-cash collateral other than UK government bonds 

and seven full Business Days prior to redemption or maturity for non-cash collateral consisting of UK 

government bonds. Clearing Members and Sponsored Principals must arrange for substitute Permitted 

Cover on or prior to such time. The Clearing House will use endeavours (but shall not be required) to 

contact Clearing Members and Sponsored Principals or their Sponsors who have securities nearing 

maturity in order to assist with the timely lodgement of alternative Permitted Cover.

8.4 Notwithstanding paragraph 8.1, a Clearing Member, Sponsor or Sponsored Principal may not use any 

financial instrument otherwise agreed by the Clearing House to be eligible as Permitted Cover where 

such financial instrument is issued by such Clearing Member, Sponsor or Sponsored Principal or one of 

its Affiliates except in the case of a covered bond and only where the assets backing that bond are 

appropriately segregated within a robust legal framework which the Clearing House determines to satisfy 

applicable requirements under Applicable Law.

9. INTENTIONALLY OMITTED.

10. PERMITTED COVER: GOLD BULLION

General

10.1 This paragraph 10 applies to each Sponsored Principal (or, if a Sponsor has been appointed as responsible 

for making and receiving transfers in respect of Permitted Cover in the form of Gold Bullion on an 

Individually Segregated Sponsored Account, the Sponsor) in the same way as it applies to a Clearing 

Member, subject to Part 19 of the Rules. The following definitions apply to this part of the Finance 

Procedures:

(a) The term “Gold Bullion” shall have the same meaning as “London Good Delivery Bars” as set 

by London Bullion and Metals Association (“LBMA”).
EUROPE/1011922968.3 25

(b) “AURUM” means the electronic matching and settlement system operated by London Precious 

Metal Clearing Limited (“LPMCL”).

(c) “Market Rules” means the rules, regulations, practices and customs of the LBMA, LPMCL, 

the Financial Conduct Authority, the Prudential Regulatory Authority, the Bank of England and 

such other regulatory authority or other body, relevant to the transfer and safekeeping of Gold 

Bullion.

(d) “Unallocated Account” established at the custodian for the purpose of transferring Gold 

Bullion between the Clearing House and the Clearing Member. Gold Bullion in the Unallocated 

Account will be unidentifiable, and present the contractual obligations from the custodian to the 

Clearing House.

(e) “Allocated Account” established at the custodian for the purpose of safekeeping Gold Bullion. 

Gold Bullion on the Allocated Account is physically held in the custodian’s vaults and 

identifiable by serial numbers.

(f) “Business Day” means a day (excluding Saturdays, Sundays and public holidays) on which 

AURUM, the settlement system operated by LPMCL, is open for the transfer of Gold Bullion.

10.2 Clearing Members may use Gold Bullion to satisfy Original Margin, Initial Margin and FX Original 

Margin requirements (unless agreed otherwise by the Clearing House at its discretion). The Clearing 

House has set a Collateral limit of the lower of 250 million US Dollar or 30% of total Initial Margin or 

FX Original Margin requirement, per Clearing Member. 

10.3 Gold Bullion to be used as Permitted Cover shall conform to the eligibility criteria described by the 

LBMA and transfers shall be in conformance with the Market Rules. Clearing Members will be liable to 

the Clearing House in the event that the Clearing House incurs any loss as a result of Gold Bullion being 

delivered to the Clearing House as Original Margin, Initial Margin or FX Original Margin which does 

not comply with these Procedures

10.4 The Clearing House limits its liabilities for loss or damage of all Gold Bullion that has been transferred 

to it. Prior to the first transfer the Clearing House must have received a signed copy of the “Gold 

Supplement” to the Clearing Member Agreement or Sponsored Principal Clearing Agreement. A 

template of this agreement will be provided by the Clearing House. 

10.5 Transfers and withdrawals of Gold Bullion must be made in increments of 1 Troy Ounce. 

10.6 Gold Bullion received before 16:00 hours (London time) on a Business Day will be reflected in Permitted 

Cover on the same Business Day. Gold Bullion received after 16:00 hours (London time) will be treated 

as having been not received until the next Business Day.

10.7 Transfer of Gold Bullion to the Unallocated Account of the Clearing House, must be done in accordance 

with the provisions of the LBMA and LPMCL. The Clearing House is not responsible for, and/or shall 

have no liability whatsoever as a result of, the performance or non-performance of any settlement system 

or settlement party.

10.8 Management of the Gold Bullion as margin is only possible on Business Days as set by LPMCL. 

Additionally the Clearing House is not able to transfer assets on non-Clearing days or UK bank holidays 

in case they differ from the non-Business Days.

10.9 The Gold Bullion will be priced in accordance with the rules, policies and processes of ICE Benchmark 

Administration Limited, with price reports available at https://www.theice.com/marketdata/reports/178.

The Gold Bullion will be quoted in US Dollars. The Clearing House retains the right to adjust the price 

if the Risk Department regards this as necessary.

10.10 Gold Bullion will be held in physical form in the vaults of our custodian JPMorgan Chase Bank NA.
EUROPE/1011922968.3 26

Transfer procedure

10.11 Prior to transferring Gold Bullion the Clearing Member must provide details of the standard counterparty 

account and the contact details of the persons authorised to instruct on behalf of the Member. This 

information must be provided on the standard form provided by the Clearing House and signed by two 

Authorised Signatories. A template of this form will be provided by the Clearing House.

10.12 For every transfer of Gold Bullion, the Clearing Member must instruct the Clearing House using the 

standard form provided by the Clearing House. Any uninstructed transfers will not be accepted as 

Permitted Cover and the Clearing House shall try to return the assets as soon as possible. The Clearing 

House is not liable for any losses resulting from transfers which do not comply with these procedures.

10.13 A transfer must be made to the Unallocated Account of the Clearing House as notified to Clearing 

Members from time-to-time. The transfer has to be made via AURUM, the electronic matching and 

settlement system operated by LPMCL.

10.14 Transfer instructions to the Clearing House have to be received prior to the:

Instruction deadline 11:00 (London Time).

Instructions received after the deadline or instructions pending in anticipation of the provision of 

alternative margin after the deadline will be rejected by the Clearing House.

10.15 The Clearing House has established an Allocated Account for Gold Bullion received as Permitted Cover. 

The Clearing House shall manage the transfers between the Allocated Accounts and Unallocated 

Accounts.

10.16 The Clearing House has the right to reject instructions in the event that: (i) insufficient information has 

been supplied; (ii) counterparty accounts are not pre-advised on the list with allowed counterparties; (iii) 

when concentration limits are exceeded; and (iv) the transfer results in uncovered liabilities towards the 

Clearing House; or, (v) for any other reason that places the Clearing House under additional risk.

10.17 The position in the Clearing House’s collateral system ECS will be adjusted prior to the withdrawal or 

after confirmation of completion of the relevant transfer in the Clearing House’s Unallocated Account 

by its custodian. The adjustment of the position will have immediate effect on the value of available 

collateral.

Expiry

10.18 The Clearing House is entitled to remove Gold Bullion from the list of accepted Permitted Cover or to 

vary haircuts at any time.

11. SETTLEMENT PROCEDURES FOR NON-CASH COLLATERAL

This paragraph 11 applies to each Sponsored Principal (or, if a Sponsor has been appointed as responsible 

for meeting obligations in respect of non-cash collateral on an Individually Segregated Sponsored 

Account, the Sponsor) in the same way as it applies to a Clearing Member, subject to Part 19 of the 

Rules. 

11.1 Instruction Type

All transactions including each transfer to or withdrawal from the Clearing House will be executed free 

of payment.

11.2 Trade and Settlement Date
EUROPE/1011922968.3 27

(a) The Clearing House accepts instructions with settlement date up to two business days from trade 

date. The proposed settlement date shall be specified by the Clearing Member in its instruction. 

If this is accepted by the Clearing House, the Clearing Member must deliver the securities on

settlement date.

(b) Settlements must take place during normal opening hours of the relevant settlement or 

depository system. The Clearing House will not give settlement instructions in extended 

settlement periods such as ‘daylight’ or ‘Real Time Settlement’ periods.

11.3 Custody and Sub-custody

(a) Settlement of a transfer of Permitted Cover from the Clearing House to a Clearing Member may 

only be effected when the relevant securities to be subject to settlement are under custody of the 

Clearing House’s custodian at the moment that settlement instructions are made.

(b) Each settlement between the Clearing House and a Clearing Member must be effected pursuant 

to a transaction within the relevant settlement or depository system. 

11.4 Matching of Settlement Instructions

The Clearing House will support the matching mechanism of at least one major settlement 

system or depository for securities acceptable as Permitted Cover. ECS requires only the 

minimum necessary information required by such systems and depositories in order for 

matching of a counterparty’s instruction. The Clearing House will notify Clearing Members of 

the relevant account details for matching. However, it is the responsibility of the Clearing 

Member to ensure that instructions entered into ECS are correctly matched. The Clearing House 

will not be liable for any losses of Clearing Members or third parties caused by non-settlement 

or a delay in settlement as a result of the actions or omissions of a settlement system, a 

depository or the Clearing Member (save for any liability which by law may not be excluded).

Matching criteria per custodian or central securities depository (and ICE settlement details) will 

be sent out by Circular. Settlement timing per settlement system or depository is set out below: 

CBF (DE) Instruction deadline: 14:30 (GMT/BST)

Trade date: Entry day

Contractual Settlement date: Entry day or up to two Business

Days from trade date

EOC France 

(FR)

Instruction deadline: 12:30 (GMT/BST)

Trade date: Entry day

Contractual settlement date: Entry day or up to two Business

Days from trade date

EOC GB/IE 

(GB)

Instruction deadline: 15:00 (GMT/BST)

Trade date: Entry day

Contractual Settlement date: Entry day or up to two Business

Days from trade date
EUROPE/1011922968.3 28

FED (US) Instruction deadline: 17.00 (GMT/BST)

Trade date: Entry day

Contractual Settlement date: Entry day or up to two Business

Days from trade date

EOC bank Instruction deadline: 15:00 (GMT/BST)

Trade date: Entry day

Contractual Settlement date: Entry day or up to two Business

Days from trade date

CBL 

(Clearstream 

Lux.)

Instruction deadline: 12:00 (GMT/BST)

Trade date: Entry day

Contractual Settlement date: Entry day or up to two Business

Days from trade date

Direct accounts of the Clearing House at settlement systems may also be notified by the Clearing 

House to Clearing Members from time to time and must be used instead of any of the accounts

referenced in any Circular issued by the Clearing House pursuant to this paragraph 11.4, where 

the Clearing House and Clearing Member are able to do so.

11.5 Settlement cancellations and unsettled transactions

(a) Clearing Members may only cancel settlement instructions prior to the time when the Clearing 

House sends settlement instructions to its custodian. After the Clearing House has sent 

instructions to its custodian, the Clearing House and ECS will assume that the transaction has 

been executed and settled.

(b) All unsettled transactions are automatically cancelled at the end of each day in ECS. In the 

event that the relevant settlement system or depositary does not support one-sided cancellations 

and the transaction settles after the contractual settlement date, relevant securities will not be 

taken into account as Permitted Cover. If same-day settlement does not occur but the Clearing 

Member still wishes to make settlement, it must cancel the instruction and re-enter that 

instruction.

11.6 Settlement deadlines

All settlements will be executed by the Clearing House with a request for same-day settlement. As 

deadlines for settlement systems or deadlines on particular days may vary, the Clearing House will 

provide details of normal deadlines for free-of-payment instructions for each supported settlement system 

by Circular. Deadlines for settlement systems will be set out and updated in Circulars. Any adjustments 

of deadlines will be published by Circular. Instructions received after a specified deadline will be 

rejected by ECS.

11.7 Holidays affecting settlement systems
EUROPE/1011922968.3 29

(a) If a settlement system or depository is closed, it will not be possible to transfer securities within 

that system. Clearing Members are allowed to use alternative settlement systems or types of 

collateral to cover Margin requirements or Guaranty Fund Contribution requirements. Clearing 

Members wishing to deliver securities through either of Euroclear Bank or Clearstream Bank 

Luxemburg should contact the Clearing House’s Treasury department.

(b) UK bank holidays will not affect the settlement of transaction in non-UK instruments.

11.8 Status settlement transaction

The Clearing House will provide updated information on the settlement status of transactions through 

ECS. Clearing Members are responsible for monitoring the status of settlements. The status of a 

transaction as matched or not matched is not reported upon by the Clearing House and must be confirmed 

by Clearing Members directly with the relevant settlement system or depository.

12. INTENTIONALLY OMITTED. 

13. RISK MANAGEMENT

13.1 Contacting Risk Management

Clearing Members, Sponsors and Sponsored Principals should contact the Clearing House’s Risk 

department to discuss any special issues relating to Margin, Permitted Cover, Guaranty Fund 

Contributions, Position Limits or any unusual circumstances or events.

13.2 Specific information request

Clearing Members, Sponsors and Sponsored Principals may be required from time to time to respond to 

an information request made by the Clearing House. Such a request may include (but shall not be limited 

to) information concerning:

(a) the nature and extent of Open Contract Positions;

(b) identification of a Customer or Customers for whom Open Contract Positions are held;

(c) explanation of the commercial strategy or rationale relating to Open Contract Positions;

(d) any economically similar positions at other Clearing Organisations or Exchanges or in 

over-the-counter instruments; and/or

(e) details around plans to close out or reduce any Open Contract Positions.

13.3 The Clearing House shall be entitled to require written responses and may make further or follow-up 

requests and visits and inspections. This paragraph 13 is without prejudice to the Clearing House’s rights 

under the Rules, including in relation to the provision of information, audit and disciplinary proceedings.

13.4 Staff Availability

Clearing Members, Sponsors and Sponsored Principals may be required from time to time to make staff 

of suitable seniority available to attend meetings, called by the Clearing House at reasonable notice, in 

order to assess:

(a) the Clearing Member’s, Sponsor's or Sponsored Principal's compliance with the Rules and these 

Procedures;

(b) risks to which the Clearing House, Clearing Member, Sponsor or Sponsored Principal is 

exposed; or
EUROPE/1011922968.3 30

(c) any related purposes.

13.5 Default Procedure

In the case where the payment deadline is not met, the Clearing House may initiate a default procedure. 

Without prejudice to Part 9 of the Rules, the default procedure in general may use the following tools:

(a) setting of final deadlines for the Clearing Member, Sponsor or Sponsored Principal to meet 

requirements;

(b) imposition of Position Limits;

(c) additional Margin requirements;

(d) restriction of trading (e.g. new trades only allowed to liquidate existing positions);

(e) transfer of Open Contract Positions;

(f) liquidation of Permitted Cover;

(g) liquidation of Guaranty Fund Contributions; or

(h) closure of Open Contract Positions.

13.6 Margin Parameters

The Clearing House monitors market volatilities on a daily basis. The Clearing House will review 

Original Margin, Initial Margin and FX Original Margin rates on a periodic and ad hoc basis. Changes 

to Original Margin, Initial Margin and FX Original Margin rates will be notified to Clearing Members 

by Circular. With respect to F&O Contracts, ad hoc rate changes will become effective on the next 

Business Day. Routine rate changes will be implemented on the date given in the Circular announcing 

such changes, normally five Business Days after the date of the Circular. With respect to F&O Contracts, 

changes to Original Margin rates will be based on an analysis of appropriate factors as determined by the 

Clearing House, including market prices, historical and implied volatilities of relevant contracts, spreads 

and correlations between related commodities, other current and anticipated conditions (including 

liquidity) in the market for the contracts and other relevant information.

13.7 Haircuts

The Clearing House will review haircuts applicable for Permitted Cover on a periodic and ad hoc basis. 

Changes to haircuts will be notified to Clearing Members by Circular. With respect to Permitted Cover 

for F&O Contracts, ad hoc rate changes will become effective on the next Business Day. Routine rate 

changes will be implemented on the date given in the Circular announcing such changes, normally five 

Business Days after the date of the Circular. With respect to Permitted Cover for F&O Contracts, 

changes to haircuts will be based on an analysis of appropriate factors as determined by the Clearing 

House, including historical and implied price volatility of such assets, current and anticipated conditions 

in the market for those assets, spreads and correlations between relevant assets, liquidity in the trading 

market for those assets, composition of the relevant market, default risk (including sovereign risk) with 

respect to those assets, relevant foreign exchange market conditions and other relevant information.

13.8 Permitted Capital Limits

The Clearing House monitors the relationship between Capital and outstanding Original Margin, Initial 

Margin and FX Original Margin obligations of Clearing Members. If, on aggregate, a Clearing 

Member’s Original Margin, Initial Margin or FX Original Margin is greater than three times the Clearing 

Member’s Capital, the Clearing House may require that further Capital (or substitute Capital) be put in 

place by the Clearing Member.
EUROPE/1011922968.3 31

The Clearing House will endeavour to contact Clearing Members that may be required to put in place 

additional Capital in advance of such requirement becoming necessary, in order to agree steps to be taken 

by the Clearing Members.

13.9 Concentrated Positions

The Clearing House monitors Open Contract Positions on a daily basis. Where the Clearing House 

determines an Open Contract Position to be concentrated, as defined by its large positions policy, the 

Clearing House may, at its discretion, require that the Clearing Member or Disclosed Principal do any of 

the following:

(a) reduce an Open Contract Position; or

(b) lodge additional Permitted Cover with the Clearing House.

Positions will be subject to an extra Margin requirement in the case that a single Clearing Member holds 

more than 20% of the total Margin requirement in the margined product group. 

14. GUARANTY FUND PARAMETERS AND RESTRICTIONS

14.1 F&O Guaranty Fund

The following parameters apply to the F&O Guaranty Fund and F&O Guaranty Fund Contributions, in 

addition to those parameters specified in the Rules (in the case of currencies save to the extent that the 

Clearing House notifies otherwise whether by Circular or to a particular Clearing Member or allows a 

different currency to be used to cover the relevant requirements in accordance with these Finance 

Procedures):

(a) F&O Guaranty Fund Contributions will be calculated and payable in USD;

(b) the Clearing House will establish from time to time a minimum F&O Guaranty Fund 

Contribution for each Clearing Member, based on a methodology adopted by the Clearing 

House, of not less than USD 1 million;

(c) minimum cash portion of F&O Guaranty Fund Contribution is 50%;

(d) in addition to the above requirement, first USD10 million in cash (such that any F&O Guaranty 

Fund Contribution of less than USD10 million must be provided entirely as cash) unless agreed 

otherwise by the Clearing House; and

(e) other Permitted Cover for F&O Guaranty Fund Contributions must be USD denominated for 

F&O Guaranty Fund Contributions.

(f) The start and end dates of Guaranty Fund Periods will be communicated to F&O Clearing 

Members.

14.2 CDS Guaranty Fund

The following parameters apply to the CDS Guaranty Fund and CDS Guaranty Fund Contributions, in 

addition to those parameters specified in the Rules (in the case of currencies save to the extent that the 

Clearing House notifies otherwise whether by Circular or to a particular Clearing Member or allows a 

different currency to be used to cover the relevant requirements in accordance with these Finance 

Procedures):

(a) CDS Guaranty Fund Contributions will be calculated and payable in EUR, except for Guaranty 

Fund Contributions relating to Open Contract Positions in Sovereign Contracts, which are 

calculated and payable in USD;
EUROPE/1011922968.3 32

(b) minimum CDS Guaranty Fund Contribution of EUR 15 million for CDS Contracts other than 

Sovereign Contracts;

(c) minimum cash portion of CDS Guaranty Fund Contribution is 50% for each currency;

(d) in addition to the above requirements, minimum of EUR 15 million in cash (such that any CDS 

Guaranty Fund Contribution of EUR 15 million must be provided entirely as cash) unless agreed 

otherwise by the Clearing House;

(e) other Permitted Cover for CDS Guaranty Fund Contributions must be EUR denominated, except 

for Guaranty Fund Contribution in relation to Sovereign Contracts, which must be USD 

denominated;

(f) the start and end dates of Guaranty Fund Periods will be communicated to CDS Clearing 

Members; and

(g) the parameters for determining the CDS Guaranty Fund Contributions of CDS Clearing 

Members will be determined by the Clearing House in consultation with the CDS Product Risk 

Committee.

14.3 FX Guaranty Fund

The following parameters apply to the FX Guaranty Fund and FX Guaranty Fund Contributions, in 

addition to those parameters specified in the Rules (in the case of currencies save to the extent that the 

Clearing House notifies otherwise whether by Circular or to a particular Clearing Member or allows a 

different currency to be used to cover the relevant requirements in accordance with these Finance 

Procedures):

(a) FX Guaranty Fund Contributions will be calculated and payable in USD;

(b) minimum FX Guaranty Fund Contributions are as specified by the Clearing House;

(c) minimum cash portion of FX Guaranty Fund Contribution is 50%;

(d) other Permitted Cover for FX Guaranty Fund Contributions must be USD denominated;

(e) the start and end dates of Guaranty Fund Periods will be communicated to FX Clearing 

Members; and

(f) the parameters for determining the FX Guaranty Fund Contributions of FX Clearing Members 

will be determined by the Clearing House in consultation with the FX Product Risk Committee.

15. CLEARING HOUSE CONTRIBUTIONS

15.1 Clearing House Initial Contributions

The following provisions apply to each of the Clearing House CDS Initial Contribution, Clearing House 

F&O Initial Contribution and the Clearing House FX Initial Contribution:

(a) The Clearing House shall keep, and indicate separately in its balance sheet, an amount of 

dedicated own resources as the Clearing House Initial Contributions. No resources other than 

capital, including retained earnings and reserves as referred to in Article 16 of EMIR, shall 

qualify as Clearing House Initial Contributions.

(b) The Clearing House CDS Initial Contribution, Clearing House F&O Initial Contribution and 

the Clearing House FX Initial Contribution shall each be constituted by two parts: (i) a minimum 

contribution of own resources for purposes of article 35(2) of Commission Delegated 
EUROPE/1011922968.3 33

Regulation No 153/2013 (as calculated under paragraphs 15.1(c)-(d)); and (ii) an additional 

voluntary contribution constituted by the remainder of the Clearing House Initial Contribution 

in question, as calculated in accordance with this paragraph 15. 

(c) The Clearing House shall calculate the minimum sum of Clearing House Initial Contributions 

by multiplying its minimum required capital (including retained earnings and reserves) to be 

maintained by it in accordance with article 16 of EMIR, by 25%. 

(d) The minimum sum calculated in accordance with paragraph 15.1(c) shall be allocated to the 

Clearing House CDS Initial Contribution, Clearing House F&O Initial Contribution and 

Clearing House FX Initial Contribution in proportion to the sizes of the CDS Guaranty Fund, 

F&O Guaranty Fund and FX Guaranty Fund respectively, and shall be separately indicated in 

the Clearing House’s balance sheet.

(e) The Clearing House shall revise the minimum sum of Clearing House Initial Contributions and 

breakdown of the same between the Clearing House CDS Initial Contribution, Clearing House 

F&O Initial Contribution and Clearing House FX Initial Contribution on a yearly basis. 

(f) The Clearing House may use such exchange rates as it sees fit for purposes of calculating the 

relative sizes of the CDS Guaranty Fund, F&O Guaranty Fund and FX Guaranty Fund.

15.2 Clearing House CDS Contributions

(a) The Clearing House CDS Initial Contribution shall be at least the higher of: (i) the EUR 

equivalent of USD 10 million, calculated at the exchange rate specified in paragraph 2.2 of the 

Finance Procedures on 28 July 2009; and (ii) the minimum required under paragraph 15.1. The 

Clearing House may increase the Clearing House CDS Initial Contribution from time to time 

and shall be obliged on or prior to the first anniversary of the first date on which the Clearing 

of CDS Contracts recorded in CDS Customer Accounts becomes operationally available 

("Customer Integration Date") to have made an aggregate Clearing House CDS Initial 

Contribution (including the initial USD 10 million equivalent) of at least the higher of: (A) the 

EUR equivalent of USD 25 million, calculated at the exchange rate specified in paragraph 2.2 

of the Finance Procedures on the first anniversary of the Customer Integration Date; and (B) the 

minimum required under paragraph 15.1. The amount of the Clearing House CDS Initial 

Contribution may be further increased by the Clearing House redesignating all or part of any of 

the Clearing House CDS GF Contributions as Clearing House CDS Initial Contributions. Any 

such redesignation shall be notified by Circular. Such amounts are subject to any reduction 

following the application of any amount of Clearing House CDS Initial Contribution pursuant 

to Rule 1103. 

(b) If on or after the first anniversary of the Customer Integration Date, the value, determined in the 

same way in which the value of Guaranty Fund Contributions is calculated, of the assets 

constituting the Clearing House CDS Initial Contribution is below the required amount of the 

Clearing House CDS Initial Contribution under paragraph 15.2(a)(i) or 15.2(a)(A) because of a 

decrease in the value of assets representing such Clearing House CDS Initial Contribution 

(including such decreases that occurred prior to such first anniversary or as the result of 

investments of the Clearing House CDS Initial Contribution, but excluding decreases resulting 

from the application of any amount of Clearing House CDS Initial Contribution pursuant to 

Rule 1103 and excluding any decreases due to exchange rate fluctuations described in paragraph 

15.2(g)), the Clearing House shall be required, by the open of business on the following 

Business Day, to make additional Clearing House CDS Initial Contributions sufficient to cause 

the assets constituting the Clearing House CDS Initial Contribution to have a value, determined 

in the same way in which the value of Guaranty Fund Contributions is calculated but excluding 

the effects of any exchange rate fluctuations as aforesaid, of at least the required amount in EUR 

of the Clearing House CDS Initial Contribution (plus the required amount in EUR of any 
EUROPE/1011922968.3 34

amounts of Clearing House CDS GF Contributions that have been redesignated as Clearing 

House CDS Initial Contributions under paragraph 15.2(a)). 

(c) The Clearing House may allocate amounts as Clearing House CDS GF Contributions and, by 

the second anniversary of the Customer Integration Date, shall be obliged to have allocated 

amounts as Clearing House CDS GF Contributions (net of any decreases resulting from the 

application of any amount of Clearing House CDS GF Contributions pursuant to Rule 1103) on 

or before such second anniversary of the Customer Integration Date of at least the EUR 

equivalent of USD 25 million, calculated at the exchange rate specified in paragraph 2.2 of the 

Finance Procedures on the second anniversary of the Customer Integration Date (from time to 

time, the aggregate amount of Clearing House CDS GF Contributions being reduced by any 

application of any amount of Clearing House CDS GF Contributions pursuant to Rule 1103 for 

such period as is permitted under this paragraph 15.2(c) and further as a result of Clearing House 

CDS GF Contributions being redesignated as Clearing House CDS Initial Contributions under 

paragraph 15.2(a)). If, prior to the second anniversary of the Customer Integration Date, the 

aggregate amount of Clearing House CDS GF Contributions is reduced by any application of 

any amount of Clearing House CDS GF Contributions pursuant to Rule 1103, the Clearing 

House shall be required, by the open of business on the following Business Day, to allocate 

additional amounts as Clearing House CDS GF Contributions equal to the amount by which the 

Clearing House CDS GF Contribution was applied and such additional amount shall constitute 

part of the Clearing House CDS GF Contribution (subject to the same being redesignated as 

Clearing House CDS Initial Contributions under paragraph 15.2(a)).

(d) If on or after the second anniversary of the Customer Integration Date, the value, determined in 

the same way in which the value of Guaranty Fund Contributions is calculated, of the assets 

constituting the Clearing House CDS GF Contribution (or which would have constituted the 

Clearing House CDS GF Contribution but for their redesignation as Clearing House CDS Initial 

Contribution under paragraph 15.2(a)) is below the required amount of the Clearing House CDS 

GF Contribution because of a decrease in the value of assets representing such Clearing House 

CDS GF Contribution (excluding any decreases due to exchange rate fluctuations described in 

paragraph 15.2(g)) or the application of any amount of Clearing House CDS GF Contribution

or Clearing House CDS Initial Contribution pursuant to Rule 1103, the Clearing House shall be 

required, by the open of business on the following Business Day, to make additional Clearing 

House CDS GF Contributions sufficient to cause the assets constituting the Clearing House 

CDS GF Contribution to have a value, determined in the same way in which the value of 

Guaranty Fund Contributions is calculated but excluding the effects of any exchange rate 

fluctuations as aforesaid, of at least the required amount in EUR of the Clearing House CDS GF 

Contribution. Such assets may be redesignated as Clearing House CDS Initial Contributions 

under paragraph 15.2(a).

(e) For the purposes of calculating the amount of any application of any amount of Clearing House 

CDS Contribution pursuant to Rule 1103, the value of the Clearing House CDS Contribution 

shall be determined in EUR as of the date of such application. Subject to paragraph (g), any 

deficiency of the actual Clearing House CDS Contributions relative to the required amounts at 

the time of application shall remain the liability of the Clearing House, notwithstanding 

anything to the contrary in the Rules or Procedures.

(f) The Clearing House may make withdrawals from accounts containing the Clearing House CDS 

Initial Contribution or Clearing House CDS GF Contribution only to the extent the value of the 

relevant assets exceeds the required EUR requirement.

(g) Notwithstanding any other provision of this paragraph 15.2, the Clearing House shall not be 

obliged to top up or redesignate any amount or part of any Clearing House CDS Contribution 

as a result of fluctuations in currency exchange rates between USD and EUR compared to the 

rates at which any EUR requirement for any Clearing House CDS Contribution was calculated, 

whether to ensure that any Clearing House CDS Contribution equals any USD amount specified 
EUROPE/1011922968.3 35

in this paragraph 15.2 or otherwise (save as required pursuant to paragraph 15.1). 

Notwithstanding any other provision of this paragraph 15.2 the Clearing House shall not be 

entitled to withdraw or redesignate any amount or part of any Clearing House CDS Contribution 

as a result of fluctuations in currency exchange rates between USD and EUR compared to the 

rates at which any EUR requirement for any Clearing House CDS Contribution was calculated, 

whether to ensure that any Clearing House CDS Contribution equals any USD amount specified 

in this paragraph 15.2 or otherwise.

15.3 Clearing House FX Contributions

(a) The Clearing House FX Contributions are to be determined and allocated from time to time in 

accordance with the following provisions:

(i) the Clearing House FX Initial Contribution shall be at least the higher of: (A) USD 2.5 

million; or (B) the minimum required under paragraph 15.1;

(ii) the Clearing House FX GF Contribution shall be at least USD 2.5 million;

(iii) subject to paragraph 15.1, the maximum amount of the Clearing House FX Initial 

Contribution shall be USD 25 million;

(iv) the maximum amount of the Clearing House FX GF Contribution shall be USD 25 

million;

(v) subject to the minima in paragraphs (i) and (ii) above and any applicable maxima in 

paragraphs (iii) and (iv) above, the total Clearing House FX Contributions from time 

to time shall be at least of an amount representing 5% of the total FX Guaranty Fund 

Contributions required from time to time to be provided to the Clearing House by FX 

Clearing Members (excluding FX Guaranty Fund Contributions applied under Rule 

1103); 

(vi) subject to paragraph (vii), the amount of the Clearing House FX Initial Contribution 

and the amount of the Clearing House FX GF Contribution from time to time shall 

always be identical to one another, provided that the total of the Clearing House FX 

Initial Contribution and Clearing House FX GF Contribution shall be capped at USD 

50 million (subject to paragraph 15.1); and

(vii) if the calculations in paragraph (vi) result in a fraction of a USD cent being allocated 

to the Clearing House FX GF Contribution, that fraction of a cent shall be allocated to 

the Clearing House FX Initial Contribution so as to round up the Clearing House FX 

Initial Contribution to the nearest higher USD cent and round down the Clearing House 

FX GF Contribution to the nearest lower USD cent.

(b) If the total amount of Clearing House FX Contributions is reduced by any application of any 

amount of Clearing House FX Contributions pursuant to Rule 1103, the Clearing House shall, 

by the open of business on the Business Day following the date of any application of Clearing 

House FX Contributions, allocate additional Clearing House FX Contributions equal to the 

amount by which the Clearing House FX Contributions were applied. Such allocations shall be 

made as Clearing House FX Initial Contribution and Clearing House FX GF Contribution in 

proportion to the amount by which each such contribution was applied.

(c) For the purposes of calculating the amount of any application of any amount of Clearing House 

FX Contributions pursuant to Rule 1103, the value of the Clearing House FX Contribution so 

applied shall be determined in USD as of the date of such application at the exchange rates used 

by the Clearing House pursuant to the Finance Procedures at the relevant time, where any 

exchange rate is required to be applied.
EUROPE/1011922968.3 36

15.4 General Provisions relevant to Clearing House Contributions

(a) The Clearing House may substitute assets constituting Clearing House Contributions in the 

same way and to the same extent that assets constituting Guaranty Fund Contributions may be 

substituted by Clearing Members.

(b) Without prejudice to Applicable Laws relating to insolvency, the Clearing House shall have no 

obligation to contribute or allocate any additional Clearing House Contributions in any situation 

in which either: (i) Rule 209(c)(ii) or (iii) or Rule 912 applies; or (ii) Rule 209(c)(ii) or (iii), 

Rule 209(f)(ii), except in either case in respect of any due but unallocated amounts at the time 

of such occurrence.

(c) There shall not be any breach by the Clearing House of its obligations under this paragraph 15 

solely as a result of any temporary reduction to any Clearing House Contributions as a result of 

the application of any amount of Clearing House Contributions pursuant to Rule 1103.