LCH | 10 Paternoster Square | London EC4M 7LS | T: +44 (0)20 7426 7000 | F: +44 (0)20 7426 7001 | lch.com

LCH Group Holdings Limited | LCH Limited | Banque Centrale de Compensation | LCH.Clearnet LLC

LCH Group Holdings Limited. Registered in England No. 4743602 Registered Office: 10 Paternoster Square, London, EC4M 7LS

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VIA CFTC Portal

Mr Christopher Kirkpatrick

Commodity Futures Trading Commission

1155 21st Street NW

Three Lafayette Centre

Washington DC 20581

02 January 2024

LCH Limited Self-Certification: Several changes to LCH Limited’s Rulebook

Dear Mr Kirkpatrick,

Pursuant to Commodity Futures Trading Commission (“CFTC”) regulation §40.6(a), LCH Limited 

(“LCH”), a derivatives clearing organization (“DCO”) registered with the CFTC is submitting for selfcertification several minor proposed rule changes within its Rulebook. 

Part I: Explanation and Analysis

LCH intends to make the following changes to its Rulebook:

1. E Account

LCH will re-add two paragraphs which had previously been removed from the Rulebook, which refers 

to ‘Excess Amounts’. These paragraphs have been re-added to provide clarification around the use 

of this account. The paragraph outlines that LCH may upon request of the FCM Clearing Member 

open an excess account called ‘Excess Accounts’. This account is a sub-account of the Omnibus

Client Segregation Account (“C Account”) and where the FCM Clearing Member may only deliver 

FCM Buffer to its Excess Account. 

2. Collateral Takebacks

LCH intends to add an explicit obligation that any non-cash collateral used to cover initial margin 

requirements should be withdrawn from the Clearing Member’s account prior to the maturity record 

date. 

3. Registration time

LCH updated several sections of its Rulebook to ensure a consistent definition of ‘registration time’, 

which is defined as the time at which the registration of a cleared contract between LCH and a 

member occurs.

Part II: Description of Rule Changes

The changes will be made to the following parts of LCH’s Rulebook:

1. E Account

• FCM Regulations, Excess Account added to the definitions, reference to the account in 

Regulation 15(c)(ii)(C) and 15(d)(ii).

• FCM Procedures, section 2.1.7 Excess Account and 2.2.7 Excess Account. 
LCH | 10 Paternoster Square | London EC4M 7LS | T: +44 (0)20 7426 7000 | F: +44 (0)20 7426 7001 | lch.com

LCH Group Holdings Limited | LCH Limited | Banque Centrale de Compensation | LCH.Clearnet LLC

LCH Group Holdings Limited. Registered in England No. 4743602 Registered Office: 10 Paternoster Square, London, EC4M 7LS

RESTRICTED - EXTERNAL

2. Collateral Takebacks

• Procedure Section 4 (Margin and Collateral), section 1.1.7(e).

• FCM Procedures, section 4.1.10(e).

3. Registration time

• General Regulations, definitions and Regulation 16(c).

• Procedure Section 2C (SwapClear Clearing Service), section 1.3.5 Registration of New

Trades.

• Procedure Section 2I (ForexClear Clearing Service), section 1.2.5(a) and (e).

• Procedure Section 2J (Listed Interest Rates Clearing Service), section 1.3 Registration.

• FCM Regulations, definitions and Regulation 46.

The changes to the rules are included in Appendices I-X in black line form. The changes will 

be effective no earlier than 17 January 2024. 

Part III: Core Principle Compliance 

LCH has reviewed the Proposed Rule Changes against the requirements of the DCO Core 

Principles, specifically Core Principle L on Public Information, and finds that it will continue to comply 

with the requirements and standards therein. The changes have been made to provide LCH’s 

membership with additional clarity with regards to collateral management and consistent definitions 

across the rulebook. 

Part IV: Public Information 

LCH has posted a notice of pending certification with the CFTC and a copy of the submission on 

LCH’s website at: https://www.lch.com/resources/rulebooks/proposed-rule-changes.

Part V: Opposing Views 

There were no opposing views expressed to LCH by governing board or committee members, 

members of LCH or market participants. 

Certification 

LCH hereby certifies to the Commodity Futures Trading Commission, pursuant to the procedures 

set forth in CFTC Regulation §40.6, that the attached submission complies with the Commodity 

Exchange Act, as amended, and the regulations promulgated thereunder. 

Should you have any questions please contact me at ebba.andersson1@lseg.com. 

Yours sincerely, 

Ebba Andersson

Senior Compliance Officer

LCH Limited
 

LCH | 10 Paternoster Square | London EC4M 7LS | T: +44 (0)20 7426 7000 | F: +44 (0)20 7426 7001 | lch.com

LCH Group Holdings Limited | LCH Limited | Banque Centrale de Compensation | LCH.Clearnet LLC

LCH Group Holdings Limited. Registered in England No. 4743602 Registered Office: 10 Paternoster Square, London, EC4M 7LS

RESTRICTED - EXTERNAL

Appendix I

FCM Regulations – E Account
CORPORATE

FCM REGULATIONS OF THE CLEARING HOUSE

LCH LIMITED
FCM Regulations

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October November 2023

pursuant to FCM Regulation 46(q) or FCM Regulation 

49(r) and in accordance with the FCM Procedures

“Eligible Transferor” means an FCM Clearing Member that the Clearing House

permits, in its sole and absolute discretion, and subject 

always to compliance with Applicable Law, to transfer all 

or part of its Transferring SwapClear Contracts or 

Transferring ForexClear Contracts to an Eligible 

Transferee pursuant to FCM Regulation 46(q) or FCM 

Regulation 49(r) and in accordance with the FCM 

Procedures

“EMIR Client Clearing” means the provision of Client Clearing Services on an 

Individual Segregated Account or Omnibus Segregated 

Account basis as set out in the Regulation 10 and 

Regulation 11 of the UK General Regulations (capitalized 

terms used and not otherwise defined herein bearing the 

same meanings set out in the UK General Regulations).

“Encumbered FCM Buffer” has the meaning assigned to it in FCM Regulation 15(c)(ii).

“Exchange” means an organization (whether an exchange, association, 

company, corporation, limited partnership or otherwise), 

including a designated contract market and a foreign board 

of trade (whether registered as such with the CFTC), 

responsible for administering a futures, options, or stock 

market (in its capacity as the administrator of such a 

market), to which the Clearing House provides FCM 

Clearing Services. The term “Exchange” shall include a 

Rates Exchange, save where the context otherwise 

requires.

“Exchange Board” means the board of directors or other governing body 

(whether called a board, a committee or otherwise) of an 

Exchange.

“Exchange Rules” means the rules, regulations, administrative procedures, 

memorandum and articles of association, charter, 

certificate of incorporation, by-laws or similar constituent 

documents which regulate an Exchange and the market 

administered by it as notified from time to time to the 

Clearing House and, without prejudice to the generality of 

the foregoing, any regulations or directions made by its 

Board and any procedures, practices and administrative 

requirements of the Exchange. The term “Exchange 

Rules” shall include Rates Exchange Rules, save where the 

context otherwise requires.

“Excess Account” has the meaning assigned to it in the FCM Procedures.
FCM Regulations

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October November 2023

REGULATION 15 MARGINING OF SWAP PRODUCT CLIENT ACCOUNTS: 

CERTAIN ADDITIONAL PROVISIONS; WITHOUT CLIENT EXCESS MODEL; 

WITH CLIENT EXCESS MODEL

The contents of this FCM Regulation 15 apply only with respect to the clearing and margining 

of Swap Products.

(a) FCM Buffer. An FCM Clearing Member is permitted to furnish Collateral that is the 

property of such FCM Clearing Member (and not of its FCM Clients) to the Clearing 

House to be attributed to any of its FCM Omnibus Swaps Client Accounts with LCH 

as excess Margin for the benefit of all of its FCM Clients with positions registered or 

to be registered in such account, and the value of such Collateral as determined by the 

Clearing House in accordance with the FCM Rulebook (such value, the “FCM Buffer”) 

shall be recorded by the Clearing House as attributable to such FCM Clearing Member 

(for the benefit of its FCM Clients) in a sub-account of the applicable FCM Omnibus 

Swaps Client Account with LCH designated as an FCM Buffer sub-account (each such 

sub-account, with respect to each FCM Clearing Member, an “FCM Buffer SubAccount”). The use and application of FCM Buffer in the With Client Excess Model 

and the Without Client Excess Model is further discussed below in paragraphs (e) and 

(f), respectively, and in the FCM Procedures.

(b) Unallocated Excess.

(i) Any Margin attributable to an FCM Omnibus Swaps Client Account with LCH 

that is not allocated to an FCM Client Sub-Account or the FCM Buffer SubAccount therein (such Margin, “Unallocated Excess”) shall be credited by the 

Clearing House to the Unallocated Excess sub-account (the “Unallocated 

Excess Sub-Account”) of such FCM Omnibus Swaps Client Account with 

LCH. The Clearing House shall hold Unallocated Excess for the benefit of the 

FCM Clients corresponding to such FCM Omnibus Swaps Client Account with 

LCH as a class (the identities and amounts of which shall be recorded by such 

FCM Clearing Member and not the Clearing House in accordance with this 

FCM Regulation 15 and other applicable provisions of the FCM Rulebook), 

segregated in accordance with the CEA and CFTC Regulations, including Part 

22 of the CFTC Regulations. The Clearing House shall treat and record the 

Unallocated Excess in respect of an FCM Omnibus Swaps Client Account with 

LCH on an unallocated basis, and the Clearing House shall not attribute any 

portions of such Unallocated Excess to the individual FCM Clients of such FCM 

Clearing Member (although the Unallocated Excess shall be held for the benefit 

of the applicable FCM Clients as a class (in accordance with Part 22 of the 

CFTC Regulations), the records of which are kept by the applicable FCM 

Clearing Member).

(ii) Each FCM Clearing Member that maintains Unallocated Excess in any of its 

Unallocated Excess Sub-Accounts on behalf of its applicable FCM Clients shall 

ensure that its books and records accurately reflect at all times the FCM Client 

or FCM Clients to which such Unallocated Excess is attributable and the amount 

attributable to each such FCM Client.

(iii) Subject to paragraph (v) below, the Clearing House shall not be permitted to, 

and shall not, at any time (x) apply any Unallocated Excess to the FCM Clearing 
FCM Regulations

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October November 2023

Member’s Proprietary Account, or (y) except in accordance with an instruction 

(provided in accordance with the FCM Rulebook) by the applicable FCM 

Clearing Member, apply Unallocated Excess to an FCM Client Sub-Account or 

to the FCM Buffer Sub-Account.

(iv) Upon the request of an FCM Clearing Member (including as a result of a 

standing instruction of an FCM Clearing Member) in accordance with the FCM 

Procedures, the Clearing House will return Unallocated Excess to an FCM 

Clearing Member. The FCM Clearing Member shall be deemed to represent to 

the Clearing House, upon making any such request, that any such request 

complies with the CFTC Regulations and that the returned Unallocated Excess 

will remain segregated as required under the CFTC Regulations and the FCM 

Rulebook.

(v) Upon the default of an FCM Clearing Member, any Unallocated Excess in such 

FCM Clearing Member’s Unallocated Excess Sub-Accounts shall be held by 

the Clearing House for the benefit of the applicable FCM Clients in accordance 

with Part 190 of the CFTC Regulations and Applicable Law, and the Clearing 

House shall not be permitted to apply any such Unallocated Excess to the 

obligations of the FCM Clearing Member to the Clearing House (on behalf of 

its FCM Clients or otherwise) except to the extent required by Applicable Law 

and/or directed by the applicable bankruptcy trustee or Regulatory Body in 

accordance with Applicable Law. 

(vi) Certain additional procedures relating to Unallocated Excess differ based on 

whether the FCM Omnibus Swaps Client Accounts with LCH to which such 

Unallocated Excess corresponds is subject to the Without Client Excess Model 

or the With Client Excess Model, as such models are described in FCM 

Regulation 15(c) and FCM Regulation 15(d) (and in other applicable provisions 

of the FCM Rulebook).

(c) Without Client Excess Model. The provisions of this FCM Regulation 15(c) describe 

certain components of the Clearing House’s model for margining, in accordance with 

Part 22 of the CFTC Regulations, FCM Omnibus Swaps Client Accounts with LCH in 

a manner which prohibits the maintenance of Excess Margin in FCM Client SubAccounts on a day-to-day basis (such model is referred to in the FCM Rulebook as the 

“Without Client Excess Model”). An alternative model which permits such Excess 

Margin to be maintained (the With Client Excess Model) is described in FCM 

Regulation 15(d). The Without Client Excess Model is the default model that shall 

apply to an FCM Clearing Member’s FCM Omnibus Swaps Client Accounts with LCH, 

and such model shall apply to all such accounts except where an FCM Clearing 

Member, to the extent permitted by the FCM Procedures, applies to and is approved by 

the Clearing House to have one or more of its FCM Omnibus Swaps Client Accounts 

with LCH treated in accordance with the alternative model (the With Client Excess 

Model described in FCM Regulation 15(d)).

The provisions of this FCM Regulation 15(c) apply only to FCM Omnibus Swaps 

Client Accounts with LCH that are subject to the Without Client Excess Model.

(i) Restriction on Excess Margin in FCM Client Sub-Accounts on a Day-toDay Basis. Excess Margin is not permitted to be maintained in any FCM Client 
FCM Regulations

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October November 2023

Sub-Account on a day-to-day basis. However, an FCM Client’s FCM Client 

Sub-Account is permitted to maintain Excess Margin on an intraday basis. Any 

Excess Margin attributable to an FCM Client Sub-Account of an FCM Client 

that exists in such sub-account following the time, as determined by the Clearing 

House, on a Business Day shall be transferred by the Clearing House into the 

corresponding Unallocated Excess Sub-Account on the morning of the 

following Business Day (and as such, such Excess Margin shall become 

Unallocated Excess); provided, that all sums due from the relevant FCM 

Clearing Member at such time in respect of the applicable FCM Omnibus Swaps 

Client Account with LCH have been paid to the Clearing House. If at any time 

an FCM Clearing Member furnishes Margin to the Clearing House on behalf of 

an FCM Client in an amount which would cause such FCM Client’s FCM Client 

Sub-Account to contain Excess Margin, the Clearing House shall be permitted 

to reject the deposit of any such Excess Margin or to immediately transfer any 

such Excess Margin back to the FCM Clearing Member.

(ii) Application of FCM Buffer.

(A) The Clearing House shall be permitted to apply any portion of an FCM 

Clearing Member’s FCM Buffer (any portion of FCM Buffer when 

applied, “Encumbered FCM Buffer”) to any FCM Client Sub-Account 

held by such FCM Clearing Member in the same FCM Omnibus Swaps 

Client Account with LCH (in which such FCM Buffer is held) which is 

in or would become in default.

(B) At no time shall the Clearing House apply FCM Buffer in an amount 

that, in respect of an FCM Client, would cause the sum of the FCM 

Client’s FCM Client Sub-Account Balance and the Encumbered FCM 

Buffer applicable to such FCM Client’s FCM Client Sub-Account at 

such time (if any) to exceed the amount of Required Margin applicable 

to such FCM Client Sub-Account. In the event that any such excess 

exists (e.g., due to a decrease in Required Margin, the crediting of 

additional Margin attributable to such FCM Client, or other reasons) 

with respect to an FCM Client Sub-Account, the Clearing House shall 

reduce the amount of Encumbered FCM Buffer applicable to such FCM 

Client in an amount sufficient to remove any such excess, and any such 

reduced portion of Encumbered FCM Buffer shall again constitute only 

FCM Buffer (and shall no longer be considered Encumbered FCM 

Buffer).

(C) Other than any Encumbered FCM Buffer applied to an FCM SwapClear 

Suspension Account or recorded to the Excess Account, any 

Encumbered FCM Buffer that is applied to an FCM Client Sub-Account 

on a Business Day and remains applied to such sub-account at the 

opening of the relevant FCM Clearing Service on the following Business 

Day (as necessary to satisfy the applicable Required Margin) shall, at 

such time, be deemed to become part of such FCM Client’s FCM Client 

Sub-Account Balance and shall thereafter no longer constitute 

Encumbered FCM Buffer or FCM Buffer.
FCM Regulations

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October November 2023

(D) An FCM Clearing Member that is not a Defaulter may request the return 

of any of its FCM Buffer that is not Encumbered FCM Buffer at any 

time in accordance with the FCM Procedures, and upon such request the 

Clearing House shall return such FCM Buffer.

(E) In the event that an FCM Clearing Member furnishes Collateral to be 

applied to its FCM Omnibus Swaps Client Account with LCH but does 

not notify the Clearing House as to whether the Margin in respect of 

such Collateral should be considered Unallocated FCM Collateral or 

FCM Buffer, and has not notified the Clearing House that the collateral 

is attributable to individual FCM Clients, the Clearing House shall treat 

such Margin as furnished as FCM Buffer and credit it to the FCM 

Clearing Member’s FCM Buffer Sub-Account.

(iii) Unallocated Excess.

(A) An FCM Clearing Member is permitted to furnish Collateral on behalf 

of its FCM Clients to be applied as Margin directly to the relevant 

Unallocated Excess Sub-Account, upon its instruction and with the prior 

written approval of the Clearing House in accordance with, and subject 

to, the FCM Procedures, and the relevant Margin so furnished shall 

become Unallocated Excess.

(B) An FCM Clearing Member may provide an instruction (provided in 

accordance with the FCM Rulebook) to the Clearing House directing it 

to apply all or a portion of its Unallocated Excess to an FCM Client SubAccount within the corresponding FCM Omnibus Swaps Client 

Account with LCH.

(d) With Client Excess Model. The provisions of this FCM Regulation 15(d) describe 

certain components of the Clearing House’s model for margining, in accordance with 

Part 22 of the CFTC Regulations, FCM Omnibus Swaps Client Accounts with LCH in 

a manner which provides for the maintenance of Excess Margin in FCM Client SubAccounts on a day-to-day basis (such model is referred to in the FCM Rulebook as the 

“With Client Excess Model”). FCM Clearing Members may, to the extent provided 

in the FCM Procedures, apply for the Clearing House’s approval to have one or more 

of its FCM Omnibus Swaps Client Accounts with LCH treated in accordance with the 

With Client Excess Model. Any FCM Omnibus Swaps Client Account with LCH for 

which no such approval of the Clearing House has been obtained shall be margined in 

accordance with the Without Client Excess Model (described in FCM Regulation 

15(c)).

The provisions of this FCM Regulation 15(d) apply only to FCM Omnibus Swaps 

Client Accounts with LCH that are subject to the With Client Excess Model.

(i) Excess Margin in FCM Client Sub-Accounts. An FCM Clearing Member is 

permitted to maintain Excess Margin with the Clearing House in respect of its 

FCM Client Sub-Accounts, in accordance with the provisions of the FCM 

Rulebook.
FCM Regulations

- 93 -

October November 2023

(ii) Collateral Value Reports (CVRs). For each FCM Omnibus Swaps Client 

Account with LCH maintained by an FCM Clearing Member treated in 

accordance with the With Client Excess Model, an FCM Clearing Member shall 

provide to the Clearing House, at least once on each Business Day, a “Collateral 

Value Report” (a “CVR” or “Collateral Value Report”) that is compliant (as 

determined by the Clearing House in accordance with the FCM Procedures) and 

that instructs the Clearing House as to the appropriate allocation of the Omnibus 

Collateral Value attributable to each such FCM Omnibus Swaps Client 

Accounts with LCH among (A) each FCM Client Sub-Account therein and (B) 

the FCM Buffer Sub-Account therein. FCM Clearing Members are required to 

produce and submit CVRs in accordance with Part 22 of the CFTC Regulations 

and any other Applicable Law, and such CVRs must be compliant with the 

Clearing House’s policies regarding CVRs as set forth in the FCM Procedures 

and as may be set forth, from time to time, in other written materials of the 

Clearing House made available to FCM Clearing Members. Each FCM 

Clearing Member shall be fully responsible for all information contained in its 

CVRs and the Clearing House shall be entitled to rely fully on such information 

and has no obligation to conduct its own investigation (although it may do so) 

with respect to such information. The Clearing House shall update its applicable 

records in accordance with the most recently submitted compliant CVR 

corresponding to an FCM Omnibus Swaps Client Account with LCH, and the 

most recent compliant CVR with respect thereto shall supersede any prior 

CVRs. A CVR will not be compliant if (A) its allocation of the Omnibus 

Collateral Value would trigger a margin call, or (B) it allocates Collateral that 

is not FCM Buffer to the Excess Account. Additionally, a CVR may not be 

used to satisfy a margin call and a CVR that reallocates the Omnibus Collateral 

Value so as to satisfy a margin call shall not be compliant.

(iii) Assumed Allocation. When an FCM Clearing Member furnishes Margin to an 

FCM Omnibus Swaps Client Account with LCH for the purposes of satisfying 

a margin call issued by the Clearing House, such Margin shall be automatically 

allocated (such allocation, the “Assumed Allocation”) by the Clearing House 

(A) among each of the FCM Client Sub-Accounts therein having at such time 

an FCM Client Sub-Account Balance shortfall (in respect of the amount of 

Required Margin then applicable to each such sub-account) and (B) such 

allocation shall be made on a pro rata basis based on the amount of shortfall in 

each such sub-account. An FCM Clearing Member is not permitted to deliver 

a CVR simultaneously with its deposit of Collateral in satisfaction of a margin 

call so as to avoid the Assumed Allocation. However, an FCM Clearing 

Member may subsequently deliver a CVR allocating the entire Omnibus 

Collateral Value in the applicable account and any prior Assumed Allocation 

shall not limit the ability of subsequently delivered CVRs to allocate the 

Omnibus Collateral Value in the normal manner as provided in the FCM 

Rulebook.

(iv) Application of FCM Buffer. The Clearing House will look to FCM Buffer to 

offset any FCM Client Sub-Account Balance deficits (on an aggregate basis) in 

the corresponding FCM Omnibus Swaps Client Account with LCH, and will 

not issue a margin call to an FCM Clearing Member in respect of the amounts 

of any such deficits to the extent such amounts could be offset by FCM Buffer. 
FCM Regulations

- 94 -

October November 2023

An FCM Clearing Member that is not a Defaulter may request the return of any 

of its FCM Buffer that is not, at such time, being used by the Clearing House in 

such manner to offset any such FCM Client Sub-Account Balance deficits.

(v) Unallocated Excess.

(A) An FCM Clearing Member is permitted to furnish Collateral on behalf 

of its FCM Clients to be applied as Margin directly to the relevant 

Unallocated Excess Sub-Account as set forth in the FCM Procedures. 

Any Margin furnished by an FCM Clearing Member in respect of an 

FCM Omnibus Swaps Client Account with LCH that is (1) not furnished 

in satisfaction of an outstanding margin call and (2) not accompanied by 

a new and compliant CVR, shall be automatically deemed to be 

furnished as Unallocated Excess and shall be credited to the applicable 

Unallocated Excess Sub-Account.

(B) An FCM Clearing Member may deliver a CVR to the Clearing House 

which has the effect of allocating all or a portion of the applicable 

Unallocated Excess into FCM Client Sub-Accounts and/or the FCM 

Buffer Sub-Account in the same FCM Omnibus Swaps Client Account 

with LCH; provided, that such a CVR delivery may not be used for 

purposes of allocating Unallocated Excess in order to satisfy a margin 

call.

(e) Required Margin Increase in an FCM Client Sub-Account Subject to the Without 

Client Excess Model. If the Required Margin applicable to the FCM Contracts 

registered to an FCM Client’s FCM Client Sub-Account subject to the Without Client 

Excess Model is increased by the Clearing House and such increase cannot be 

immediately satisfied by Excess Margin in the corresponding FCM Client Sub-Account 

Balance, the FCM Client Sub-Account Balance shortfall will be satisfied in whole or 

in part (as applicable) by (x) the application of any Available FCM Buffer (i.e., FCM 

Buffer that is not Encumbered FCM Buffer and that is credited to the FCM Buffer SubAccount within the applicable FCM Omnibus Swaps Client Account with LCH) and 

(y) any credit extended by the Clearing House (in the Clearing House’s sole discretion), 

including any SwapClear Tolerance or ForexClear Tolerance, as applicable.

If the FCM Client Sub-Account Balance shortfall referred to above cannot be fully 

satisfied with Available FCM Buffer and/or Clearing House credit as set forth above, 

the obligation of the FCM Clearing Member to satisfy such deficit shall be discharged 

by:

(i) the applicable FCM Clearing Member furnishing additional Margin to the 

Clearing House on behalf of the applicable FCM Client; or

(ii) if the obligation of the FCM Clearing Member to satisfy the FCM Client SubAccount Balance deficit has not been fully discharged pursuant to clause (i) 

above, by other means (if any) available to the Clearing House in accordance 

with the FCM Rulebook.

(f) Required Margin Increase in an FCM Client Sub-Account Subject to the With 

Client Excess Model. If the Required Margin applicable to the FCM Contracts 
 

LCH | 10 Paternoster Square | London EC4M 7LS | T: +44 (0)20 7426 7000 | F: +44 (0)20 7426 7001 | lch.com

LCH Group Holdings Limited | LCH Limited | Banque Centrale de Compensation | LCH.Clearnet LLC

LCH Group Holdings Limited. Registered in England No. 4743602 Registered Office: 10 Paternoster Square, London, EC4M 7LS

RESTRICTED - EXTERNAL

Appendix II

FCM Procedures – E Account
CORPORATE

FCM PROCEDURES OF THE CLEARING HOUSE

LCH LIMITED
FCM Procedures FCM SwapClear

LCH Limited © 2023 - 30 - October November 2023

CORPORATE

SwapClear Contract positions are also recorded within the FCM 

SwapClear clearing system in SwapClear accounts.

All registered FCM SwapClear Contracts will be identifiable to FCM 

Clearing Members and FCM Clients, as applicable, via SwapClear 

FCM Clearing Member Reporting (see Section 2.1.1(c)). All 

registered FCM SwapClear Contracts will be maintained only in 

SwapClear accounts (identified as such by a unique three letter 

mnemonic). Each FCM SwapClear Contract will also be assigned a 

unique trade identifier by the Clearing House. The SwapClear FCM 

Clearing Member Reporting functionality also allows each FCM

Clearing Member and FCM Client to identify all FCM SwapClear 

Contracts registered in its name.

At the request of an FCM Clearing Member or FCM Client, as 

applicable, the Clearing House may permit the FCM Clearing Member 

or FCM Client, as applicable and/or its respective agent or designee 

(that has previously been approved by the Clearing House for such 

purpose) to assign or amend a trade identifier to an FCM SwapClear 

Contract in its accounts, provided that no such assignment or 

amendment shall in any way affect the Clearing House trade identifiers 

in respect of each such FCM SwapClear Contract. By making such 

request, such FCM Clearing Member, either on its own behalf or on 

behalf of an FCM Client acknowledges that the Clearing House shall 

have no liability for any direct or indirect consequence of the use or 

assignment of such additional trade identifiers.

Any request for the Clearing House to approve an agent or designee for 

the purposes of this Section 2.1.5 must be made in writing and using 

the Clearing House’s standard documentation. Through making a 

request, an FCM Clearing Member, either on its own behalf or on 

behalf of an FCM Client, is deemed to represent and warrant that the 

individual making the request is appropriately authorized to do so.

Notwithstanding anything in this Section 2.1.5 of the FCM Procedures, 

the Clearing House trade identifiers and records in relation to FCM 

SwapClear Contracts shall be the definitive version for all purposes 

involving the Clearing House or any service or product offered by it, 

and shall prevail over any versions otherwise maintained by or on 

behalf of any FCM Clearing Member.

2.1.6 Other Accounts

The Clearing House will open operational accounts, in respect of an FCM 

Clearing Member, which are used to record cash and securities balances and 

its SwapClear Contributions. The Clearing House may open and close such 

operational accounts, in its sole discretion, upon notice to the relevant FCM 

Clearing Member. FCM SwapClear Operations will provide details of such 

accounts to an FCM Clearing Member upon request.

2.1.7 Excess Account
FCM Procedures FCM SwapClear

LCH Limited © 2023 - 31 - October November 2023

CORPORATE

The Clearing House may, upon the request of an FCM Clearing Member, 

open an excess account for such FCM Clearing Member (“Excess Account”). 

The Excess Account is a sub-account of the C account and is a Cleared 

Swaps Customer Account as defined in Part 22 of the CFTC Regulations. An 

FCM Clearing Member may only deliver FCM Buffer to its Excess Account. 

The Clearing House account code for the Excess Account is “E”. 

2.1.72.1.8 FCM SwapClear Contract Valuation

(a) Net Present Value

The Clearing House will calculate the Net Present Value (NPV) of 

each eligible FCM SwapClear Contract using the Clearing House's 

zero coupon yield curves.

It is a condition of registration that sufficient Margin and other 

Required Registration Amounts, as determined by the Clearing House, 

are furnished to the Clearing House to cover the Clearing House’s 

Margin requirement for each FCM SwapClear Transaction (taking into

account, for these purposes, SwapClear Tolerance, if any) and other 

amounts required by the Clearing House to register the FCM 

SwapClear Contract, except that such Required Registration Amounts

shall not be required to be furnished prior to registration as a condition 

thereto if such FCM SwapClear Transaction is a Sub-Block Trading 

Venue Transaction.

All FCM SwapClear Contracts credited to an FCM Clearing Member 

will, on submission to the Clearing House, be marked-to-market, in 

accordance with FCM Regulation 47 (Daily Settlement of FCM 

SwapClear Contract and FCM ForexClear Contracts). Except as 

expressly provided herein, the amount of Variation Settlement

determined to be owing pursuant to FCM Regulation 47 must, subject 

to Intra-day Registration (see Section 2.1.3(e)) and the netting 

provisions of FCM Regulation 47), be paid by the FCM Clearing 

Member or the Clearing House, as applicable, in cash in the currency 

of the FCM SwapClear Contract. Where an FCM SwapClear 

Transaction is registered intra-day, and the change in net present value

is covered with non-cash Collateral, the Clearing House will, the 

following Business Day, require payment of the full cash amount of 

Variation Settlement, subject to the netting provisions of FCM 

Regulation 47.

(b) Zero Coupon Yield Curve Construction

The Clearing House will determine, at its sole discretion, appropriate 

instruments, points and market prices for the construction of zero 

coupon curves and portfolio valuation. Details of the construction 

method and Instruments used are available on request from the 

Clearing House Risk Management Department at +44 (0)20 7426 

7549, but may be subject to change without prior notification.
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(c) Official Quotations

Zero Coupon Yield curves will use prices and rates taken at:

All times quoted, are London time.

AUD

BBSW & OIS 12:00

BRL 8:20, 13:15 and 19:05

CAD 20:00

CHF LIBOR & OIS 16:15

CLP 8:20, 13:15 and 19:05

CNY 8:20, 13:15 and 19:05

COP 8:20, 13:15 and 19:05

CZK 16:15

DKK 16:15

EURO

EURIBOR 16:15

GBP

LIBOR 16:15

HKD 12:00

HUF 16:15

INR 8:20, 13:15 and 19:05

JPY

LIBOR & OIS 12:00

KRW 8:20, 13:15 and 19:05

MXN 20:00

NOK 16:15

NKD 12:00
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PLN 16:15

SEK 16:15

SGD 12:00

THB 8:20, 13:15 and 19:05

TWD 8:20, 13:15 and 19:05

USD

LIBOR, SOFR & OIS 20:00

ZAR 16:15

EURO

OIS 18:15

GBP

OIS 17:15

Zero coupon yield curves used for daily marking to market will be 

published on the Clearing House's member reporting website at 

intervals during the day as determined by the Clearing House.

(d) Variation Settlement

On the date of registration, the Net Present Value of an FCM 

SwapClear Contract will be calculated in accordance with Section 

2.1.7(a).

On all subsequent days, the change in the Net Present Value from one 

Business Day to the next will be calculated by the Clearing House.

Separate Variation Settlement calculations are performed in respect of 

an FCM Clearing Member's house “H” account and in respect of an 

FCM Clearing Member's client “C” account. No offset between the

“C” and the “H” accounts is permitted. The Clearing House shall 

make or receive a separate Variation Settlement payment in respect of 

each house “H” account and each client “C” account (subject to the 

netting provisions of FCM Regulation 47 and the Default Rules) of 

each FCM Clearing Member.

(e) Price Alignment Amount

The payment of Variation Settlement by the applicable party on a daily 

basis would, without adjustment, distort the pricing for certain FCM 

SwapClear Transactions cleared through the Clearing House. In order 
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to minimise the impact of such Variation Settlement payments, the 

Clearing House will, for an FCM Clearing Member, either (i) charge a 

Price Alignment Amount if that FCM Clearing Member has, on a 

cumulative net basis, received Variation Settlement from the Clearing 

House, or (ii) pay a Price Alignment Amount if that FCM Clearing 

Member has, on a cumulative net basis, paid Variation Settlement to 

the Clearing House. In a negative interest rate environment where the 

applicable Price Alignment Amount rate is negative, the Clearing 

House will, for an FCM Clearing Member, either (i) pay a Price 

Alignment Amount if that FCM Clearing Member has, on a cumulative 

net basis, received Variation Settlement from the Clearing House, or 

(ii) charge a Price Alignment Amount if that FCM Clearing Member 

has, on a cumulative net basis, paid Variation Settlement to the 

Clearing House.

(f) Non-deliverable Interest Rate Swaps

The Clearing House will calculate variation margin, NPV Payments

and Price Alignment Amounts in relation to FCM SwapClear 

Contracts that are non-deliverable interest rate swaps in USD, and all 

amounts due or payable under such FCM SwapClear Contracts must be 

paid in USD.

2.1.82.1.9 Coupon Payments

(a) Calendars and Coupons

Payment dates for coupon payments will be set based on the 

SwapsMonitor Financial Calendar (see Section 2.1.2(c)). Changes to 

the calendar that affect FCM SwapClear Contracts will be published 

and made available to FCM Clearing Members by the Clearing House

in an FCM Clearing Member Report. The central control and

publication of these calendars will assist the reconciliation of coupon 

payments between FCM Clearing Members and the Clearing House. 

Coupon payments will be adjusted, in the event of a holiday 

amendment, in accordance with the FCM SwapClear Contract Terms.

Notwithstanding the foregoing, with respect to FCM SwapClear 

Contracts denominated in Israeli Shekel, the Clearing House will not 

recognize Sunday as a Business Day.

(b) Calculation of Fixed Amount

The Clearing House will calculate the Fixed Amount payable by a 

party on a Payment Date as either:

(i) if an amount is specified for the FCM SwapClear Contract as 

the Fixed Amount payable by that party for that Payment Date 

or for the related Calculation Period, such amount; or
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(ii) if an amount is not specified for the FCM SwapClear Contract 

as the Fixed Amount payable by that party for that Payment 

Date or for the related Calculation Period, an amount calculated 

on a formula basis for that Payment date or for the related 

Calculation Period as follows and in accordance with the ISDA 

Definitions:

Fixed Amount = Calculation Amount x Fixed Rate x Fixed 

Rate Day Count Fraction

(c) Calculation of Floating Amount

Subject to (e) below, the Clearing House will calculate the Floating 

Amount payable by a party on a Payment Date as an amount calculated 

on a formula basis for that Payment Date or for the related Calculation 

Period as follows and in accordance with the ISDA Definitions:

Floating Amount = Calculation Amount x Floating Rate (+/- Spread) x 

Fixed Rate Day Count Fraction 

(d) Calculation of Compounding Floating Amounts

If applicable, the Clearing House will calculate the compounding 

floating amount payable in respect of an FCM SwapClear Contract on 

a Payment Date as an amount calculated in accordance with Sections 

6.2.2, 6.2.3 or 6.2.4 of the ISDA Definitions (as applicable).

(e) Calculation of FRA Discounting (Article 4.7 of the ISDA Definitions)

Where FRA Discounting is specified for CAD, CHF, CZK, DKK,

EUR, HUF, JPY, NOK, PLN, SEK, USD or ZAR, the FRA Amount 

will be calculated in accordance with formulae in the ISDA 

Definitions.

(f) Business Day and Business Day Convention

In determining whether a day is a Business Day, the Clearing House 

will apply the Financial Centers specified in the matched FCM 

SwapClear Transaction message, except that, with respect to FCM 

SwapClear Contracts denominated in Israeli Shekel, the Clearing 

House will not recognize Sunday as a Business Day. 

The Clearing House will, in the event of non-Business Days, apply the 

Business Day Conventions in accordance with, and as specified in, the 

matched FCM SwapClear Transaction message, except that, with 

respect to the effective date of an FCM SwapClear Contract, the 

Clearing House will adjust such effective date as specified under 

Section 3.9 of the FCM SwapClear Contract Terms.

(g) Payment of Coupons
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After adjustment in accordance with the applicable Business Day

Conventions, the Clearing House will, subject to the netting provisions 

of FCM Regulation 47, credit or debit FCM Clearing Members' 

accounts with the appropriate Fixed Amount or Floating Amount with 

a value date matching the related Payment Date. In the event of 

SwapClear being closed on a Payment Date, it will pay the Fixed 

Amounts and Floating Amounts on the next Business Day following 

such Payment Date.

(h) Calculation Periods

In respect of any Calculation Period that is a not a whole calendar 

month (a stub period), the applicable rate for the Reset Date in respect 

of that Calculation Period shall be determined by the Clearing House 

with reference to the rate(s) specified in the matched format message.

(i) Day Count Fraction

Day count fractions will be applied to deal legs of an FCM SwapClear 

Contract independently, as they are communicated via the matched 

format message of the FCM SwapClear Transaction corresponding to 

such FCM SwapClear Contract and the Clearing House will determine 

and apply such day count fractions in accordance with the ISDA 

Definitions.

(j) Floating Rate

Subject always to the terms of any applicable Floating Rate 

Conversion Annex and Floating Rate Conversion Notice(s), the

Floating Rate Options shall have the meanings given to them in the 

ISDA Definitions, provided that where the rate for a Reset Date (i) is 

unavailable (including where such rate ceases, or will cease, to be 

provided by its administrators), (ii) is not sufficiently robust, (iii) is not 

fit for purpose or (iv) has materially changed, in each case as 

determined by the Clearing House in its sole discretion, the Clearing

House will determine an alternative rate at its sole discretion. Each

such rate will be provided in regular reports by the Clearing House to

members.

(k) Applying Floating Rate Options

The Clearing House will determine the rate applicable on a Reset Date

in respect of a SwapClear Contract as set out in paragraph (l) above. 

Such Rate will be applied to the appropriate floating legs and the 

coupon payments calculated.

The coupon payments will be adjusted to fall on actual Business Days 

according to the Business Day Convention specified.

(l) Negative Interest Rate Method
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FCM Clearing Member should note the provisions of Section 3.2 of 

Part A of Schedule 1 to the FCM Product Specific Contract Terms and 

Eligibility Criteria Manual regarding the applicability of the Negative 

Interest Rate Method to an FCM SwapClear Contract. FCM Clearing 

Members may, in the circumstances, wish to ensure that any trade 

submitted for registration follows that Negative interest Rate Method.

(m) Calculation of Inflation Indices

The Index level used for calculating the Floating Rate for an Inflation 

FCM SwapClear Contract is determined according to the 2008 ISDA 

Inflation Definitions in respect of the Index applicable to such Inflation 

FCM SwapClear Contract. 

In the event an Index is no available to calculate the Index Final, the 

Clearing House will, in its sole discretion, determine a value for the 

Index Final.

(n) Non-deliverable Interest Rate Swaps

The Clearing House will calculate all coupon payments for FCM

SwapClear Contracts that are non-deliverable interest rate swaps,

including the Fixed Amount or Floating Amount payable under any

such FCM SwapClear Contract, in USD, and all amounts due or

payable under such FCM SwapClear Contracts must be paid in USD.

2.1.92.1.10 Initial Margin

The Clearing House will require FCM Clearing Members to furnish it with 

Initial Margin. This amount will be determined by the prevailing market 

conditions and the expected time to close out the portfolio. The Portfolio 

Approach to Interest Rate Scenarios (PAIRS) will be used to calculate Initial 

Margin requirements for FCM SwapClear Contracts.

Separate Initial Margin calculations are performed for an FCM Clearing 

Member's house “H” and client “C” accounts and, within a “C” account, 

separately in respect of each FCM Client Sub-Account therein. No offset 

between the “C” and “H” accounts is permitted.

The Clearing House reserves the right to require additional amounts of Margin

from a specific FCM Clearing Member or from all FCM Clearing Members in 

accordance with FCM Regulation 14 (Margin and Collateral).

(a) Liquidity Multiplier

Risk Management applies a liquidity multiplier based on Worst Case 

Loss (WCL) exceeding certain thresholds on the FCM Clearing 

Member's whole portfolio and individual currencies. The threshold 

amounts and multipliers are reviewed on an on-going basis. FCM 

Client accounts are treated as independent accounts for purposes of

liquidity and will be called only in the event that the individual account 

exceeds the relevant threshold.
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(b) Intra-day Margin Calls

In accordance with the Clearing House's FCM Regulations, the 

Clearing House is entitled to make additional margin calls for payment 

the same day (intra-day margin calls) where it is considered necessary. 

Intra-day margin calls can be made at any time throughout the 

Business Day. Intra-day margin calls will usually be made via the 

protected payments system (see Section 2.1.11).

In certain circumstances, the Clearing House may wish to make a call 

for additional funds after the UK PPS cut-off time of 08:00 New York 

time. In this event, the Clearing House will require payment of 

additional funds through PPS facilities in the USA (see Section 3.2.1). 

Members must ensure, in these circumstances, that they are in a 

position to fund such calls through their nominated US PPS account 

within one hour of the call.

(c) Calculation of Initial Margin

Portfolio Approach to Interest Rate Scenarios (PAIRS)

The PAIRS calculation is a VAR based approach based on filtered 

historical simulations. All positions in each currency are re-valued 

under a series of cross portfolio yield curve scenarios to estimate the 

highest forecast loss and therefore the Initial Margin requirement. 

Further details of this method are available upon request and are 

detailed in the PAIRS TIP document. The PAIRS document and 

further information relating to Initial Margin calculations can be 

obtained from the Rates team at +44 (020) 7426 6325 or +44 (020) 

7426 7428.

(d) Tenor Basis Risk Margin Add-on

A margin add-on will be applied in respect of tenor basis risk.

(e) Default Fund Additional Margin

The Clearing House may from time to time require an FCM Clearing 

Member to transfer Collateral to the Clearing House to meet the 

default fund additional margin requirement as determined and notified 

by the Clearing House to such FCM Clearing Member (“DFAM”). 

The methodology by which the Clearing House determines DFAM is 

available on the secure area of the Clearing House website. The 

Clearing House will record any Collateral an FCM Clearing Member 

has provided to meet its DFAM obligation to the FCM Clearing 

Member’s Proprietary Account.

(f) Collateral for Stress Loss Exposure

In response to a request from an FCM Clearing Member, the Clearing 

House may require additional Collateral to cover such FCM Clearing 

Member’s stress loss exposure with respect to an FCM Client Sub-
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Account (the “Stress Loss Margin”). The Stress Loss Margin may be 

subject to an additional percentage add-on as the Clearing House may 

require in its sole discretion. The Stress Loss Margin and any add-ons, 

as applicable, will be called as part of the end of day margin run and by 

means of morning PPS calls. The request must indicate the percentage 

of the stress loss exposure that will be covered by Stress Loss Margin. 

Any request pursuant to this paragraph is subject to the Clearing 

House’s consent in its sole discretion (and the Clearing house may 

apply a lower percentage than that requested by the SwapClear 

Clearing Member).

An FCM Clearing Member may cease paying Stress Loss Margin by 

giving not less than three (3) business days’ written notice to the 

Clearing House.

Before making any request to pay or notifying the Clearing House of 

ceasing to pay Stress Loss Margin, an FCM Clearing Member must 

obtain the consent of the FCM Client to which the Stress Loss Margin 

applies. In making any request pursuant to this paragraph, the FCM 

Clearing Member is deemed to represent that it has obtained such 

consent.

Where FCM SwapClear Contracts entered into by an FCM Clearing 

Member in respect of an FCM Client which has requested to pay Stress 

Loss Margin are transferred to a Receiving Clearing Member, such 

Receiving Clearing Member may be required to pay additional initial 

margin to the Clearing House in the event that it does not pay Stress 

Loss Margin with respect to the transferring FCM Client.

2.1.102.1.11 Intra-Day Margin Call: Collateral Management

General – Intra-day Margining

Following an intra-day margin call and unless notified otherwise by an 

FCM Clearing Member at the time of an intra-day margin call the 

Clearing House will deduct cash, in the appropriate currency, directly 

from the relevant FCM Clearing Member's PPS account to cover the 

Margin needed to meet that intra-day margin call.

Cash payments in respect of intra-day Margin requirements are 

accepted only in USD by the Clearing House.

It is the responsibility of the FCM to ensure that they have sufficient 

cash funds in place with their PPS bank(s) in order to avoid any intraday liquidity issues.

2.1.112.1.12 Compression

(a) An FCM Clearing Member may compress or decompress Eligible 

FCM SwapClear Compression Contracts in accordance with FCM 

Regulation 46(n) and this Section 2.1.12. FCM Clearing Members
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may request the compression or decompression of Eligible FCM 

SwapClear Compression Contracts as follows:

(i) an FCM Clearing Member can request that all Eligible FCM 

SwapClear Compression Contracts entered into (i) on behalf of 

a designated FCM Client or (ii) in such FCM Clearing 

Member's Proprietary Account be considered for compression 

by the Clearing House. Such a request shall be reconsidered by 

the Clearing House automatically each day (and the results 

notified to the FCM Clearing Member after the applicable 

scheduled compression run) until the FCM Clearing Member 

notifies the Clearing House to discontinue the compression of 

Eligible FCM SwapClear Compression Contracts.; 

(ii) an FCM Clearing Member may notify the Clearing House 

through the ClearLink API or SwapClear Portal specifying the 

Eligible FCM SwapClear Compression Contracts it wishes to

be compressed;

(iii) an FCM Clearing Member may notify the Clearing House 

through any FCM Approved Trade Source System previously 

approved for this purpose by the Clearing House, but only 

where the compression is by way of netting in respect of

Eligible FCM SwapClear Compression Contracts in respect of 

which the position of the FCM Clearing Member (on its own 

behalf or on behalf of the relevant FCM Client) is (x) in the 

opposite direction on each leg of such pair (i.e., obligations to 

make payment netted against rights to receive payment), such 

that the FCM SwapClear Contract that replaces such pair of 

Eligible FCM SwapClear Compression Contracts to be 

compressed shall have a notional amount equal to the net 

notional amount of the original pair of Eligible FCM 

SwapClear Compression Contracts or (y) in the same direction 

on each leg of such pair (i.e., obligations to make payment

aggregated and rights to receive payment aggregated), such that 

the FCM SwapClear Contract that replaces the compressed 

Eligible FCM SwapClear Compression Contracts shall have a 

notional amount equal to the total notional amount of the 

original pair of Eligible FCM SwapClear Compression 

Contracts. The FCM Clearing Member will be notified after 

the applicable scheduled compression run whether compression

has occurred and the Clearing House will not automatically 

reconsider such compression request on subsequent days 

regardless of whether compression has occurred; or

(iv) an FCM Clearing Member may request that certain Eligible 

FCM SwapClear Compression Contracts be decompressed in 

the manner and form as determined by the Clearing House from 

time to time (such requests may be subject to the Clearing 

House’s capacity constraints).
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Any request for the Clearing House to approve an FCM Approved 

Trade Source System for the purposes of this Section 2.1.11(a) must be 

made in writing and using the Clearing House’s standard 

documentation. Through making a request, an FCM Clearing Member 

is deemed to represent and warrant that the individual making the 

request is appropriately authorized to do so.

(b) In order to compress Eligible FCM SwapClear Compression 

Contracts, an FCM Clearing Member must have in its applicable 

FCM Client Sub-Account or Proprietary Account two or more FCM 

SwapClear Contracts with the same compression identifier (being an 

identifier applied by the Clearing House that indicates that such 

FCM SwapClear Contracts are eligible for compression) and shall 

then follow the process for compression as set out above. By 

making a request to compress or decompress Eligible FCM 

SwapClear Compression Contracts, the relevant FCM Clearing 

Member shall be deemed to represent and warrant that its request is 

in compliance with Applicable Law.

(c) In respect of each compression run (which, for the purposes of this 

Section 2.1.11, shall include the time at which the Clearing House 

effects the decompression of Eligible FCM SwapClear Compression

Contracts, as applicable), the Clearing House will notify Clearing 

Members of the cut-off time by which the FCM Clearing Members 

must notify the Clearing House of the requested Eligible FCM 

SwapClear Compression Contracts to be compressed in order for 

such Eligible FCM SwapClear Compression Contracts to be 

included in the relevant compression run. The Clearing House shall 

process the compression of all Eligible FCM SwapClear 

Compression Contracts notified to it prior such cut-off time. A 

notification received after the relevant cut-off time shall be treated 

as if such notification was submitted on the following day. The 

Clearing House shall notify the applicable FCM Clearing Member 

after the relevant compression run of the result of such compression

procedure. An FCM Clearing Member may, with the prior approval 

of the Clearing House and pursuant to the Procedures, elect to 

receive such notification via any FCM Approved Trade Source 

System previously approved by the Clearing House for such 

purpose.

Any request for the Clearing House to approve an FCM Approved 

Trade Source System for the purposes of this Section 2.1.11(c) must be 

made in writing and using the Clearing House’s standard 

documentation. Through making a request, an FCM Clearing Member 

is deemed to represent and warrant that the individual making the 

request is appropriately authorized to do so.

(d) An FCM Clearing Member that elects to provide notices or reports 

to the Clearing House through any FCM Approved Trade Source 

System specifying which Eligible FCM SwapClear Compression 

Contracts should be compressed, have been compressed or any other 
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information in relation to compressions acknowledges and agrees 

that (i) the Clearing House makes no warranty (and will accept no 

liability) as to the effectiveness, efficiency, performance or any 

other aspect of the services provided by any FCM Approved Trade 

Source System or the timeliness or otherwise of the delivery of any 

compression-related details by that FCM Approved Trade Source 

System to the Clearing House of the FCM Clearing Member, (ii) the 

Clearing House will process and use any compression-related 

information provided to it via an FCM Approved Trade Source 

System on an “as is” basis (with no obligation to verify any details), 

(iii) the Clearing House accepts no liability for any error within or 

corruption of any data sent by an FCM Approved Trade Source 

System to the Clearing House or to the FCM Clearing Member or 

any delay in or failure of the transmission of such data to the 

Clearing House or the FCM Clearing Member. In the event that the 

Clearing House terminates, registers or otherwise effects an action 

in connection with a compression relating to any FCM SwapClear 

Contract on the basis of incorrect or corrupted data sent to it by an 

FCM Approved Trade Source System, the FCM Clearing Member 

concerned shall be bound by the results of such actions. Such 

matters form part of the relationship between the FCM Clearing 

Member and the relevant FCM Approved Trade Source System. 

Notwithstanding anything in this Section 2.1.11 of the FCM 

Procedures, the Clearing House records in relation to any 

compression and the status of any FCM SwapClear Contract prior to, 

during or following a compression run shall be the definitive record 

in connection therewith and shall prevail over any such records 

maintained by any FCM Approved Trade Source System.

(e) Following the compression or decompression process described 

above and as further set out in FCM Regulation 46(m) (Registration 

of FCM SwapClear Contracts; Novation and Post-Novation 

Compression; SwapClear Accounts), the applicable FCM Clearing 

Member shall promptly notify the Clearing House if it believes that 

any errors have occurred in the compression process or 

decompression process or if its books and records do not reconcile 

with those of the Clearing House in respect of the compressed or 

decompressed FCM SwapClear Contracts as notified to the FCM 

Clearing Member by the Clearing House.

For purposes of this Section 2.1.11, (i) an FCM Client may, on behalf of an

FCM Clearing Member, submit a compression request (whether under

paragraph (a) or (b) above) or an election to provide notices or reports via an

FCM Approved Trade Source System, the ClearLink API or SwapClear Portal

and (ii) for the avoidance of doubt, references to an FCM Approved Trade

Source System may include the SwapClear Portal, in each case as applicable.

2.1.122.1.13 Portfolio Transfers (BAU)
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FCM Clearing Members may, acting for their own account or for the account 

of an FCM Client, effect Permitted Transfers in accordance with the 

provisions of FCM Regulation 46(p).

2.1.132.1.14 Actions in Respect of an FCM Client Default

This Section describes certain transfers and registrations that, under certain 

conditions, can be requested by an FCM Clearing Member upon an FCM 

Client Default with respect to a Defaulting FCM Client.

The Clearing House shall have no liability in connection with any loss or cost

suffered or incurred by any FCM Clearing Member or FCM Client in

connection with any actions taken by the Clearing House pursuant to this

Section 2.1.13.

Notwithstanding anything to the contrary contained in this Section 2.1.13, the

actions described in this section are subject to Applicable Law, including the

provisions of the CEA and the CFTC Regulations.

(a) Transfers between Proprietary Accounts and FCM Client Accounts

Pursuant to FCM Regulation 13(d), the UK General Regulations and 

the UK General Procedures, an FCM Clearing Member may, following 

the occurrence of an FCM Client Default, request that the Clearing 

House transfer one or more FCM SwapClear Contracts (including 

those submitted for registration pursuant to Section 2.1.13(c)) or 

SwapClear Contracts (as the case may be): (i) from the Defaulting 

FCM Client’s FCM Client Sub-Account to its Proprietary Account or

the Proprietary Account of a SwapClear Clearing Member or an FCM 

Clearing Member; or (ii) from its Proprietary Account or the 

Proprietary Account of a SwapClear Clearing Member or FCM 

Clearing Member to the Defaulting FCM Client’s FCM Client SubAccount, provided that the following conditions precedent are met (in 

addition to any other generally applicable provisions of the FCM 

Rulebook): neither the FCM Clearing Member nor any SwapClear 

Clearing Member or FCM Clearing Member to or from which the 

SwapClear Contracts are being transferred pursuant to this Section 

2.1.13 is a Defaulter (nor would they become a Defaulter upon the

completion of the transfer).

For the avoidance of doubt, in the case of an FCM Client Default, the

Clearing House will not require that the Defaulting FCM Client

provide its consent to the requested transfer in order for the Clearing

House effect a transfer requested by the FCM Clearing Member

pursuant to Regulation 13(d)(i).

The Clearing House will typically (but shall not be required to) transfer

the relevant FCM SwapClear Contract(s) or SwapClear Contract(s)

within 24 hours of receipt of (a) the transfer request and (b) such other

documents as the Clearing House requested in accordance with the

foregoing.
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(b) Proprietary Account Position Transfers

An FCM Clearing Member may, following a transfer of open contracts

to its Proprietary Account in accordance with paragraph (a) above, and

to the extent permitted by Applicable Law (including all applicable

laws and provisions of the CEA and the CFTC Regulations), request

that the Clearing House transfer an FCM SwapClear Contract from its

Proprietary Account to the Proprietary Account of a SwapClear

Clearing Member or other FCM Clearing Member pursuant to FCM

Regulation 13(d), provided that the following condition precedent is

met (in addition to any other generally applicable provisions of the

FCM Rulebook): the transferor FCM Clearing Member is permitted

(where applicable) by its agreement(s) with the Defaulting FCM

Client, and has authority to effect, the transactions specified in the

transferor FCM Clearing Member’s request(s) to the Clearing House in

respect of such transfer.

The Clearing House will typically (but shall not be required to) transfer

the relevant FCM SwapClear Contract(s) within 24 hours of receipt of

the (a) transfer request and (b) such other documents as the Clearing

House requested in accordance with the foregoing.

(c) Registration of FCM SwapClear Contracts in Defaulting FCM Client’s 

FCM Client Sub-Account

Following the occurrence of an FCM Client Default in respect of a

Defaulting FCM Client, an FCM Clearing Member may submit FCM

SwapClear Contracts to the Clearing House for registration in such

Defaulting FCM Client’s FCM Client Sub-Account, provided that the

following condition precedent is met (in addition to any other generally

applicable provisions of the FCM Rulebook): the submission of such

FCM SwapClear Contracts is effected via such Approved Trade

Source System or other method as the Clearing House shall instruct for

such purpose, and on such terms and including such details as the

Clearing House shall require.

A request from an FCM Clearing Member to the Clearing House to carry out

any of the actions described in paragraphs (a) to (c) above, shall in every case

be deemed a representation by the FCM Clearing Member to the Clearing

House that:

(d) an FCM Client Default has occurred;

(e) the FCM Clearing Member has provided and will provide (as 

applicable) any required notices to the Defaulting FCM Client in 

respect of (A) such FCM Client Default and (B) any of the actions 

described in paragraphs (a) to (c) above;

(f) the FCM Clearing Member is permitted by its agreement(s) with the

Defaulting FCM Client and has authority to effect the transfers 

and/or registrations specified in the FCM Clearing Member’s
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requests to the Clearing House in respect of the Defaulting FCM 

Client;

(g) such transfers and/or registrations and all related instructions to the

Clearing House are in compliance with Applicable Law; and

(h) the individual making such request or submission (or issuing any

related instructions to the Clearing House) is authorized to do so on

behalf of the FCM Clearing Member.

In connection with a request from an FCM Clearing Member to the Clearing

House to carry out any of the actions described in paragraphs (a) to (c) above:

(i) the FCM Clearing Member shall provide to the Clearing House (i) 

satisfactory evidence of the occurrence of the FCM Client Default 

and (ii) all other documentation required by the Clearing House, 

which shall include an indemnity from the FCM Clearing Member 

in favour of the Clearing House, the form and manner of which shall 

be determined by the Clearing House in its sole discretion. For 

purposes of this paragraph, “satisfactory evidence” may be, to the 

extent permitted by the Clearing House in its sole discretion, the 

FCM Clearing Member’s instruction to effect the relevant transfer 

under paragraph (a) or (b) above or accept the submission under 

paragraph (c) above. For the avoidance of doubt, the Clearing House

shall be entitled to request additional evidence and/or 

documentation for legal, regulatory or risk management reasons; 

and

(j) the relevant FCM Clearing Member shall transfer (or make 

available) Required Margin into its Proprietary and/or the applicable 

FCM Client Sub-Account, taking into account that an FCM Clearing 

Member may not request the transfer of an Associated Collateral 

Balance in connection with a transfer of an FCM SwapClear 

Contract from an FCM Client Sub-Account to a Proprietary 

Account.

2.1.142.1.15 Notifications via FCM Approved Trade Source Systems

With prior approval of the Clearing House, FCM Clearing Members and 

FCM Clients may elect to submit and receive certain post-trade messages via 

any FCM Approved Trade Source System previously approved by the 

Clearing House for the results of compression procedures, Permitted 

Transfers and non-economic amendments of FCM SwapClear Contracts.

An FCM Clearing Member, either on its own behalf or on behalf of an FCM 

Client, as applicable, acknowledges and agrees, with respect to an election to 

receive messages and/or notifications under this Section 2.1.13 from the 

Clearing House via an FCM Approved Trade Source System, that (i) the 

Clearing House makes no warranty (and will accept no liability) as to the 

effectiveness, efficiency, performance or any other aspect of the services 

provided by any FCM Approved Trade Source System or the timeliness or 
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otherwise of the delivery of any notices, reports or details by that FCM 

Approved Trade Source System to the Clearing House of the FCM Clearing 

Member or FCM Client, as applicable, (ii) the Clearing House will process 

and use any information provided to it under this Section 2.1.13 via an FCM 

Approved Trade Source System on an “as is” basis (with no obligation to 

verify any details), (iii) the Clearing House accepts no liability for (A) any 

error within or corruption of any data sent by an FCM Approved Trade 

Source System to the Clearing House, the FCM Clearing Member or any 

FCM Client or (B) any delay in or failure of the transmission of such data to 

the Clearing House, the FCM Clearing Member or any FCM Client.

Any request for the Clearing House to approve the submission and receipt of 

post-trade messages via any FCM Approved Trade Source System must be 

made in writing and using the Clearing House’s standard documentation.

Through making a request, an FCM Clearing Member, either on its own 

behalf or on behalf of an or FCM Client, is deemed to represent and warrant 

that the individual making the request is appropriately authorized to do so.

2.1.152.1.16 Basis swap splitting 

From time to time an FCM Clearing Member or an FCM Client may request 

via the ClearLink API or SwapClear Portal that the Clearing House reregisters one or more of its eligible FCM SwapClear Contracts that are 

recorded in the books and records of the Clearing House as “basis swaps” 

(each, an “Original Basis Swap”) so that immediately following such reregistration by the Clearing House, the Original Basis Swap is replaced by 

the following two FCM SwapClear Contracts which, together, shall be 

economically identical to the Original Basis Swap:

(a) the first FCM SwapClear Contract shall have a “Floating Rate” (as

defined in the ISDA Definitions) equal to the first “Floating Rate” 

referenced in the Original Basis Swap, a “Fixed Rate” (as defined in the 

ISDA Definitions) determined by the Clearing House, and the "Floating 

Rate Payer" or “Floating Amount Payer” (as defined in the ISDA 

Definitions) shall be the same as the "Floating Rate Payer" or "Floating 

Amount Payer" in relation to the first "Floating Rate" under the Original 

Basis Swap; and

(b) the second FCM SwapClear Contract shall have a “Floating Rate” (as 

defined in the ISDA Definitions) equal to the second “Floating Rate” 

referenced in the Original Basis Swap, a “Fixed Rate” (as defined in the 

ISDA Definitions) equal to the “Fixed Rate” under (a) above, and the 

"Floating Rate Payer" or "Floating Amount Payer” (as defined in the 

ISDA Definitions) shall be the same as the "Floating Rate Payer" or 

"Floating Amount Payer" in relation to the second "Floating Rate" under 

the Original Basis Swap.

If the Clearing House accepts the FCM Clearing Member or FCM Client’s 

request, it shall effect the re-registration referred to above no later than the 

Business Day following the date on which the request is received, subject to 

and in accordance with such other conditions or provisions as the Clearing 
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House may from time to time provide or require generally or in relation to 

any specific request.

2.1.162.1.17 Amendment of Trade References

An FCM Clearing Member may wish to change its own trade reference 

numbers/codes by which they identify trades registered in the FCM 

SwapClear Service. Subject to any such FCM Clearing Member meeting all 

the Clearing House's requirements, including those set forth in paragraph (a)

below and under these FCM Procedures, the Clearing House will, as part of 

its service to FCM Clearing Members, amend its records in order to reflect 

any such change. Such change has no effect whatsoever on the terms of any

registered FCM SwapClear Contract or any other obligations of the FCM 

Clearing Member party to such contract.

(a) Trade Reference Amendment Request Form

FCM Clearing Members may submit a request to the Clearing House

to amend a trade reference (either on behalf of the given FCM Clearing

Member or an FCM Client) (a “Trade Amendment Request”). Trade

Amendment Requests must be submitted in the form and manner

prescribed by the Clearing House from time to time, and may be

approved by the Clearing House in its sole discretion. Upon approval

by the Clearing House, Trade Amendment Requests will typically be

processed within two Business Days. In the event the Clearing House

is unable, or determines it will be unable, to process an approved Trade

Amendment Request within two business days, it shall attempt to

notify the given FCM Clearing Member as soon as reasonably

practicable.

(b) Processing

The Clearing House shall reject a Trade Amendment Request in the 

event that:

(i) it is not made in accordance with these FCM Procedures;

(ii) any trade reference submitted in the Trade Amendment Request

does not (a) match the FCM Clearing Member's trade reference

in the Clearing House’s books and records or (b) refer to a trade

registered in the FCM SwapClear clearing system;

(iii) any trade reference submitted in the Trade Amendment Request

is not recorded by the Clearing House against the BIC code of

the FCM Clearing Member requesting the amendment; or

(iv) it determines it advisable, in its sole discretion, for risk, legal,

technical, cost or similar considerations.

Upon processing a Trade Amendment Request, the Clearing House 

will notify the given FCM Clearing Member and will produce a report

setting out details of the time and date that it has amended its records
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in accordance with the request, details of the old and new FCM

Clearing Member trade references and the status of the amendment in

respect of each trade set out in the Trade Reference Amendment

Request. All records of the Clearing House and data held in the FCM

SwapClear clearing system will then be updated overnight following

the given Business Day.

2.1.172.1.18 Default Management

(a) Portfolio Splitting:

As part of the Rates Service DMP, the Clearing House may divide an 

Auction portfolio into two or more individual Auction Portfolios. In 

circumstances where such portfolio splitting is adopted, the Clearing 

house will, in consultation with the Rates Service DMG (which, as 

defined in the Default Rules, refers to the advisory Default 

Management Group established by the Clearing House pursuant to the

terms of the Rates Service DMP Annex to the Default Rules), seek to 

create:

(i) one or more individual Sub-portfolios which have 

comparatively greater levels of risk associated with them, 

thereby isolating such Sub portfolios from those which are 

more risk neutral; and

(ii) one or more individual Sub portfolios which are more risk 

neutral.

(b) Acceptance of Bids

In deciding whether to accept a bid, the Clearing House will generally

accept the best bid in respect of any individual Auction. However, the 

Clearing House is entitled to reject a bid in the event that it considers, 

in its reasonable discretion that accepting the bid may:

(i) cause the Clearing House to breach Applicable Law by virtue 

of its being a Recognised Clearing House or a Derivatives 

Clearing Organization;

(ii) cause the Clearing House or its membership any reputational 

harm;

(iii) cause legal action or proceedings to be taken against the 

Clearing House;

(iv) endanger the Clearing House, any of its clearing members or 

the financial markets in which the Clearing House operates.

Where the Clearing House receives more than one bid from the same 

FCM Clearing Member and in respect of the same Auction the 

Clearing House is entitled to accept the last bid received by it in 

respect of that Auction. Where the Clearing House does not receive a 
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(D) If the Clearing House attributes an amount to a DMA 

under subparagraph (C)(2) above, then it will further 

attribute such amount according to the method 

specified in subparagraph (C) (treating such amount as 

an Interim Amount for the purposes of subparagraph 

(C)) until all amounts are attributed to Non-Porting 

FCM Client Sub-Accounts. 

(vi) Attribution of Auction Results

The Clearing House shall attribute the Auction Result, in

respect of the sale of an Auction Portfolio, to each Affected 

Non-Porting FCM Client Sub-Account referable to the Final 

DMA from which such Auction Portfolio was formed, pro rata 

according to the Pre-Default TMR Ratio of each such Affected 

Non-Porting FCM Client Sub-Account.

(vii) CFTC Regulations

The Clearing House shall hold the relevant Collateral in respect 

of Non-Porting FCM Client Sub-Accounts (segregated as 

belonging to each such applicable Non-Porting FCM Client 

Sub-Account in accordance with the CFTC Regulations and 

Part 22 thereof) in its applicable FCM Omnibus SwapClear

Client Account with LCH until the process described in this 

paragraph (f) has been completed. For the avoidance of doubt, 

the Clearing House may only take such actions pursuant to this 

paragraph as permitted by the FCM Rulebook, the CEA and the

CFTC Regulations or as directed by an applicable Regulatory 

Body.

(g) FCM Rates Service Default Management Disclosure Notice

Each FCM Rates Service Clearing Member must ensure that each 

FCM Client to which it offers FCM SwapClear Clearing Services is 

provided with, or is directed to a copy of, the FCM Rates Service 

Default Management Disclosure Notice, and further must provide 

confirmation, in the form and manner reasonably required by the 

Clearing House, that it has discharged this obligation in respect of each 

such FCM Client.

(h) Contact Information

Each FCM Rates Clearing Member is required to provide the Clearing 

House with contact details for those persons that the Clearing House 

should contact in the event of a Clearing Member Default. FCM Rates 

Clearing Members are required to ensure that contact details remain up 

to date and to notify the Clearing House of any changes in such details.
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2.1.182.1.19 Payment of Stamp Tax

Each FCM Clearing Member shall pay any stamp tax or duty levied or 

imposed upon it or in respect of its execution or performance of the FCM 

Clearing Membership Agreement, the FCM Default Fund Agreement, the 

FCM Regulations and the FCM Procedures (including any registration of an 

FCM SwapClear Contract) by a jurisdiction in which it is incorporated, 

organized, managed and controlled, or considered to have its seat, or in 

which a branch or office through which it is acting is located or by any other 

jurisdiction and shall indemnify the Clearing House against any stamp tax or 

duty levied or imposed upon the Clearing House or in respect of the Clearing 

House's execution or performance of the FCM Clearing Membership 

Agreement, the FCM Regulations and the FCM Procedures (including any 

registration of an FCM SwapClear Contract) by any such jurisdiction.

2.1.192.1.20 Section 696, Corporation Tax Act 2009

The FCM Clearing Member agrees that should a situation arise where HM 

Revenue and Customs (“HMRC”) raises an enquiry, or makes an 

information request, to the Clearing House regarding an FCM Transaction or 

FCM Contract that the FCM Clearing Member is submitting (or has 

submitted) to the Clearing House, and that enquiry or information request is 

in respect of the application of s696 - s697 Corporation Tax Act 2009, the 

FCM Clearing Member will use its reasonable efforts to provide such 

information and support as the Clearing House may reasonably require in 

order to respond to and effectively deal with the queries raised by HMRC.

2.1.202.1.21 Tax Forms

The Clearing House and each FCM Clearing Member shall provide to the

other party (i) any form or document specified in the given FCM Contract 

and (ii) any form, document, statement or certification (including, in the case 

of the Clearing House, an Internal Revenue Service Form W-8BEN)

reasonably requested in writing to permit the Clearing House or FCM

Clearing Member, as applicable, to make any payment under the Clearing 

House’s rules or any FCM Contract without withholding for any tax, levy or 

charge. The foregoing requirement shall not apply in the event the Clearing 

House or FCM Clearing Member is not permitted to deliver such form, 

document, statement or certification under Applicable Law (including any 

double-tax treaty).

2.1.212.1.22 Withholding Taxes

In the event an FCM Clearing Member is required under Applicable Law to

withhold an amount in respect of any tax, levy or charge from any payment

made to the Clearing House, (i) such amount payable shall be increased such

that the Clearing House receives an amount equal to that it would have

received had such withholding not been required under Applicable Law and 

(ii) the FCM Clearing Member shall provide the Clearing House the relevant 

tax certificates (or similar form) confirming the payment of such withholding.
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The Clearing House shall provide reasonable cooperation to the given FCM

Clearing Member to ensure that payments made to the Clearing House may be

made without deduction or withholding in respect of any tax, levy or charge

2.1.222.1.23 Sales Tax; Value Added Tax

All fees and other payments payable under the Clearing House’s rules are

exclusive of sales tax, purchase or turnover tax, levies, duties and their

equivalent in each jurisdiction, which, if applicable, shall be payable by FCM

Clearing Members at the applicable rate in force at the given time.

2.1.232.1.24 [Reserved.]

2.1.242.1.25 FCM Portfolio Margining Service

(a) Introduction

The Clearing House offers FCM Clients of FCM Clearing Members an 

optional service (“FCM Portfolio Margining Service”) that provides 

portfolio-margining functionality in respect of pairs of accounts that 

are held in the FCM SwapClear Clearing Service and FCM Listed 

Interest Rates Clearing Services by transferring FCM Portfolio 

Margining Eligible FCM Listed Interest Rates Contracts between 

accounts in each Service (such transferred FCM Portfolio Margining

Eligible FCM Listed Interest Rates Contracts, “FCM Portfolio 

Margined Contracts”).

A list of FCM Portfolio Margining Eligible FCM Listed Interest Rates 

Contracts is published on the Clearing House's website from time to 

time.

An FCM Joint Rates Service Clearing Member must opt-in to the FCM 

Portfolio Margining Service in accordance with the procedure set out 

in paragraph 2.1.25(b) below and meet the FCM Portfolio Margining 

Eligibility Criteria (as defined below) in order to benefit from the 

portfolio-margining functionality provided by the service. However, it 

should be noted that, regardless of whether or not an FCM Joint Rates 

Service Clearing Member opts in, the FCM SwapClear Clearing 

Service and the FCM Listed Interest Rates Clearing Services share a 

common default fund. Accordingly, the risk profile of participating in 

either one of such Services may be impacted by other FCM Clearing 

Members participating in the other such Service. In particular, the 

resources of an FCM Clearing Member that is a member of the FCM 

SwapClear Clearing Service and the FCM Listed Interest Rates

Clearing Services will be made available to cover the Clearing House’s 

losses in a different manner to those of an FCM Clearing Member that 

is only a member of one of those Services, regardless of whether that 

FCM Clearing Member opts-in to the FCM Portfolio Margining 

Service. FCM Clearing Members should therefore familiarise 

themselves with the provisions of the FCM Rulebook and the Default 

Rules.
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2.2.5 Position Accounts

(a) FCM Accounts

For identification purposes, each FCM Clearing Member is assigned a 

unique three-character mnemonic with respect to its accounts relating 

to FCM ForexClear Transactions and FCM ForexClear Contracts. An 

FCM Clearing Member's position and financial information are further 

identified by position-keeping accounts corresponding to a single 

character code: C for client business and H for house business.

(b) Position-Keeping Accounts

FCM Clearing Member Accounts:

The account types are: H for house business (Proprietary Account); 

and C for segregated client business (FCM Omnibus ForexClear Client 

Account with LCH). An FCM Clearing Member's FCM ForexClear 

Contract positions are also recorded within the FCM ForexClear 

Clearing System in ForexClear accounts.

All registered FCM ForexClear Contracts will be identifiable to FCM 

Clearing Members via ForexClear Reporting (see Section 2.2.26). All 

registered FCM ForexClear Contracts will be maintained only in 

ForexClear accounts (identified as such by a unique three letter 

mnemonic) and separate from all accounts containing FCM Contracts 

attributable to other Business Categories of FCM Contracts (provided 

that FCM Contracts attributable to any Business Categories of FCM 

Contracts and related Collateral may be physically commingled in the 

same depository accounts, subject to the requirements of the Rulebook 

to properly segregate all FCM Client assets). Each FCM ForexClear 

Contract will also be assigned a unique trade identifier. The FCM 

Clearing Member Reporting functionality also allows each FCM 

Clearing Member to identify all FCM ForexClear Contracts registered 

in its name.

Sub-accounts within the FX FCM's Proprietary Account may be set up 

(e.g., for branches). Each such sub-account will carry the unique Bank 

Identifier Code (“BIC”) (or equivalent unique identifier) of the 

relevant branch.

(c) Clients

Where an FX FCM enters into an agreement with an FCM Client in 

accordance with FCM Regulation 7(a) (FCM Client Business and 

Proprietary Account Trading), the FX FCM must submit an “FCM 

Client Static Data” form to the Clearing House's membership 

department. Positions of an FCM Client will be identifiable in 

ForexClear Reporting through that FCM Client's BIC/unique identifier.

2.2.6 Other Accounts
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The Clearing House will open operational accounts in respect of an FX FCM, 

which are used to record cash and securities balances and its ForexClear 

Contributions. The Clearing House may open and close such operational

accounts, in its sole discretion, upon notice to the relevant FX FCM

ForexClear Operations will provide details of such accounts to an FX FCM

upon request.

2.2.7 Excess Account

The Clearing House may, upon the request of an FX FCM, open an excess

account for such FX FCM (“Excess Account”). The Excess Account is a subaccount of the C account and is a Cleared Swaps Customer Account as defined 

in Part 22 of the CFTC Regulations. An FX FCM may only deliver FCM 

Buffer to its Excess Account. The Clearing House account code for the Excess 

Account is “E”. 

2.2.72.2.8 Novation and Registration

An FCM ForexClear Transaction must satisfy the FCM ForexClear Product 

Eligibility Criteria at the Registration Time. Upon an FCM ForexClear 

Transaction being submitted to the Clearing House for registration, the

Clearing House will determine whether to accept or reject the FCM 

ForexClear Transaction within the required timeframe under all Applicable 

Law. Where the Clearing House determines to accept the FCM ForexClear 

Transaction, registration shall occur immediately and the FCM ForexClear 

Transaction shall be automatically replaced by two separate FCM ForexClear 

Contracts.

Prior and as a condition to the registration of an FCM ForexClear Contract, the 

Clearing House will require the FX FCM in whose name such FCM 

ForexClear Contract is to be registered to provide and maintain sufficient 

Margin for its Liabilities (as defined in Section 2.2.19) (or its estimated 

Liabilities) (taking into account any MER Buffer and/or ForexClear 

Tolerance, if any) as a precondition to registration.

If an FX FCM has not transferred sufficient Margin for its Liabilities or 

estimated Liabilities (taking into account any MER Buffer and/or ForexClear

Tolerance, if any) at the time of the relevant Incremental Risk Check or 

Separate Risk Check (each as defined herein), as applicable, then, subject to

Section 2.2.8(b)(iii)(A) in respect of the Incremental Risk Check, such 

ForexClear Transaction will be rejected.

Once an FCM ForexClear Transaction has passed the Validation Checks (as 

defined in Section 2.2.9(a)), and the Clearing House has determined to accept 

the FCM ForexClear Transaction for registration, the Clearing House will 

send a message confirming the registration of the FCM ForexClear 

Transaction as two FCM ForexClear Contracts (or one FCM ForexClear 

Contract and one Non-FCM ForexClear Contract, as applicable), including a 

date stamp, in accordance with Section 2.2.8(a)(iii). For the purpose of the 

FCM Regulations, the time of dispatch of such message shall be the 

“Registration Time” of such FCM ForexClear Contract(s).
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The definitive report of a registered FCM ForexClear Contract will be shown 

on the “All Open Contracts” report issued by ForexClear Reporting (as 

defined in Section 2.2.26).

If the Clearing House declares an FX FCM a Defaulter, the Clearing House will 

not register any ForexClear Contracts in the name of the Defaulter (except 

pursuant to the Default Rules). FCM ForexClear Transactions in respect of 

Non-Defaulting FX FCMs will continue to be registered in accordance with, 

and subject to, the FCM Rulebook.

(a) Trade Capture

Once the FCM Approved Trade Source System receives the trade 

instructions from the FXPs which are parties to such trade, the FCM 

Approved Trade Source System matches both instructions (a “trade”). 

The FCM Approved Trade Source System validates the trade using the 

applicable FCM ForexClear Product Eligibility Criteria and will, if 

appropriate, present a single message containing the names of the 

FXPs which are parties to the trade and the terms of the trade to the 

Clearing House for registration and clearing.

The Clearing House will determine whether to accept or reject the

FCM ForexClear Transaction within the required timeframe under 

Applicable Law. In respect of an FCM ForexClear Transaction which 

is:

(i) an FCM Trading Venue Transaction, the Clearing House will 

notify the FX FCMs, the FCM Trading Venue and, if the 

originating FCM Approved Trade Source System is different to 

the FCM Trading Venue, the originating FCM Approved Trade 

Source System of the registration or rejection of the FCM 

ForexClear Transaction; or

(ii) not an FCM Trading Venue Transaction, the Clearing House 

will notify the FX FCMs (via the originating FCM Approved 

Trade Source System or ClearLink API) of registration or 

rejection of the FCM ForexClear Transaction,

in each case within the required timeframe under Applicable Law.

(b) ForexClear FCM Approved Trade Source Systems

Application for approved trade source system status shall be made in 

accordance with the policies published from time to time on the 

Clearing House's website. A list of FCM Approved Trade Source 

Systems currently approved by the Clearing House is available on the 

Clearing House's website. Where the Clearing House approves any

additional FCM Approved Trade Source System, it will notify FCM 

Clearing Members via member circular.
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FCM ForexClear Transactions presented through an FCM Approved 

Trade Source System must be in an acceptable message format, as 

prescribed by the Clearing House.

The Clearing House is not able to, and will not, verify the authorization 

of the source of any details of any FCM ForexClear Transaction 

reported to it for registration by an FCM Approved Trade Source 

System. The Clearing House shall have no liability in the event that 

any FX FCM suffers any loss through the unauthorized input of details 

into a system of an FCM Approved Trade Source System.

Notwithstanding the designation by the Clearing House of any system 

as an FCM Approved Trade Source System, the Clearing House makes 

no warranty (and will accept no liability) as to the effectiveness, 

efficiency, performance or any other aspect of the services provided by 

any FCM Approved Trade Source System or the timeliness or 

otherwise of the delivery of any FCM ForexClear Transaction details 

by that FCM Approved Trade Source System to the Clearing House. 

Such matters form part of the relationship between the FCM Clearing 

Members and that FCM Approved Trade Source System and the terms 

of such relationship may entitle the FCM Approved Trade Source 

System to suspend the ability of an FX FCM to make submissions 

from time to time.

FX FCMs must not submit instructions to the Clearing House for 

trades which will not meet the FCM ForexClear Eligibility Criteria. 

The Clearing House will process any FCM ForexClear Transaction 

reported to it by an FCM Approved Trade Source System on an “as is” 

basis, and subject to the FCM Regulations and these FCM Procedures, 

will register any such FCM ForexClear Transaction on the basis of the 

data provided to it by the FCM Approved Trade Source System and 

approved by the relevant FCM Clearing Member. The Clearing House 

has no obligation to verify that the details received, properly reflect the 

trade entered into by the relevant Executing Parties.

The Clearing House accepts no liability for any error within or 

corruption of any data sent by an FCM Approved Trade Source System

to the Clearing House or to an FCM Clearing Member or any delay in 

or failure of the transmission of such data to the Clearing House. In 

the event that the Clearing House registers any FCM ForexClear 

Contract on the basis of incorrect or corrupted data sent to it by an 

FCM Approved Trade Source System and accepted by an FCM 

Clearing Member, the FCM Clearing Member concerned shall be 

bound by the terms of such FCM ForexClear Contract, unless the FCM 

ForexClear Contract is subsequently cancelled in accordance with 

FCM Regulation 49 (Cancellation of FCM ForexClear Contracts).

FCM Clearing Members shall ensure that transaction details accepted 

for registration are accepted by appropriately authorized personnel. 

Apart from the foregoing acceptance, the Clearing House is not able to, 

and will not, verify the authorization of the source of any details of any 
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transaction reported to it for registration by any FCM Approved Trade 

Source System. The Clearing House shall have no liability in the event 

that any FCM Clearing Member suffers any loss through the

unauthorized acceptance of an FCM Notification.

2.2.82.2.9 Trade Validation and Registration

(a) Process flow description

(i) The Clearing House performs a validation check on each trade 

submitted to it for registration as two FCM ForexClear 

Contracts or as one Non-FCM ForexClear Contract and one 

FCM ForexClear Contract (as applicable) to ensure that each 

such trade meets the applicable (A) FCM ForexClear Product 

Eligibility Criteria and the Counterparty Technical Validation

Check (as defined below), (B) Incremental Risk Checks (as 

defined below) with respect to each FCM ForexClear 

Transaction, except a Sub-Block Trading Venue Transaction 

and a FCM Sub-25 NDF DTV Transaction, (C) Acceptance 

Validation Checks (as defined below), and (D) Separate Risk 

Checks (as defined below) with respect to each FCM Sub-25 

NDF DTV Transaction (collectively, the “Validation Checks”).

(ii) The Clearing House will create two trade records for an FCM 

ForexClear Transaction that passes the Validation Checks and 

is accepted for clearing by the Clearing House:

(A) one for the FCM ForexClear Contract between the 

Clearing House and the relevant FX FCM; and

(B) the other for the FCM ForexClear Contract between 

the Clearing House and the same or another relevant

FX FCM or the Non-FCM ForexClear Contract 

between the Clearing House and the relevant 

ForexClear Clearing Member (as applicable).

(iii) In respect of an FCM ForexClear Transaction which is:

(A) an FCM Trading Venue Transaction, the Clearing 

House will notify the FX FCMs, FCM Trading Venue 

and, if the originating FCM ForexClear Approved 

Trade Source System is different to the FCM Trading 

Venue, the originating FCM ForexClear Approved 

Trade Source System of registration or rejection of the 

FCM ForexClear Transaction; and

(B) not an FCM Trading Venue Transaction, the Clearing

House will notify the FX FCMs (via the originating 

FCM ForexClear Approved Trade Source System or 

ClearLink API) of registration or rejection of the FCM 

ForexClear Transaction,
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If a change is declared that affects the SwapsMonitor Financial 

Calendar that is referenced on FCM ForexClear, then a corresponding 

calendar adjustment will be made to the FCM ForexClear system, 

unless the Clearing House informs FXCCMs by notice on its website 

(at https://www.lch.com/services/forexclear, or such other web page as 

the Clearing House determines) that the relevant change will not apply 

to FCM ForexClear Contracts. 

The Clearing House may temporarily close the FCM ForexClear 

Service to process a calendar adjustment in its clearing system. FX 

FCMs will be notified in advance of the date, time and expected

duration of such closure.

Date Adjustment:

As a result of the calendar adjustment process, the Valuation Date, the

Settlement Date and/or Premium Payment Date of any affected FCM 

ForexClear Contracts will automatically be adjusted in accordance

with the provisions of the Relevant EMTA Template, relevant LCH 

Non-EMTA Contract Template or ISDA definitions as applicable.

The Clearing House will notify the FX FCMs via file download from 

the Clearing Member Reporting as to any FCM ForexClear Contracts 

affected and the date adjustments made.

2.2.92.2.10 Risk Status 

(a) The Clearing House may, in its absolute discretion, determine that 

an FX FCM is, or has ceased to be, subject to Risk Status (as 

applicable) and may:

(i) only where the Clearing House has determined that an FX FCM 

is subject to Risk Status, require such FX FCM to transfer 

additional Collateral (equal to the value determined by the 

Clearing House) to the Clearing House; and

(ii) notify each FCM Designated Trading Venue of such 

determination in respect of Risk Status, in the manner and at 

the time determined by the Clearing House.

(b) Without limitation to FCM Regulation 44, and subject to FCM 

Regulation 44(e), neither the Clearing House nor any other member 

of the LCH Group shall have any liability whatsoever to any FX 

FCM or any other person in contract, tort (including, without 

limitation, negligence), trust, as a fiduciary or under any other cause 

of action in respect of any damage, loss, cost or expense of 

whatsoever nature suffered or incurred in connection with:

(i) the Clearing House’s determination that an FX FCM is, or has 

ceased to be, subject to Risk Status;
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(ii) any delay in notifying, or failure to notify, a FCM Designated 

Trading Venue of the Clearing House’s determination that an 

FX FCM is, or has ceased to be, subject to Risk Status; and/or

(iii) a FCM Designated Trading Venue’s use, non-use or 

transmission of the information in Section 2.2.9(b)(i), or its 

delaying in transmitting, or failure to transmit, such information 

to any person.

2.2.102.2.11 Market Data

(a) Sources used by FCM ForexClear Service

The FCM ForexClear Service collates instrument quotes for the 

following from multiple market sources (as detailed in 

Section 2.2.11(b)) in relation to each Currency Pair:

(i) FX spot rates (“FX Spot Rates”);

(ii) FX swap points (“FX Swap Points”);

(iii) Settlement Rate Option;

(iv) Interest rate curves and overnight index swap curves (“Interest 

Rate Curves”);

(v) Price Alignment Amount rates (“Price Alignment Amount

Rates”); and

(vi) Country credit spreads (see Section 2.2.11(f) below) (“Country 

Credit Spreads”),

together, “Market Data”.

FX Spot Rates and FX Swap Points are received by the Clearing House 

via a live link from all eligible FXCCMs (including FX FCMs) during 

the Opening Hours.

(b) Market Data Sources and Frequencies

The Clearing House receives the following updated raw prices:

FX Spot Rates:

(i) Source – FXCCMs.

(ii) Frequency - every time updated by FXCCMs up to a 

maximum rate of once every five minutes.

FX Swap Points:

(i) Source - all FXCCMs.
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(ii) Frequency - every time updated by FXCCMs up to a 

maximum rate of once every five minutes.

(iii) Tenors – as shown in the table below.

Tenor

O/N

T/N

S/N

1 week

1 month

2 months

3 months

6 months

9 months

12 months

24 months

36 months 

48 months 

60 months 

Settlement Rate Options:

(i) Source - Reuters.

(ii) Frequency - when published (as referenced in the Relevant 

ETMA Template or given LCH Non-EMTA Contract 

Template, as applicable).

Interest Rate Curves:

(i) Source - internal Clearing House

(ii) Frequency - at each SwapClear margin run.

Country Credit Spreads:

(i) Source - Bloomberg.

(ii) Frequency - when published.

USD secured overnight financing rate curve:

(i) Source - SwapClear.

(ii) Frequency - at each SwapClear margin run.

Price Alignment Amount rates:

(i) Source - LCH Treasury.
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(ii) Frequency - Daily.

(c) [Not Used]

(d) Market Data Provision to FX FCMs

Market Data used in a Margin Run is made available to FX FCMs via 

ForexClear Reporting (as defined in Section 2.2.26).

(e) Curve Building in ForexClear

FX Curve (Zero Coupon/Market Rate Curve):

The Clearing House builds for each Currency Pair an FX curve (zero 

coupon/market rate curve) using the FX Spot Rates, FX Swap Points 

and the USD secured overnight financing rate curve based on 

interpolation techniques agreed through the ForexClear Risk & 

Trading Working Group (a group comprising the Clearing House's and 

FXCCM's (including FX FCM) risk and trading representatives) 

(“RTWG”). The USD secured overnight financing rate curve is used 

for discounting; the FX curve is used for capitalization of forward cash 

flows.

Interest Rate Curve:

The Clearing House applies the linear interpolation method to build the 

Interest Rate Curve. Linear interpolation is applied on zero coupon 

curves.

Curve Use:

End of day is defined as 22.00 hours, London time (“EOD”). The 

following EOD data is used in the calculation of risk analytics for an 

EOD Margin Run (as defined in Section 2.2.18(b)):

(i) FX Spot Rates; and

(ii) FX Swap Points.

(f) Country Credit Spreads

The Clearing House takes country credit spreads (in relation to Brazil, 

Russia, India, China, Chile, South Korea, Colombia, Indonesia, 

Malaysia, Philippines and Taiwan) from Bloomberg for use in risk 

multiplier calculations.

2.2.112.2.12 FCM ForexClear Contract Valuation
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(a) Net Present Value (“NPV”)

From (and including) the Registration Time to the EOD Margin Run

on the business day preceding the Valuation Date, each FCM 

ForexClear Contract is valued in USD using the current market rates 

and discounted from the future Settlement Date to its present value.

On the Valuation Date, the Settlement Rate is used to value the FCM 

ForexClear Contract.

If Valuation Postponement applies, the FCM ForexClear Contract is 

valued using the current forward price to (and including) the date on 

which the Settlement Rate is determined in accordance with the FCM 

ForexClear Contract Terms.

In the event a Settlement Rate or market rate is unavailable, as

determined by the Clearing House in its sole discretion, the Clearing

House will determine an alternative Settlement Rate or market rate.

(b) Variation Settlement (“VS”)

VS for each FCM ForexClear Contract is calculated at EOD as the 

change from the preceding business day in its NPV. With respect to 

each FX FCM, the net sum of the VS for all open FCM ForexClear 

Contracts is, subject to the netting provisions of FCM Regulation 47,

credited to or debited from such FX FCM once a day, following the 

EOD Margin Run.

VS will, subject to the netting provisions of FCM Regulation 47, be 

paid each business day by or to each FX FCM in respect of all of its

open FCM ForexClear Contracts. The VS will be calculated in, and 

must be paid in, USD.

With respect to each FCM ForexClear Contract, VS is calculated every 

business day from (and including) the Registration Time to (and

including) the EOD on the business day immediately preceding the 

Settlement Date.

Separate Variation Settlement calculations are performed in respect of 

an FCM Clearing Member's house “H” account and in respect of an 

FCM Clearing Member's client “C” account. No offset between the 

“C” and the “H” accounts is permitted. The Clearing House shall 

make or receive a separate Variation Settlement payment with respect 

to each house “H” account and each client “C” account (subject to the 

netting provisions of FCM Regulation 47 and the Default Rules).

(c) Reporting Breakdown

ForexClear margin reports show the portfolio of open FCM ForexClear 

Contracts of each FX FCM by Currency Pairs and in the Settlement 

Currency (i.e., USD).
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(d) Price Alignment Amount

The effect of daily cash VS movements results in the need for Price 

Alignment Amounts. Without this adjustment, the pricing of FCM 

ForexClear Contracts would differ from identical uncleared trades, as 

cash earned from favorable daily price moves would be priced into the 

product.

(e) Price Alignment Amounts Calculation Methodology

Price Alignment Amounts are calculated at EOD on each business day 

from (and including) the first business day after the Trade Date to (and 

including) the business day immediately preceding the Settlement 

Date.

In this Section 2.2.12(e), “T” means any given business day; “T-1” 

means the business day immediately preceding T; “T+1” means the 

business day immediately following T; and “Cumulative Variation 

Settlement” or “CVS” means, in respect of a Swap Product, a value 

equal to the aggregate of the amounts of Variation Settlement that have 

become owing from the FCM Clearing Member to the Clearing House 

in respect of such Swap Product minus the aggregate of the amounts of 

Variation Settlement that have become owing from the Clearing House 

to the FCM Clearing Member in respect of such Swap Product; 

provided that any such amounts shall only be counted to the extent the 

FCM Clearing Member or Clearing House, as applicable, has 

discharged its obligation to transfer such amounts in accordance with 

FCM Regulation 47. The Clearing House calculates Price Alignment 

Amounts in USD once a day at EOD.

Principles:

(i) CVS is calculated at EOD on T-1.

(ii) Variation Settlement in respect of an FX FCM's portfolio of 

open ForexClear Contracts) is paid/ received, subject to the 

netting provisions of FCM Regulation 47, on the morning of T.

(iii) The Price Alignment Amount Rate for T to be applied is known 

at EOD T.

(iv) The Price Alignment Amount is calculated on the night of T, 

for CVS of T-1 for FCM ForexClear Contracts up to the 

business day before their Settlement Date.

(v) The Price Alignment Amount is paid or received on morning of 

T+1 via PPS.

Components:

(vi) Price Alignment Amount Rate.
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(vii) Cumulative Variation Settlement of the FX FCM’s portfolio

open FCM ForexClear Contracts.

(viii) Accrual Factor (factor used to convert the Price Alignment 

Amount Rate from an annual rate to a daily rate, on a basis of a 

year of 360 days).

So:

(ix) Price Alignment Amount T = Price Alignment Amount T Rate 

x CVS T--1 x Accrual Factor.

The Clearing House uses the Price Alignment Amount Rate from the 

relevant EOD overnight index swap curves, which is sourced from the 

Clearing House.

2.2.122.2.13 Initial Margin (“IM”)

The Clearing House will require FX FCMs to furnish it with IM. This 

amount will be calculated intraday and at EOD on each business day as part 

of each Margin Run. Each FX FCM’s IM requirement, is calculated for the 

portfolio of open FCM ForexClear Contracts and FCM ForexClear 

Transactions using ForexClear's Portfolio Analysis and Risk (“FxPAR”) 

margining model. FxPAR is based on a modified filtered historical 

simulation value-at-risk methodology. All open FCM ForexClear Contracts 

and FCM ForexClear Transactions in each Currency Pair are re-valued under 

a series of cross portfolio yield curve scenarios to estimate the potential 

portfolio profit and loss and therefore the IM requirement.

These scenarios will be continually monitored and reviewed periodically or 

on an ad hoc basis according to market conditions. FX FCMs will usually be 

notified by the Clearing House of alterations to margin parameters no later 

than the day before calls are made based on the new parameters. Further 

details of this method are available upon request from the ForexClear Risk 

team.

FxPAR uses the historical (5 year) data submitted by FXCCMs pursuant to 

Section 2.2.10, which is adapted to current market prices.

Separate Initial Margin calculations are performed for an FX FCM's house 

“H” and client “C” accounts and, within a “C” account, separately in respect 

of each FCM Client Sub-Account therein. No offset between the “C” and 

“H” accounts is permitted.

The Clearing House reserves the right to require additional amounts of 

Margin from a specific FX FCM or from all FX FCMs in accordance with 

FCM Regulation 14 (Margin and Collateral).

(a) Credit Risk Multiplier (“CRiM”)
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The CRiM applied will consider the FX FCM's credit worthiness, 

Initial Margin level and/or stress testing exposures in accordance with 

LCH Credit Risk Policy.

(b) Liquidity Risk Multiplier (“LRMM”)

Where an FXCCM has an exposure above set thresholds in a particular 

Currency Pair or tenor of FCM ForexClear Contracts, the LRMM is

applied and additional IM is charged. The LRMM is calculated in 

accordance with parameters set by the ForexClear Default 

Management Group (the “FXDMG”) according to tenor and notional 

concentration. The thresholds are reviewed quarterly and use 

prevailing perceptions of market conditions as seen by the FXDMG.

LRMM increases IM called due to concentrated Currency Pair 

exposure by tenor of FCM ForexClear Contracts. Additional IM is 

called to mitigate the risk of a position not being closed out in seven 

days and/or the extra hedging costs that may be incurred.

The Clearing House calculates and applies LRMM as part of each 

Margin Run, based on the IM for each Currency Pair in the FX FCM's 

house position-keeping account.

(c) Sovereign Risk Multiplier (“SRM”)

SRM reflects the additional risk related to a potential country default or a

change in a country's currency regime, including risk relating to a 

country’s external debt or level of foreign exchange reserves, which 

would impact FCM ForexClear Contracts transacted in certain Reference 

Currencies. The SRM calculation considers the probability of sovereign 

default occurring and the depreciation or appreciation risk of the 

Reference Currencies

(d) Default Fund Additional Margin

The Clearing House may from time to time require an FX FCM to 

transfer Collateral to the Clearing House to meet the default fund 

additional margin requirement as determined and notified by the 

Clearing House to such FX FCM (“DFAM”). The methodology by 

which the Clearing House determines DFAM is available on the secure 

area of the Clearing House website. The Clearing House will record 

any Collateral an FX FCM has provided to meet its DFAM obligation

to the FX FCM’s Proprietary Account.

2.2.132.2.14 Additional Margin, ForexClear Tolerance, MER Buffer, Completion 

Margin and Intraday Margin Calls

(a) Additional Margin

The Clearing House may require an FX FCM to furnish additional 

amounts of Margin (in addition to Initial Margin) as security for the 

performance by an FX FCM of its obligations to the Clearing House in 
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respect of FCM ForexClear Contracts to which such FX FCM is a 

party in accordance with FCM Regulation 14 (Margin and Collateral). 

This may be required from time to time where, in the opinion of the 

Clearing House, the risk inherent in FCM ForexClear Contracts to 

which such FX FCM is a party is not adequately covered by Initial 

Margin. This may cover instances where stress testing losses under 

various scenarios provided in the ForexClear Default Fund Supplement 

have increased.

(b) Minimum Excess Requirement Buffer (“MER Buffer”)

To facilitate the intraday registration of FCM ForexClear Contracts, at 

each EOD Margin Run, the Clearing House will call from each FX 

FCM, separately in respect of its Proprietary Account and each of its 

FCM Client Sub-Accounts, an amount of IM in respect of its and its

FCM Clients' potential intraday Liabilities (as defined below in Section 

2.2.19) for the following day (“MER Buffer”), provided that the 

Clearing House shall not call MER Buffer from an FX FCM that (i) 

opted-in to ForexClear Tolerance in accordance with paragraph (c) 

below and (ii) opted-out of MER Buffer (the form and manner of such

“opt-out” notice shall be prescribed by the Clearing House from time 

to time). MER Buffer is part of the FX FCM's Required Margin. An 

FCM's MER Buffer is calculated in respect of an FCM's Proprietary 

Account and each of its FCM Client Sub-Accounts, and Margin 

furnished in respect of MER Buffer is credited to each account (as 

applicable) as IM. Notwithstanding the foregoing, for purposes of 

calculating a given FCM’s MER Buffer, the Clearing House may from

time to time, and in its sole discretion, exclude an FX FCM’s given 

FCM ForexClear Suspension Sub-Accounts from such calculation.

The required amount of MER Buffer for each applicable account of an 

FX FCM is expressed as a percentage of start-of-day portfolio IM for 

such account. The MER Buffer for each account is calibrated daily 

based on recent activity within the relevant account such that higher 

levels of intraday trade volumes lead to a proportionally higher MER 

Buffer requirement and vice versa. The MER Buffer percentage is 

calculated as a given percentile of intraday peak relative IM changes 

over a given number of historical business days.

The parameters of MER Buffer are: MER percentile, MER look-back 

period, relative MER cap and absolute MER floor. The values of these 

parameters are calibrated based on the quantitative analysis of the FX 

FCM's IM history across the ForexClear Service.

As FCM ForexClear Contracts are registered in an FX FCM's relevant 

accounts, the Clearing House will, in accordance with the Margin Run 

process, calculate the FX FCM's intraday Liabilities (or, in the case of 

an Incremental Risk Check, the FX FCM's estimated Liabilities), 

taking into account any IM posted as MER Buffer in the applicable

account.
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At each EOD Margin Run, the Clearing House will recalculate and call 

the FCM's Required Margin, which includes MER Buffer for all 

accounts.

(c) ForexClear Tolerance

In order to facilitate the registration of FCM ForexClear Contracts by 

FX FCMs, the Clearing House may, in its sole discretion, provide FX 

FCMs with temporary “tolerance” in the form of initial margin 

forbearance (“ForexClear Tolerance”). In the event an FX FCM 

wishes to utilize ForexClear Tolerance, it must provide notice to the

Clearing House (the form and manner of such notice shall be 

prescribed by the Clearing House from time to time). FX FCMs who 

are approved to utilize ForexClear Tolerance may choose not to utilize 

MER Buffer in connection with the registration of FCM ForexClear

Contracts (for the avoidance of doubt, the utilization of MER Buffer is 

compulsory for FX FCMs that do not opt-in to ForexClear Tolerance). 

The Clearing House may apply ForexClear Tolerance between Margin

Runs in an amount equal to the value of the Collateral that would have 

been required to be transferred by the FX FCM to the Clearing House 

to cover the relevant Liabilities (or estimated Liabilities) to facilitate 

the registration of FCM ForexClear Contracts. For the avoidance of 

doubt, ForexClear Tolerance is provided in the form of temporary 

initial margin forbearance and an FX FCM’s utilization of ForexClear 

Tolerance does not give rise to any payment or transfer of Collateral by 

the Clearing House or result in any use of default fund resources 

(except following a Default).

The Clearing House will determine, in its sole discretion, the

maximum value of the ForexClear Tolerance (which may be zero) that 

it will make available to an FX FCM from time to time ("ForexClear 

Tolerance Limit"). The Clearing House will notify each FX FCM of 

its ForexClear Tolerance Limit and will, as soon as reasonably 

practicable, notify an FX FCM following any adjustment to the amount 

of its ForexClear Tolerance Limit. Except where the Clearing House 

exercises its right to reduce an FX FCM’s ForexClear Tolerance Limit 

in accordance with the foregoing, each FXCCM utilizing ForexClear 

Tolerance shall have an equal ForexClear Tolerance Limit. 

The Clearing House may require an FX FCM to transfer Collateral to 

the Clearing House in respect of any utilization of ForexClear 

Tolerance at any time and without prior notice to the FX FCM. 

Without limiting the foregoing, the Clearing House will call for 

Collateral to replenish the ForexClear Tolerance utilized by an FX 

FCM at (i) the last ITD/Ad-hoc Day Margin Run and EOD Margin 

Run of each Business Day and (ii) in the event an FX FCM utilizes at 

least 75% of its ForexClear Tolerance during a business day, at the 

next relevant ITD/Ad-hoc Day Margin Run. Any failure of an FX 

FCM to satisfy a call for Collateral relating to ForexClear Tolerance 

may give rise to a Default by such FX FCM.
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The Clearing House will not apply ForexClear Tolerance for FCM 

ForexClear Contracts with a Trade Date earlier than the previous 

Business Day.

(d) Completion Margin

The Clearing House shall calculate and call each FX FCM for

“completion margin.” Completion margin is a component of each FX

FCM’s initial margin obligation, and represents potential increases in

an FX FCM’s initial margin obligations due to position changes

resulting from next-day fixing. Completion margin is calculated as the

incremental difference between an FX FCM’s aggregate initial margin

obligations on its FCM ForexClear Contracts and its initial margin

obligations in relation to FCM ForexClear Contracts due to fix the next

Business Day.

(e) Intra-day Margin Calls

In accordance with the Clearing House's FCM Regulations, the 

Clearing House is entitled to make additional margin calls for 

furnishing of Margin on the same day (intra-day margin calls) where it

is considered necessary. Intra-day margin calls may be made at any 

time throughout the business day. Intra-day margin calls will usually 

be made via the protected payments system (see Section 2.2.27(c)).

In certain circumstances, the Clearing House may wish to make a call 

for additional Margin after the UK PPS cut-off time of 08:00 hours

(New York time). In this event, the Clearing House will require 

payment of additional funds through PPS facilities in the USA (see 

Section 3.2). Members must ensure, in these circumstances, that they 

are in a position to fund such calls through their nominated US PPS 

account within one hour of the call.

2.2.142.2.15 Initial Margin Management Events Service (“IMMES”)

IMMES aims to find risk and IM reducing FCM ForexClear Contracts and 

ForexClear Contracts among participating FXCCMs. IMMES can be run on 

all Currency Pairs that are cleared through the FCM ForexClear Service,

although the primary focus will be on those Currency Pairs that contribute to 

the largest IM requirement. IMMES is available in respect of an FX FCM's 

house account only.

FX FCMs who wish to obtain further information about, or to participate in, 

IMMES should contact ForexClear Business Operations at 0207 426 7527. 

To be eligible to participate in IMMES, an FX FCM must enter into an 

IMMES agreement with the Clearing House (the “IMMES Agreement”).

(a) Step-by-step details

The Clearing House usually conducts the IMMES at least monthly.
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A reminder that there is an IMMES run taking place is sent out the 

week before to each FXCCM which is a party to an IMMES 

Agreement with LCH and each FXCCM is asked to confirm their 

participation.

On the day of the scheduled IMMES run, the Clearing House 

analyses all participating FXCCMs' profiles to find FCM ForexClear 

Contracts and ForexClear Contracts with equivalent and opposite 

delta values by tenor and Currency Pair to compile a list of offsetting 

suggested trades that are mutually beneficial in terms of IM reduction 

(the “IMMES Trades”).

The Clearing House then analyses the relevant FX FCM's FCM 

ForexClear Contract portfolios with the IMMES Trades and 

determines the change in NPV, IM, delta and zero yield sensitivity 

from the IMMES Trades.

The FXCCMs on either side of the trades are advised of the economic 

details of the IMMES Trades.

If the two FXCCMs agree to undertake the IMMES Trades, the 

Clearing House will then put them in touch with each other. The 

FXCCMs will enter into the bilateral IMMES Trades and submit 

them to the Clearing House through the FCM Approved Trade Source 

System for registration.

2.2.152.2.16 Intra-Day Margin Call: Collateral Management

(a) General – Intra-day Margining

Following an intra-day margin call (except as notified otherwise by an 

FX FCM at the time of an intra-day margin call), the Clearing House 

will deduct cash, in the appropriate currency, directly from the relevant 

FX FCMs PPS account to cover that intra-day margin call.

Cash payments in respect of intra-day Margin are accepted only in 

USD by the Clearing House.

Each FCM Clearing Member must ensure that it has sufficient cash 

funds in place with their PPS bank(s) in order to avoid any intra-day 

liquidity issues.

2.2.162.2.17 General Margining Process

A “Margin Run” is the process by which the Clearing House calculates an 

FX FCM's Initial Margin requirement (if any) and, during an EOD Margin 

Run, its Variation Settlement and Price Alignment Amount requirements

(together, its “Transfer Requirements”) and applies that FX FCM's Margin 

to satisfy the Transfer Requirements for that FX FCM in respect of the FCM 

ForexClear Contracts within that FX FCM's portfolio.

2.2.172.2.18 Types of Margin Runs
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There are three types of Margin Run:

(a) ITD / Ad Hoc – Day Margin Run

ITD/Ad-hoc London daytime Margin Runs are initiated as and when 

dictated by the schedule published by the Clearing House and notified 

to FX FCMs from time to time (the “Schedule”) or as necessary, and 

are performed in the time period during which a PPS call can be made 

(the “ITD/Ad-hoc Day Margin Run”), which PPS time period is 

available from the Clearing House on request. 

ITD/Ad-hoc Margin Runs are calls in respect of Initial Margin only. 

Variation Settlement and Price Alignment Amounts are not included in 

ITD/Ad-hoc Margin Runs.

(b) EOD Margin Run

The EOD Margin Run is the final ITD/Ad-hoc Day Margin Run that 

completes by 24:00 hours, London time, on that business day (the 

“EOD Margin Run”).

EOD Margin Runs are calls in respect of Initial Margin as well as 

Variation Settlement, NSA and Price Alignment Amounts.

(c) ITD / Ad Hoc - Night Margin Run

ITD/Ad-hoc London overnight Margin Runs are initiated as and when 

dictated by the Schedule or as necessary, and are performed in the time 

period during which a PPS call cannot be made (the “ITD/Ad-hoc 

Night Margin Run”).

ITD/Ad-hoc Night Margin Runs are calls in respect of Initial Margin 

only. Amounts that are anticipated to be owed in respect of Variation 

Settlement, NSA and Price Alignment Amounts may be considered in 

the determination of the amount of Initial Margin called in such

ITD/Ad-hoc Night Margin Run.

2.2.182.2.19 Margin Run Process

Margin Runs cover all registered FCM ForexClear Contracts with the status 

“NOVATED”.

Margin runs will be carried out for each FCM ForexClear Contract and FCM 

ForexClear Transaction (as the case maybe) until (and including) the later of:

(a) EOD Margin Run on the Settlement Date; or

(b) EOD Margin Run after the Settlement Rate is published.

During every Margin Run the Clearing House calculates the Initial Margin 

required and (where applicable) the Variation Settlement and Price Alignment 

Amounts required to cover each FX FCM's relevant open FCM ForexClear 
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Contracts and FCM ForexClear Transactions (each a “Liability” and together 

the “Liabilities”).

Each FX FCM's Liability is offset against that FX FCM's non-cash Collateral

account (being a sub-account of the FX FCM's financial account) (for IM 

only) or funds in that FX FCM's cash account (being a sub-account of the FX 

FCM's financial account) (for VS/Price Alignment Amounts/IM). Initial 

Margin will always be a Liability (payable to the Clearing House) and 

Variation Settlement, NSA and Price Alignment Amounts may be a cash 

posting or a Liability (payable by, or to, the Clearing House, respectively).

FX FCMs are informed via email of their Liabilities as a percentage of their

current total cover (such percentage being shown as a percentage of the 

aggregate cover in their cash and non-cash Collateral account(s)) and are 

directed to the ForexClear Services portal (being a secure website made 

available to FXCCMs) (the “ForexClear Service Portal”) which provides 

reports (at the times specified in Section 2.2.24) informing FX FCMs of their 

(i) total Liabilities under the FCM ForexClear Service; (ii) current total cover 

posted with the Clearing House for the FCM ForexClear Service (including 

MER Buffer and/or ForexClear Tolerance, if any); and (iii) Liabilities as a 

percentage of their current total cover (such percentage being shown as a 

percentage of the aggregate cover in their cash and non-cash Collateral 

account(s)).

If following a Margin Run an FX FCM is required to provide additional 

Collateral or funds, this is also indicated by email and via the ForexClear 

Service Portal. In the case of ITD/Ad-hoc Margin Runs, where an FX FCM's 

Liabilities exceed its available cover and any MER Buffer and/or ForexClear 

Tolerance, then the Clearing House will issue a margin call for the amount of 

the shortfall plus 50 per cent. of the FX FCM's MER Buffer amount.

2.2.192.2.20 Compression

(a) An FCM Clearing Member may compress Eligible FCM ForexClear

Compression Contracts in accordance with FCM Regulation 49(o) 

and this Section 2.2.20. There are two options available to an FCM

Clearing Member that wishes to compress Eligible FCM ForexClear

Compression Contracts:

(i) an FCM Clearing Member can request that all Eligible FCM

ForexClear Compression Contracts entered into (i) on behalf of

a designated FCM Client and in respect of a particular FCM

Client Sub-Account (including an FCM ForexClear Suspension 

Sub-Account), or (ii) on such FCM Clearing Member's own

behalf, be considered for compression by the Clearing House.

Such a request shall be reconsidered by the Clearing House 

automatically each day (and the results notified to the FCM

Clearing Member after the applicable scheduled compression

run) until the FCM Clearing Member notifies the Clearing

House to discontinue the compression of Eligible FCM

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should contact the Clearing House's Membership Department

to request such a compression of Eligible FCM ForexClear

Compression Contracts; or

(ii) an FCM Clearing Member may notify the Clearing House 

through the ClearLink API specifying the Eligible FCM

ForexClear Compression Contracts it wishes to be compressed.

The FCM Clearing Member will be notified after the

applicable scheduled compression run whether compression

has occurred and the Clearing House will not automatically

reconsider such compression request on subsequent days

regardless of whether compression has occurred.

(b) In order to compress an Eligible FCM ForexClear Compression

Contracts, an FCM Clearing Member must follow the process for

compression as set out above and must, at the time of compression,

have in its applicable FCM Client Sub-Account (or FCM 

ForexClear Suspension Sub-Account, if applicable) or Proprietary

Account two or more FCM ForexClear Contracts with the same

compression identifier (being an identifier applied by the 

Clearing House which indicates that such FCM ForexClear

Contracts are eligible for compression).

(c) In respect of each compression run, the Clearing House will notify 

Clearing Members of the cut-off time by which the F C M 

C l e a r i n g M e m b e r s m u s t n o t i f y t h e Clearing House of 

the requested Eligible FCM ForexClear Compression Contracts to

be compressed in order for such Eligible FCM ForexClear

Compression Contracts to be included in the relevant compression

run. The Clearing House shall process the compression of all

Eligible FCM ForexClear Compression Contracts notified to it

prior to such cut-off time and shall notify the applicable FCM

Clearing Member after the applicable compression run of the result

of such compression procedure. A notification received after the

relevant cut-off time shall be treated as if such notification was 

submitted on the following day.

(d) Following the compression process described above and as further

set out in FCM Regulation 49(o) (Registration of FCM 

ForexClear Contracts; Compression; ForexClear Accounts), the

applicable FCM Clearing Member shall promptly notify the

Clearing House if it believes that any errors have occurred in the

compression process or if its books and records do not reconcile

with those of the Clearing House in respect of the compressed FCM

ForexClear Contracts as notified to the FCM Clearing Member by

the Clearing House.

2.2.202.2.21 Portfolio Transfers (BAU)

The Clearing House permits the transfer of one or more Transferring

ForexClear Contracts between the Transfer Account of an Eligible Transferor
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to the Transfer Account of an Eligible Transferee, including, where relevant,

the transfer of associated Collateral.

 For transfers other than Permitted Transfers (as defined below), please 

contact the Clearing House’s Risk Management Department.

Permitted Transfers

Any transfer that meets the criteria in any of (a) through (g) below shall be a

“Permitted Transfer” for purposes of Regulation 49(r) and this Section 

2.2.21. In certain circumstances, a Permitted Transfer may be effected for all 

or part of the notional amount associated with the Transferring ForexClear 

Contracts. Notwithstanding the foregoing, but subject to Applicable Law, 

the Clearing House may reject any Permitted Transfers in its sole discretion.

(a) a transfer of one or more Transferring ForexClear Contracts where: 

(A) the Transfer Account of the Eligible Transferor is a Client 

Account; (B) the Transfer Account of the Eligible Transferee is a 

Client Account; and (C) the Receiving Clearing Member and the 

Carrying Clearing Member are separate legal entities;

(b) a transfer of one or more Transferring ForexClear Contracts where: 

(A) the Transfer Account of the Eligible Transferor is a Client 

Account; (B) the Transfer Account of the Eligible Transferee is a 

Client Account; and (C) the Receiving Clearing Member and the 

Carrying Clearing Member are the same legal entity;

(c) a transfer of one or more Transferring ForexClear Contracts where: 

(A) the Transfer Account of the Eligible Transferor is a Client 

Account; (B) the Transfer Account of the Eligible Transferee is a 

Proprietary Account; and (C) the Receiving Clearing Member and 

the Carrying Clearing Member are separate legal entities;

(d) a transfer of one or more Transferring ForexClear Contracts where: 

(A) the Transfer Account of the Eligible Transferor is a Proprietary 

Account; (B) the Transfer Account of the Eligible Transferee is a 

Client Account; and (C) the Receiving Clearing Member and the 

Carrying Clearing Member are separate legal entities;

(e) a transfer of one or more Transferring ForexClear Contracts where: 

(A) the Transfer Account of the Eligible Transferor is a Proprietary 

Account; (B) the Transfer Account of the Eligible Transferee is a 

Client Account; and (C) the Receiving Clearing Member and the

Carrying Clearing Member are the same legal entity;

(f) a transfer of one or more Transferring ForexClear Contracts where: 

(A) the Transfer Account of the Eligible Transferor is a Client 

Account; (B) the Transfer Account of the Eligible Transferee is a 

Proprietary Account; and (C) the Receiving Clearing Member and 

the Carrying Clearing Member are the same legal entity; and
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Verification and Reliance

Subject to the following paragraph, but otherwise notwithstanding anything 

to the contrary in the FCM Regulations or these FCM Procedures, in making 

any Transfer Request in accordance with Regulation 49(r) and this Section 

2.2.21, the Clearing House shall be authorized and entitled to rely 

conclusively on the instructions of, and information provided by, the 

Receiving Clearing Member and the Carrying Clearing Member, which shall 

be solely responsible for all such instructions and information.

The Clearing House shall verify that the Transferring ForexClear Contracts 

identified to it by a Receiving Clearing Member as being the subject of such 

Transfer Request correspond to FCM ForexClear Contracts that, according to 

its records, are registered in the Transfer Account of the Carrying Clearing 

Member on behalf of the Eligible Transferor. In the event that the Clearing 

House identifies a discrepancy, it will notify the Receiving Clearing Member 

and the Carrying Clearing Member and no transfer will occur until such time 

as the Transferring ForexClear Contracts identified to the Clearing House can 

be verified to the Clearing House.

Fees

Any Permitted Transfer effected pursuant to Regulation 49(r) and in 

accordance with these FCM Procedures will be subject to such fees as are 

established by the Clearing House from time to time in its sole and absolute 

discretion, and notified to FXCCMs via a member circular.

2.2.212.2.22 Actions in Respect of an FCM Client Default

This Section describes certain transfers and registrations that, under certain

conditions, can be requested by an FCM Clearing Member upon an FCM 

Client Default with respect to a given Defaulting FCM Client.

The Clearing House shall have no liability in connection with any loss or cost

suffered or incurred by any FCM Clearing Member or FCM Client in

connection with any actions taken by the Clearing House pursuant to this

Section 2.2.20.

Notwithstanding anything to the contrary contained in this Section 2.2.20, the

actions described in this section are subject to Applicable Law, including the

provisions of the CEA and the CFTC Regulations.

(a) Transfers between Proprietary Accounts and FCM Client Accounts

Pursuant to FCM Regulation 13(d), the UK General Regulations and 

the UK General Procedures, an FCM Clearing Member may, following 

the occurrence of an FCM Client Default, request that the Clearing 

House transfer one or more FCM ForexClear Contracts (including 

those submitted for registration pursuant to Section 2.2.20(c)) or 

ForexClear Contracts (as the case may be): (i) from the Defaulting 

FCM Client’s FCM Client Sub-Account to its Proprietary Account or 
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ForexClear Contracts to the Clearing House for registration in such

Defaulting FCM Client’s FCM Client Sub-Account, provided that the

following condition precedent is met (in addition to any other generally

applicable provisions of the FCM Rulebook): the submission of such 

FCM ForexClear Contracts is effected via an Approved Trade Source 

System or other method such method as the Clearing House shall 

instruct for such purpose, and on such terms and including such details 

as the Clearing House shall require.

(d) Representations

A request from an FCM Clearing Member to the Clearing House to 

carry out any of the actions described in paragraphs (a) to (c) above, 

shall in every case be deemed a representation by the FCM Clearing 

Member to the Clearing House that:

(i) an FCM Client Default has occurred;

(ii) the FCM Clearing Member has provided and will provide (as 

applicable) any required notices to the Defaulting FCM Client 

in respect of (i) such FCM Client Default and (ii) any of the 

actions described in paragraphs (a) to (c) above;

(iii) the FCM Clearing Member is permitted by its agreement(s) 

with the Defaulting FCM Client and has authority to effect the 

transfers and/or registrations specified in the FCM Clearing 

Member’s requests to the Clearing House in respect of the 

Defaulting FCM Client;

(iv) such transfers and/or registrations and all related instructions to

the Clearing House are in compliance with Applicable Law; 

and

(v) the individual making such request or submission (or issuing 

any related instructions to the Clearing House) is authorized to

do so on behalf of the FCM Clearing Member.

In connection with a request from an FCM Clearing Member to the 

Clearing House to carry out any of the actions described in paragraphs 

(a) to (c) above:

(vi) the FCM Clearing Member shall provide to the Clearing House

(i) satisfactory evidence of the occurrence of the FCM Client

Default and (ii) all other documentation required by the 

Clearing House, which shall include an indemnity from the 

FCM Clearing Member in favor of the Clearing House, the 

form and manner of which shall be determined by the Clearing 

House in its sole discretion. For purposes of this paragraph,

“satisfactory evidence” may be, to the extent permitted by the 

Clearing House in its sole discretion, the FCM Clearing 

Member’s instruction to effect the relevant transfer under 
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paragraph (a) or (b) above or accept the submission under 

paragraph (c) above. For the avoidance of doubt, the Clearing 

House shall be entitled to request additional evidence and/or 

documentation for legal, regulatory or risk management reasons; 

and

(vii) the relevant FCM Clearing Member shall transfer (or make

available) Required Margin into its Proprietary and/or the

applicable FCM Client Sub-Account, taking into account that 

an FCM Clearing Member may not request the transfer of an

Associated Collateral Balance in connection with a transfer of 

an FCM ForexClear Contract from an FCM Client SubAccount to a Proprietary Account.

2.2.222.2.23 Automatic Exercise of FCM ForexClear NDO Contracts

If, at the Expiration Time on the Expiration Date, the In-the-Money Amount 

of an FCM ForexClear NDO Contract equals or exceeds the product of:

(a) the number of basis points as published by the Clearing House from 

time to time as being applicable to the ForexClear Currency Pair 

referenced in that FCM ForexClear NDO Contract; and

(b) the Call Currency Amount or the Put Currency Amount, as 

appropriate,

in each case as calculated at or immediately prior to the Expiration Time on 

the Expiration Date of the given FCM ForexClear Contract, such FCM 

ForexClear NDO Contract shall be deemed exercised as of such time.

For the purposes of this Section 2.2.19, the Clearing House may change the 

number of basis point applicable to any ForexClear Currency Pair by giving 

three business days’ prior notice to affected FX CCMs (or such shorter notice 

period as determined by the Clearing House following consultation with the 

affected FX CCMs).

The "In-the-Money Amount" in relation to an FCM ForexClear NDO 

Contract shall, in respect of the Exercise Date, be equal to:

(c) in the case of a Call, the excess of the FX Spot Reference Price over 

the Strike Price, multiplied by the Call Currency Amount, where

both the Strike Price and the Settlement Rate are quoted in terms of 

the amount of Put Currency to be paid per one unit of Call Currency; 

and

(d) in the case of a Put, the excess of the Strike Price over the FX Spot 

Reference Price, multiplied by the Put Currency Amount, where 

both the Strike Price and the Settlement Rate are quoted in terms of 

the amount of Call Currency to be paid per one unit of Put Currency.

Capitalised terms used in this Section 2.2.19 and not otherwise defined shall 

have the meanings specified for such terms in (i) the FCM ForexClear Contract 
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Terms applicable to the given FCM ForexClear NDO Contract or, if not defined 

therein, (ii) the 1998 FX and Currency Options Definitions (including Annex A 

thereto) as published by the International Swaps and Derivatives Association, 

Inc., the Emerging Markets Trade Association and The Foreign Exchange 

Committee.

2.2.232.2.24 Proprietary Account Position Transfers

The FCM ForexClear Clearing System provides functionality for the transfer 

of positions from an FCM Clearing Member's Proprietary Account. Any 

such transfer may only occur if the Receiving Clearing Member is an affiliate 

of the Carrying Clearing Member.

Before the completion of a portfolio transfer, the Clearing House will 

perform a margin impact analysis of the transfer to the source and destination 

portfolios. The Clearing House will advise the relevant FX FCM regarding 

any additional collateral that may be required in order to complete the 

portfolio transfer. An FCM Clearing Member who wishes to effect a 

position transfer to another FCM Clearing Member should contact the

Clearing House's Risk Management Department. Transfers will only be 

effected once adequate cover has been provided by both parties to the 

transfer.

2.2.242.2.25 FCM Clearing Member's Client Fund Transfer

The FCM ForexClear Clearing System provides functionality for the transfer 

of FCM ForexClear Contract whereby an FCM Client has incorrectly booked 

the FCM ForexClear Contract to a fund, and wishes to re-locate the FCM 

ForexClear Contract to an alternative fund within the accounts of the same 

FCM Clearing Member.

Transfers can only occur based upon the below rules:

(a) A valid request has been received by the Clearing House from the 

applicable FCM Clearing Member on behalf of the FCM Client, as 

per Schedule 2.2B.

(b) The FCM ForexClear Contract is registered by the Clearing House, 

and sufficient Margin has been furnished to cover the FCM 

ForexClear Contract.

(c) Transfers are only handled within the accounts of a single FCM 

Clearing Member (i.e., not a transfer between two FCM Clearing

Members).

Transfer requests received by FCM ForexClear Operations prior to 15:00 

London time will be managed and included in the 18:00 London time margin 

run. The transfer of the FCM ForexClear Contract will occur provided that

sufficient Margin is held for the FCM Clearing Member and outstanding 

payments of Variation Settlement and other obligations have been made as 

necessary.
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2.2.252.2.26 ForexClear Reporting

For purposes of reporting obligations to the CFTC, FXCCMs may only 

report details of FCM ForexClear Contracts, including terminations and

modifications to an FCM ForexClear Contract, to an Approved LCH SDR. A

list of Approved LCH SDRs is available on the Clearing House's website. In

the event an FXCCM wishes to report details of FCM ForexClear Contracts 

to a swap data repository that is not an Approved LCH SDR, the FXCCM 

must provide the Clearing House with reasonable prior notice of the date on 

which it wishes to report to such swap data repository.

FXCCMs must inform their respective FCM Clients of the list of Approved

LCH SDRs, and inform such FCM Clients that the Clearing House is only

able to report details of an FCM ForexClear Contract to an Approved LCH

SDR.

The Clearing House produces a suite of treasury reports for members across 

each of the Clearing House services. Some of these reports are cross-service 

reports and others are specific to the ForexClear Service (including the FCM 

ForexClear Service), thus an FX FCM will receive reports in respect of the 

FCM ForexClear Service and may also receive cross-service reports where it 

is a member of another service. The terminology used in a report in respect 

of Margin, Variation Settlement or Price Alignment Amount may reflect 

terminology commonly used in the industry. Such terminology shall not 

affect the interpretation or construction of any provisions or terms of the 

FCM Regulations or FCM Procedures.

In respect of the FCM ForexClear Service, on each business day the Clearing 

House will provide two sets of reports to FX FCMs: (1) Banking Reports; 

and (2) reports direct from the FCM ForexClear Service (together 

“ForexClear Reporting”). These Procedures reference the FCM ForexClear 

Service specific reports. Each day's report will remain available for 

download by FX FCMs from the FCM ForexClear Service Portal for five

days.

The Clearing House (acting, where applicable, through the entity to which it 

has elected to delegate the relevant reporting obligations) shall, to the extent 

required by (and in line with the requirements of) Applicable Law (including 

Parts 43 and 45 of the CFTC Regulations, and applicable requirements under 

English law), report to one or more data or trade repositories (including swap 

data repositories) or similar body the details of all FCM ForexClear 

Transactions and FCM ForexClear Contracts, including any modifications or 

terminations without duplication and no later than the working day following 

the conclusion, modification or termination of such contract. In order to 

avoid any such duplication of reports, each FX FCM acknowledges and 

agrees that it will not report the details referred to in this paragraph to the 

bodies referred to in this paragraph, unless otherwise agreed with the 

Clearing House.
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(a) Margin Liability Reports

Reports detailing Liabilities are provided to FX FCMs following every 

scheduled Margin Run in accordance with Section 2.2.19 and where 

additional Collateral or other payment has been called by the Clearing 

House. Additionally, a report, including sensitivities, is provided at 

ForexClear Contracts level. A report will also be provided detailing an 

FX FCM's Margin utilization level. If an FX FCM's Liabilities exceed 

its total available Margin, ForexClear will alert the FX FCM.

(b) Market Data Reports

Reports detailing Market Data are provided to FX FCMs following 

every scheduled Margin Run. They include reports of Market Data 

and Settlement Rate used in the valuation of FCM ForexClear 

Contracts and reports of Market Data shifts for each historic scenario 

used in IM calculations.

(c) Trade Reports

Reports are provided that enable FX FCMs to monitor their firms' 

trading events and positions in respect of ForexClear. Reports on open 

FCM ForexClear Contracts and on cancelled FCM ForexClear 

Transactions and FCM ForexClear Contracts are generated at EOD and 

reports on transferred FCM ForexClear Contracts are made on an ad 

hoc basis.

(d) Trade Fixing and Settlement Reports

Reports are published on each business day detailing the FCM 

ForexClear Contracts to which the Settlement Rate has been applied on 

that business day (the “NDF Fixings” report), FCM ForexClear 

Contracts that have been settled during that current business day (the 

“Settlements Today” report) and FCM ForexClear Contracts that will 

settle the next business day (the “NDF's Fixed with Settlement 

Tomorrow” report).

(e) Fees Reports

Reports on trading volumes on a daily and monthly basis are provided 

to FX FCMs. Monthly reports are provided on the last business day of 

each month. They include the full trading volumes on which the 

monthly transaction fees will be charged to those FX FCMs choosing 

to have tariffs levied per transaction.

(f) Banking Reports

Reports relating to an FX FCM’s Collateral are available from the 

Clearing House portal at https://clearingservices.lch.com/portal/login. 
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(g) Real-time Reporting

A near real-time view of member liabilities, Collateral pledged, 

Margin and credit utilization will be available from the ForexClear 

Service Portal (referred to in Section 2.2.17).

In accordance with CFTC Part 45 requirements (where the FX FCM 

has a reporting obligation), FX FCMs must provide the Clearing House 

(i) the USI of the original swap that is submitted to the Clearing House 

for registration and (ii) the LEI of the original swap SDR (i.e., 

“OriginalSwapRepository” or equivalent field) to enable the Clearing 

House to accurately report the termination of the original swap to the 

appropriate SDR.

2.2.262.2.27 Treasury Operations & Collateral Management

(a) Cover Distribution

The Clearing House nets each FX FCM's Liabilities (i.e., margins, 

settlements, Price Alignment Amounts and multipliers) and then the 

total of Cash collateral and non-cash Collateral are applied to offset 

those net Liabilities. This process is known as cover distribution 

(“Cover Distribution”). FX FCMs can choose whether cash or noncash Collateral should be applied first. At the end of this process, if an 

FX FCM has a shortfall, a PPS (as defined in Section 2.2.27(c) below) 

call for additional Collateral, settlement amounts or Price Alignment 

Amounts is made. Conversely, any excess cash remaining after the 

final overnight Margin Run can, if requested before 09:30 hours be 

repaid to the FX FCM.

(b) Cover Distribution Notification

FX FCMs are informed via email of their: Liabilities as a percentage 

of their current total cover (such percentage being shown as a 

percentage of the aggregate cover in their cash and non-cash Collateral 

account(s)) and are directed to the ForexClear Service Portal which 

provides reports (at the times specified in Section 2.2.26) informing 

FX FCMs of their (i) total Liabilities under the ForexClear Service; 

(ii) current total cover posted with the Clearing House for ForexClear; 

and (iii) Liabilities as a percentage of their current total cover (such 

percentage being shown as a percentage of the aggregate cover in their 

cash and non-cash Collateral account(s)).

The reports accessed via the ForexClear Service Portal will enable FX 

FCMs to log in and examine the underlying data.

(c) Protected Payment System

The Clearing House operates the protected payments pystem (“PPS”) 

for transferring funds to and from its FX FCMs to cover their Transfer
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Requirements. This is similar to a direct debit arrangement where the 

PPS bank confirms that any Clearing House-specified call is met.

FX FCMs are obliged to hold an account with a UK PPS bank in USD, 

as well as a USD account with a PPS bank in the USA.

The list of PPS banks operating in the UK and US is available from the 

Clearing House on request.

(d) Acceptable Forms of Collateral Cover

A detailed description of acceptable collateral and applicable processes 

is available from the Clearing House on request.

(e) Interest and Accommodation

Interest is payable to or by FX FCMs on cash Collateral with respect to 

the ForexClear Service held by the Clearing House. The rate to be 

applied will be either LDR – London Deposit Rate, or CDR – Client 

Deposit Rate, as further described in Section 1.6.3 of Section 3 of the 

Procedures and as prescribed by the Clearing House from time to time 

by publication on its website.

A utilization fee, known as an accommodation charge, is charged on 

securities lodged at the Clearing House to cover liabilities. For an 

overview of interest and accommodation charges, please contact the 

Clearing House's Treasury Operations.

The Clearing House shall notify FX FCMs of any change to the LDR 

for the ForexClear Service via member circular.

2.2.272.2.28 Default Management

(a) Portfolio Splitting

As part of the ForexClear DMP (contained in the ForexClear DMP 

Annex to the Default Rules), the Clearing House may divide an 

Auction Portfolio into two or more individual Auction Portfolios. In 

circumstances where such portfolio splitting is adopted, the Clearing 

House will, in consultation with the ForexClear DMG (as defined in 

the ForexClear DMP Annex to the Default Rules), seek to create:

(i) one or more individual Auction Portfolios which have 

comparatively greater levels of risk associated with them, 

thereby isolating such Auction Portfolios from those which are 

more risk neutral; and

(ii) one or more individual Auction Portfolios which are more risk 

neutral.
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DMA that was combined to form such Merged 

DMA, pro rata according to the Pre-Merger 

TMR Ratio of each such DMA.

(D) If the Clearing House attributes an amount to a DMA 

under subparagraph (C)(2) above, then it will further 

attribute such amount according to the method 

specified in subparagraph (C) (treating such amount as 

an Interim Amount for the purposes of subparagraph 

(C)) until all amounts are attributed to Non-Porting

FCM Client Sub-Accounts. 

(vi) Attribution of Auction Results

The Clearing House shall attribute the Auction Result, in 

respect of the sale of an Auction Portfolio, to each Affected 

Non-Porting FCM Client Sub-Account referable to the Final 

DMA from which such Auction Portfolio was formed, pro rata 

according to the Pre-Default TMR Ratio of each such Affected 

Non-Porting FCM Client Sub-Account.

(vii) CFTC Regulations

The Clearing House shall hold the relevant Collateral in respect 

of Non-Porting FCM Client Sub-Accounts (segregated as 

belonging to each such applicable Non-Porting FCM Client 

Sub-Account in accordance with the CFTC Regulations and 

Part 22 thereof) in its applicable FCM Omnibus ForexClear 

Client Account with LCH until the process described in this 

paragraph (f) has been completed. For the avoidance of doubt, 

the Clearing House may only take such actions pursuant to this 

paragraph as permitted by the FCM Rulebook, the CEA and the 

CFTC Regulations or as directed by an applicable Regulatory 

Body.

2.2.282.2.29 Payment of Stamp Tax

Each FCM Clearing Member shall pay any stamp tax or duty levied or 

imposed upon it or in respect of its execution or performance of the FCM 

Clearing Membership Agreement, the FCM Default Fund Agreement, the 

FCM Regulations and the FCM Procedures (including any registration of an 

FCM ForexClear Contract) by a jurisdiction in which it is incorporated, 

organized, managed and controlled, or considered to have its seat, or in 

which a branch or office through which it is acting is located or by any other 

jurisdiction and shall indemnify the Clearing House against any stamp tax or 

duty levied or imposed upon the Clearing House or in respect of the Clearing 

House's execution or performance of the FCM Clearing Membership 

Agreement, the FCM Regulations and the FCM Procedures (including any 

registration of an FCM ForexClear Contract) by any such jurisdiction.
FCM Procedures FCM ForexClear

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2.2.292.2.30 Section 696, Corporation Tax Act 2009

The FCM Clearing Member agrees that should a situation arise where HM 

Revenue and Customs (“HMRC”) raises an enquiry, or makes an 

information request, to the Clearing House regarding an FCM Transaction or 

FCM Contract that the FCM Clearing Member is submitting (or has 

submitted) to the Clearing House, and that enquiry or information request is 

in respect of the application of s696 - s697 Corporation Tax Act 2009, the 

FCM Clearing Member will use its reasonable efforts to provide such 

information and support as the Clearing House may reasonably require in 

order to respond to and effectively deal with the queries raised by HMRC.

2.2.302.2.31 Provision of Tax Forms

The Clearing House and each FXCCM shall provide to each FXCCM or the

Clearing House, as relevant, (i) any forms or documents specified in the 

FCM ForexClear Contract between the Clearing House and the FXCCM and 

(ii) any other form, document, statement or certification reasonably requested 

in writing by the FXCCM or the Clearing House in order to allow the 

FXCCM or the Clearing House to make a payment under the Clearing House 

rules or any FCM ForexClear Contract without deduction or withholding for 

or on account of any tax or with such deduction or withholding at a reduced 

rate unless the Clearing House or the FXCCM can no longer deliver such 

form, document, statement or certification solely as a result of a change in 

law (including double tax treaty) or interpretation thereof after the date of the 

FCM ForexClear Contract between the Clearing House and the FXCCM. In 

the case of the Clearing House, the forms required pursuant to item (ii) above 

include an Internal Revenue Service Form W-8BEN. Additionally, the 

Clearing House will take such further actions as necessary to ensure that 

payments made to it can be made without deduction or withholding for or on 

account of any Tax.

2.2.312.2.32 Prescribed Terms

Pursuant to FCM Regulation 7 the Clearing House may prescribe certain 

provisions that an FCM ForexClear Clearing Member must include in its 

agreement with an FCM Client.

There an FCM ForexClear Clearing Member provides FCM Clearing 

Services to an FCM Client that is a registered investment company, as 

defined in the Investment Company Act of 1940, it shall include provisions 

in its agreement with that FCM Client to the following effect:

(a) the FCM ForexClear Clearing Member shall comply with 

Applicable Law relating to the segregation of FCM Client Funds 

including without limitation Part 22 of the CFTC Regulations;

(b) FCM Client Funds delivered by the FCM Client shall be held in 

accordance with the CEA and the CFTC Regulations and the FCM 

ForexClear Clearing Member shall obtain an acknowledgement, to 

the extent required by Parts 1.20 and 22 of the CFTC Regulations, 
FCM Procedures FCM ForexClear

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that those FCM Client Funds are being held in accordance with the 

CEA and the CFTC Regulations;

(c) the FCM ForexClear Clearing Member will promptly furnish copies 

of or extracts from its records or such other information pertaining 

to the FCM Client’s assets as the Securities Exchange Commission, 

through its employees or agents, may request;

(d) any gains on FCM ForexClear Contracts held on behalf of an FCM 

Client (other than de minimus amounts) may be maintained by the 

FCM ForexClear Clearing Member only until the next Business Day

following receipt;

(e) the FCM Client has the ability to withdraw its assets from the FCM 

ForexClear Clearing Member as soon as reasonably practicable if 

the FCM ForexClear Clearing Member’s or the Clearing House’s 

custody of FCM Client Funds no longer meets the requirements of 

Rule 17f-6 under the Investment Company Act of 1940.
 

LCH | 10 Paternoster Square | London EC4M 7LS | T: +44 (0)20 7426 7000 | F: +44 (0)20 7426 7001 | lch.com

LCH Group Holdings Limited | LCH Limited | Banque Centrale de Compensation | LCH.Clearnet LLC

LCH Group Holdings Limited. Registered in England No. 4743602 Registered Office: 10 Paternoster Square, London, EC4M 7LS

RESTRICTED - EXTERNAL

Appendix III

Procedure Section 4 (Margin and Collateral) – Collateral Takebacks
CORPORATE

LCH LIMITED 

PROCEDURES SECTION 4 

MARGIN AND COLLATERAL
Clearing House Procedures Collateral

LCH Limited © 2023 - 7 -

NovemberMay 2023

CORPORATE

such Depository as the Clearing House may select or allow, subject to the 

conditions of such Depository, to any Applicable Law and subordinate rules

relating thereto, as well as to the terms of the relevant Deed of Charge, Client 

Charge, Collateral Management Agreement, charge documentation and these 

Procedures.

1.1.7 Coupons 

The Clearing House will record coupons that arise in respect of non-cash 

Collateral of a Clearing Member, taking into account any withheld tax, 

("Coupons") to such Clearing Member's relevant Client Account or 

Proprietary Account and to the non-cover ledger within such account (see 

Section 1.1.4(a)(i) of Section 3 of the Procedures (Financial Transactions)) on 

the appropriate payment date, and such Coupons will be cash Collateral 

forming part of the Clearing Member Current Collateral Balance of such 

Client Account or Proprietary Account.

The Clearing House will promptly on or after the appropriate payment date 

take such steps as are necessary to transfer Coupons to the relevant Clearing 

Member (except Coupons which are automatically transferred to such 

Clearing Member by operation of a triparty transaction), provided that the 

Clearing House shall only be obliged to take such steps pursuant to this 

Section 1.1.7:

(a) to the extent that they constitute excess collateral;

(b) if the Clearing Member is not a Defaulter;

(c) to the extent the Clearing House is permitted to take such steps and 

make such transfer under Applicable Law and the contractual 

provisions of any relevant Depository; 

(d) if the Clearing House considers it is not necessary or desirable to retain 

such Coupons in order to effect (or seek to effect) a transfer of 

Contracts and Collateral from an account of a Clearing Member to 

another account of a Clearing Member or FCM Clearing Member in

accordance with the Rulebook, the FCM Regulations, the FCM 

Procedures and/or any relevant Collateral Management Agreement; 

and

(e) if there is no overnight margin and/or cash call (including an EOD 

Margin Run call) in respect of the relevant Clearing Member which 

remains outstanding.

Clearing Member shall withdraw all securities collateral used to cover their 

initial margin requirements prior to the maturity record date for the relevant 

securities, which is the cut-off date used to determine which security holder is 

entitled to final redemption funds for the relevant securities (“Final 

Redemption Record Date”).
 

LCH | 10 Paternoster Square | London EC4M 7LS | T: +44 (0)20 7426 7000 | F: +44 (0)20 7426 7001 | lch.com

LCH Group Holdings Limited | LCH Limited | Banque Centrale de Compensation | LCH.Clearnet LLC

LCH Group Holdings Limited. Registered in England No. 4743602 Registered Office: 10 Paternoster Square, London, EC4M 7LS

RESTRICTED - EXTERNAL

Appendix IV

FCM Procedures – Collateral Takebacks
CORPORATE

FCM PROCEDURES OF THE CLEARING HOUSE

LCH LIMITED
FCM Procedures Collateral

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4. COLLATERAL

4.1 General Information

4.1.1 Non-Cash Collateral 

FCM Clearing Members wishing to lodge securities (of the type permitted by 

the Clearing House) with the Clearing House as Collateral may do so. 

Securities lodged will be subject to a security interest and held in an account 

with the Clearing House by the FCM Clearing Member (in respect of 

Collateral furnished on behalf of FCM Clients, the Clearing House shall hold 

such securities in the applicable LCH Client Segregated Depository Account).

Collateral provided in respect of an FCM Clearing Member's Client account 

will not be applied by the Clearing House to its liabilities on a house account 

(see FCM Regulation 14(j) (Margin and Collateral)).

FCM Clearing Members are warned that the transfer of Collateral and 

the grant of a security interest are complex legal matters. The FCM 

Rulebook and any communication with the Clearing House (whether of 

an oral or written nature) are not to be taken as legal or other advice. An 

FCM Clearing Member should seek its own independent professional 

advice.

4.1.2 General Information

LCH Security Arrangements

FCM Clearing Members wishing to lodge securities with the Clearing House 

may do so under the security arrangements set out in the FCM Clearing 

Membership Agreement and the FCM Regulations.

Collateral provided in respect of an FCM Clearing Member's Client account 

will not be applied by the Clearing House to its liabilities on a House account 

(see FCM Regulation 14(j) (Margin and Collateral)).

Unless stated otherwise in the FCM Rulebook, Collateral provided in respect 

of an FCM Clearing Member's House account may be applied by the FCM 

Clearing House towards the payment of any sum whatsoever due by the FCM 

Clearing Member to the Clearing House, provided, that no Collateral 

furnished in respect of an FCM Clearing Member's Client accounts shall be 

applied on or towards payment or satisfaction of any of the FCM Clearing 

Member's liabilities to the Clearing House on any of the FCM Clearing 

Member's House accounts.

As set out in FCM Regulation 14(c) (Margin and Collateral), where an FCM 

Clearing Member wishes to furnish Collateral on behalf of an FCM Client to 

the Clearing House, the FCM Clearing Member must, inter alia, ensure that at 

all times it remains expressly agreed with the FCM Client that the FCM 

Clearing Member may provide the Collateral to the Clearing House, on the 

Clearing House's terms and free of the FCM Client's interest to secure the 

FCM Clearing Member's obligations to the Clearing House. The Clearing 
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House gives no undertaking that, on the Default of an FCM Clearing Member, 

it will not utilize Collateral furnished on behalf of an FCM Client which has 

been passed to it by an FCM Clearing Member, before utilizing any other form 

of Collateral the Clearing House may hold.

4.1.3 Additional General Information

The Clearing House is, at its sole discretion, entitled to determine what will be 

acceptable to it as Collateral and to determine when a security will cease to be 

acceptable as Collateral.

If any cash, instrument or security lodged in accordance with any of the 

following FCM Procedures is in any way found to be unacceptable, it will 

immediately be given a zero value in the FCM Clearing Member's relevant

account with the Clearing House. Replacement Collateral may be required 

immediately from the FCM Clearing Member.

4.1.4 Instructions

The Clearing House accepts instructions to lodge, release and transfer cash 

and securities via the CMS and/or any other operational process the Clearing 

House determines. If there is an outage of the CMS, an FCM Clearing 

Member may send certain instructions using the appropriate form in the 

Schedules of these FCM Procedures by email to

collateral.clientservice@lseg.com. 

Collateral Operations can be contacted on +44 (0) 207 426 7505.

The Clearing House is entitled to act upon CMS instructions or 

communications appearing to have been issued by or on behalf of, or to have 

come from, an FCM Clearing Member. These will be accepted by the

Clearing House as genuine, even if, for example, they are later found:

(a) to be inaccurate, whether in whole or in part; or

(b) not to have been given by the FCM Clearing Member or with the 

authority of the Clearing Member.

The Clearing House will only accept delivery of securities Collateral from an 

FCM Clearing Member in accordance with these FCM Procedures and will 

not sell or purchase cash or securities Collateral for FCM Clearing Members, 

except in so far as it is acting under its Default Rules and related provisions of 

the FCM Rulebook or in relation to Exchange Rules.

The Clearing House reserves the right to change the information required on 

instructions received via the CMS, whenever the Clearing House, at its sole 

discretion, considers that it would be appropriate to do so.

4.1.5 Excess Margin Maintained in Proprietary Accounts

In accordance with FCM Regulation 14(bb) (Margin and Collateral), FCM 

Clearing Members are permitted to maintain Excess Margin in their 
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Proprietary Accounts (regardless of whether any such FCM Clearing Member 

has elected to have one or more of its FCM Omnibus Swaps Client Accounts 

with LCH subject to the With Excess Client Model), but subject to the right of 

the Clearing House, in its sole discretion, to return such Excess Margin to the 

FCM Clearing Member. Alternatively, the Clearing House may notify that 

FCM Clearing Member of the intention to levy a charge in respect of Excess 

Margin with effect from such date as is notified to the FCM Clearing Member. 

In the event that the FCM Clearing Member does not remove Excess Margin 

before the date so notified, the Clearing House may, in its discretion, charge 

the FCM Clearing Member at the rate of 1 basis point per day until Excess 

Margin is removed by the FCM Clearing Member. Payment of this charge 

shall be collected on a monthly basis through that FCM Clearing Member's 

PPS sterling account. This charge applies only to Margin lodged with respect 

to FCM Contracts registered to the FCM Clearing Member’s Proprietary 

Account.

The Clearing House shall have absolute discretion to decide whether and to 

what extent it is holding Excess Margin at any time.

The ability of FCM Clearing Members to maintain Excess Margin in its FCM 

Omnibus Futures Client Accounts with LCH is governed by the provisions of 

the FCM Rulebook, including FCM Regulation 14(aa)(ii) (Margin and 

Collateral).

The ability of FCM Clearing Members to maintain Excess Margin in its FCM 

Client Sub-Accounts is governed by the provisions of the FCM Rulebook, 

including FCM Regulation 15 (Margining of Swap Product Client Accounts).

4.1.6 Return and Provision of Cash Excess Margin

Requests for the return of USD cash Excess Margin must be received by the 

Clearing House before 09:30 hours (New York time) on a U.S. Business Day. 

In respect of any such request received by the Clearing House after 09:30 

hours (New York time) on a U.S. Business Day, the Clearing House shall have 

sole discretion as to whether or not to return the relevant USD cash Excess 

Margin to the requesting FCM Clearing Member except with the consent of 

the Clearing House. Additionally, if the Clearing House does not repay the 

relevant excess USD cash requested by an FCM Clearing Member after 09:30 

hours (New York time) on a U.S. Business Day, such request shall be deemed 

void.

The Clearing House will not accept deposits of USD cash Collateral as Excess 

Margin on any date that is not a U.S. Business Day or at any time after 14:00 

hours (New York time) on a U.S. Business Day.

4.1.7 Lodgment of Collateral as Replacement for Cash Cover for Margin

This Section 4.1.7 applies only to Proprietary Accounts of FCM Clearing 

Members. FCM Clearing Members should note that they must give Collateral

Operations no less than two (2) Business Days’ notice of their intention to 

lodge Collateral with a value of £50 million sterling or more, and which is 
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reasonably likely to have the effect that cash to a similar value is repayable by 

the Clearing House to that FCM Clearing Member as a result of such 

lodgment. In the event that an FCM Clearing Member seeks to withdraw such 

cash Collateral without giving such notice, the Clearing House will decline to 

release such cash Collateral until the end of the required notice period. The 

Clearing House may extend the required notice or vary the minimum 

Collateral value by written notice to FCM Clearing Members.

4.1.8 Force Majeure

The Clearing House will not be liable for any failure, hindrance or delay in the 

performance (in whole or in part) of any of its obligations to FCM Clearing 

Members with regard to Collateral where such failure, hindrance or delay 

arises from causes beyond the control of the Clearing House, such as (but not 

limited to) the failure (whether partial or total), interruption or suspension of 

any Depository that the Clearing House is using, the termination or suspension 

of the Clearing House's membership or use of any Depository or any variation 

of a Depository's operational timetable, whether or not occasioned by action of 

the Depository operator or any other party, any embargo, unavailability or 

restriction of bank transfer systems or wires, malfunction or overload of the 

Depository, or any other emergency. This provision is without prejudice to 

the force majeure provisions of FCM Clearing Members' agreements with the 

Clearing House.

4.1.9 Regulatory and Supervisory Information

In every case, the Clearing House will be entitled to supply a Depository with 

all the information it requires for any purposes relating to an FCM Clearing 

Member or relating to Collateral received by the Clearing House from an FCM 

Clearing Member which is, or may at any time have been, held by the 

Depository. Securities Collateral will be lodged and held within such

Depository as the Clearing House may select or allow, subject to the 

conditions of such Depository and to any Applicable Law and subordinate 

rules relating thereto, as well as to the terms of the FCM Rulebook and these 

FCM Procedures.

4.1.10 Coupons

The Clearing House will record coupons that arise in respect of non-cash 

Collateral of an FCM Clearing Member, taking into account any withheld tax, 

("Coupons") to such FCM Clearing Member's relevant FCM Omnibus Swaps 

Client Account with LCH, FCM Omnibus Futures Client Account with LCH 

or Proprietary Account and to the non-cover ledger within such account (see 

Section 3.1.3(a)(i) of these FCM Procedures) on the appropriate payment date, 

and such Coupons will be cash Collateral.

The Clearing House will promptly on or after the appropriate payment date 

take such steps as are necessary to transfer Coupons to the relevant FCM

Clearing Member (except Coupons which are automatically transferred to 

such FCM Clearing Member by operation of a triparty transaction), provided 
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that the Clearing House shall only be obliged to take such steps pursuant to 

this Section 4.1.10:

(a) to the extent that they constitute Excess Margin;

(b) if the FCM Clearing Member is not a Defaulter;

(c) to the extent the Clearing House is permitted to take such steps and 

make such transfer under Applicable Law and the contractual 

provisions of any relevant Depository; 

(d) if the Clearing House considers it is not necessary or desirable to 

retain such Coupons in order to effect (or seek to effect) a transfer of 

FCM Contracts and Collateral from an account of an FCM Clearing 

Member to another account of an FCM Clearing Member or NonFCM Clearing Member in accordance with the FCM Rulebook, the 

FCM Procedures, the UK General Regulations and/or UK General 

Procedures; and

(e) if there is no overnight margin and/or cash call (including an EOD 

Margin Run call) in respect of the relevant FCM Clearing Member 

which remains outstanding.

FCM Clearing Member shall withdraw all securities collateral used to cover 

their initial margin requirements prior to the maturity record date for the 

relevant securities, which is the cut-off date used to determine which security 

holder is entitled to final redemption funds for the relevant securities (“Final 

Redemption Record Date”).

4.1.11 Record Date

The Clearing House may restrict the lodgement, release and/or transfer of noncash Collateral on a record date for the payment of a Coupon applicable to 

such non-cash Collateral where the Clearing House considers this necessary in 

order to correctly pay such Coupon to the relevant FCM Clearing Member on 

the Coupon payment date.

4.2 Securities

4.2.1 General Information

Securities must be lodged in the Clearing House's relevant settlement accounts 

(see Schedule 4D).

4.2.2 Settlement procedures – Securities

All transactions to deposit or withdraw securities Collateral with or from the 

Clearing House will be executed free of payment.
 

LCH | 10 Paternoster Square | London EC4M 7LS | T: +44 (0)20 7426 7000 | F: +44 (0)20 7426 7001 | lch.com

LCH Group Holdings Limited | LCH Limited | Banque Centrale de Compensation | LCH.Clearnet LLC

LCH Group Holdings Limited. Registered in England No. 4743602 Registered Office: 10 Paternoster Square, London, EC4M 7LS

RESTRICTED - EXTERNAL

Appendix V

General Regulations – Registration Time
Clearing House: General Regulations

- iNovemberJulyFebruary 2023

GENERAL REGULATIONS OF

LCH LIMITED 
Clearing House: General Regulations

- 64-

NovemberJulyFebruary 2023

"Register of RepoClear 

Dealers"

means the register which lists RepoClear Dealers regarded 

by the Clearing House as for the time being eligible to submit 

contracts for registration as RepoClear Contracts or 

RepoClear Term £GC Contracts by the Clearing House or to 

deal through one or more Automated Trading Systems 

specified by the Clearing House in respect of each such 

RepoClear Dealer pursuant to which the Clearing House 

becomes a party to RepoClear Contracts or RepoClear Term 

£GC Contracts, as the case may be, in accordance with the 

terms of the RepoClear Dealer Clearing Agreement and 

Regulation 19

"Register of SwapClear 

Dealers"

means the register which lists SwapClear Dealers regarded 

by the Clearing House as for the time being eligible to submit 

contracts for registration as SwapClear Contracts by the 

Clearing House

"Registration Time"

(i) in respect of SwapClear Contracts, shall have the 

meaning given in Regulation 55(f);

(ii) in respect of Listed Interest Rates Rates Contracts,

shall have the meaning given in the Procedures; and 

(iii) in respect of RepoClear Contracts, RepoClear Term 

£GC Contracts, EquityClear Contracts and ForexClear 

Contracts, shall have the meaning given in the Procedures, 

in each case, subject to Regulation 16(e)

"Regulations" means the Clearing House’s General Regulations, Default 

Rules and Clearing House Settlement Finality Regulations, 

from time to time in force

"Regulatory Body" means the Bank of England, the Secretary of State, the 

Prudential Regulation Authority, the Financial Conduct 

Authority or professional body designated under Part XX of 

the Financial Services and Markets Act 2000 or other body 

given regulatory powers under that Act, the Commodity 

Futures Trading Commission of the United States (CFTC) or 

any other body or authority, in each case, that has jurisdiction 

to exercise in relation to the provision or use of clearing 

services a regulatory or supervisory function over the 

Clearing House and/or, in respect of a Clearing Member, the 

relevant Clearing Member under the laws of the United 

Kingdom, the United States or any other applicable 

jurisdiction
Clearing House: General Regulations

- 103-

NovemberJulyFebruary 2023

REGULATION 16 REGISTRATION

(a) The Clearing House shall not register an original exchange contract in the name of a 

Member unless such contract has been confirmed or deemed confirmed pursuant to 

Regulation 12, 14 or 27 by or on behalf of a Member as a buyer and a Member as a 

seller who thereby have consented to such contract being registered in his name. For 

the avoidance of doubt, the same Member may act in a capacity of seller and buyer in 

respect of such registration of a contract. The Clearing House shall register a contract 

in the name of a Member which is a Co-operating Clearing House in accordance with 

the terms of any agreement made with the Co-operating Clearing House and none of 

the following paragraphs shall apply in respect of a Member which is a Co-operating 

Clearing House.

(b) Where the Procedures so provide the Clearing House may require the Members in 

whose names one or more contracts are to be registered to transfer Collateral to the 

Clearing House in respect of their initial and variation margin obligations as a condition 

of registration of such contract or contracts, and such Collateral shall be transferred to 

the Clearing House in accordance with Regulation 20 and, if applicable, the SwapClear 

Regulations, the RepoClear Regulations, the EquityClear Regulations, the ForexClear 

Regulations and the Listed Interest Rates Regulations.

(c) The Clearing House may decline to register a contract in the name of a Member where 

it considers such action advisable for its own protection or the protection of the relevant 

market. The Clearing House may, without assigning any reason, make the registration 

of any contract subject to any conditions stipulated by the Clearing House including, 

without limitation, the transfer of sufficient Collateral by both Members in whose name 

any such contract is to be registered.

(d) No original exchange contract for a commodity shall be registered in the name of a 

Member who is not entitled under Exchange Rules to have original exchange contracts 

for such commodity registered in his name.

(e) The Clearing House shall be deemed to register a Contract in the name of a Member a

Contract n original contract or RepoClear Transaction at the Registration Time in 

respect of such the relevant type of Contract, provided that, in the case of a Contract 

registered by the Clearing House pursuant to Rule 6(a) of the Default Rules, the 

Registration Time shall be deemed to be the time chosen by the Clearing House 

whereupon this Regulation 16 shall take effect.

(f) Without prejudice to the Clearing House’s rights under paragraph (g) of this Regulation, 

a Clearing Member shall be bound by a Contract registered in its name pursuant to the 

presentation of particulars of an Exchange Transaction, an OTC Transaction, an 

EquityClear Novation Transaction, or a Listed Interest Rates Novation Transaction, as 

the case may be, by him or on his behalf, including: (i) in the case of a RepoClear 

Transaction or RepoClear Term £GC Transaction, where such particulars are presented 

by a RepoClear Dealer with whom it is party to a RepoClear Dealer Clearing 

Agreement; (ii) in the case of a ForexClear Transaction, where such particulars are 

presented by a ForexClear Dealer with whom it is party to a FDC Agreement;(iii) in 

the case of an EquityClear Novation Transaction, where such particulars are presented

by an NCP; and (v) in the case of a Listed Interest Rates Novation Transaction, where 

such particulars are presented by an NCP. 
 

LCH | 10 Paternoster Square | London EC4M 7LS | T: +44 (0)20 7426 7000 | F: +44 (0)20 7426 7001 | lch.com

LCH Group Holdings Limited | LCH Limited | Banque Centrale de Compensation | LCH.Clearnet LLC

LCH Group Holdings Limited. Registered in England No. 4743602 Registered Office: 10 Paternoster Square, London, EC4M 7LS

RESTRICTED - EXTERNAL

Appendix VI

Procedure Section 2C (SwapClear Clearing Service) – Registration Time
CORPORATE

LCH LIMITED 

PROCEDURES SECTION 2C 

SWAPCLEAR CLEARING SERVICE 
Clearing House Procedures SwapClear 

Service 

LCH Limited © 2023 - 15 - NovemberJulyne 2023

received properly reflect the trade entered into by the relevant Executing Parties 

or that the Trading Venue is correctly applying the format messages or 

classifications that the Clearing House has prescribed.

The Clearing House accepts no liability for any error within or corruption of 

any data sent by a Trading Venue to the Clearing House or to a SwapClear 

Clearing Member or any delay in or failure of the transmission of such data to 

the Clearing House. In the event that the Clearing House registers any 

SwapClear Contract on the basis of incorrect or corrupted data sent to it by a 

Trading Venue and accepted (whether automatically or manually, as applicable) 

by a SwapClear Clearing Member, the SwapClear Clearing Member concerned 

shall be bound by the terms of such SwapClear Contract. The Clearing House 

shall use its reasonable endeavours to assist the relevant SwapClear Clearing 

Member(s) in re-registering the trade on the correct basis but the Clearing House 

shall not be liable to a SwapClear Clearing Member or to any other party with 

regard to the registration (or lack of registration or re-registration) of any such 

SwapClear Contract.

1.3.5 Registration of New Trades

The following section does not apply to Backloaded Trades, which are dealt 

with in section 1.3.6 below.

Prior to it registering a SwapClear Contract resulting from a SwapClear 

Transaction other than a Sub-Block Trading Venue Transaction, the Clearing 

House will require the SwapClear Clearing Member in whose name such 

SwapClear Contract is to be registered to transfer to the Clearing House 

adequate Collateral in respect of initial margin requirements, variation margin 

requirements, and/or the settlement payment obligations (as applicable) relating 

to such Contract as a precondition to registration (taking into account any Client 

Buffer and/or SwapClear Tolerance, if any). In accordance with Regulation 

55(e)(iv) (Registration of SwapClear Contracts), a SwapClear Clearing 

Member becomes obligated to transfer such Collateral (taking into account any 

Client Buffer and/or SwapClear Tolerance, if any) to the Clearing House at the 

time when the relevant SwapClear Transaction (that is not a Sub-Block Trading 

Venue Transaction) has been submitted or deemed to be submitted (as 

applicable) by the SwapClear Clearing Member and such SwapClear Clearing 

Member shall transfer such Collateral to the Clearing House prior to registration

of the resulting SwapClear Contract. In respect of a SwapClear Contract 

resulting from a SwapClear Transaction that is a Sub-Block Trading Venue 

Transaction, the SwapClear Clearing Member in whose name such SwapClear 

Contract is registered shall transfer to the Clearing House sufficient Collateral 

in respect of such SwapClear Contract at such time after the registration of such 

SwapClear Contract as the Clearing House shall require.

Notwithstanding the foregoing (i) if the Clearing House registers a SwapClear 

Contract resulting from a SwapClear Transaction that is not a Sub-Block

Trading Venue Transaction where one or both of the relevant SwapClear 

Clearing Members has not provided sufficient Collateral prior to registration, 

the SwapClear Clearing Members shall be bound by the terms of the SwapClear 

Contract relating thereto arising under Regulation 55 and any other applicable 
Clearing House Procedures SwapClear 

Service 

LCH Limited © 2023 - 16 - NovemberJulyne 2023

provision of the Rulebook, and (ii) if the Clearing House rejects a SwapClear 

Transaction that is a Sub-Block Trading Venue Transaction for reasons of 

insufficient Collateral, the Clearing House shall not be liable to any SwapClear 

Clearing Member or anyone else with regard to the registration (or lack of 

registration or re-registration) of any such SwapClear Transaction.

Upon a SwapClear Transaction being submitted to the Clearing House for 

registration, the Clearing House will determine whether to accept or reject the 

SwapClear Transaction within the required timeframe under all Applicable 

Law.

Where the Clearing House determines to accept the SwapClear Transaction, 

registration shall occur immediately and the SwapClear Transaction shall be 

automatically replaced with (as applicable) (i) two separate SwapClear

Contracts, one between the relevant SwapClear Clearing Member and the 

Clearing House and the other between the same or another SwapClear Clearing 

Member and the Clearing House, or (ii) one SwapClear Contract between the 

relevant SwapClear Clearing Member and the Clearing House and one FCM 

SwapClear Contract between the relevant FCM Clearing Member and the 

Clearing House. The time of registration of a SwapClear Contract shall be when 

registration of such SwapClear Contract occurs as described under this Section

1.3.51 above (the “Registration Time”). The SwapClear clearing system will 

respond, after processing, with a message confirming the registration. . AThe

registration notification message will be sent using the SwapClear Clearing 

Member reporting system and/or the FCM Clearing Member reporting system 

(as applicable) (including by way of the originating Approved Trade Source 

System). The definitive report of a registered SwapClear Contract will be 

shown within the SwapClear Clearing Member reporting system (see Section

1.1.3) on the SwapClear Clearing Member reporting account.

Non-Standard Fixing Offsets for SwapClear Transactions

SwapClear Clearing Members may submit for registration SwapClear 

Transactions that are OIS transactions with non-standard fixing offsets of [-1 to 

-10] Business Days, where the fixing for any Business Day ‘i’ in an interest 

period is equal to the fixing in respect of the Business Day falling [-1 to 10] 

Business Days prior to such day ‘i’. For the avoidance of doubt, SwapClear 

Contracts registered as OIS transactions with non-standard fixing offsets will 

retain the underlying set of compounding coupon sub-periods and their 

respective weights.

Open Access

The Clearing House provides access to Approved Trade Source Systems, 

Trading Venues and Approved Compression Services Providers on an open and 

non-discriminatory basis.

1.3.6 Backloading of Existing Trades

A SwapClear Transaction that has a Trade Date of greater than ten calendar 

days prior to the date of presentation of such SwapClear Transaction to the 
 

LCH | 10 Paternoster Square | London EC4M 7LS | T: +44 (0)20 7426 7000 | F: +44 (0)20 7426 7001 | lch.com

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LCH Group Holdings Limited. Registered in England No. 4743602 Registered Office: 10 Paternoster Square, London, EC4M 7LS

RESTRICTED - EXTERNAL

Appendix VII

Procedure Section 2I (ForexClear Clearing Service) – Registration Time
CORPORATE

LCH LIMITED

PROCEDURES SECTION 2I

FOREXCLEAR CLEARING SERVICE
Clearing House Procedures ForexClear Service 

LCH Limited © 2023 - 5 - NovemberJune 2023

CORPORATE

Individual Segregated Account of the FXCCM will map onto 

one such segregated sub-account in the client "C" positionkeeping account and one such segregated sub-account in the 

client "C" collateral account, each Indirect Gross Account of 

the FXCCM will map onto one such segregated sub-account in 

the client "C" position-keeping account and one such 

segregated sub-account in the client "C" collateral account, and 

each Omnibus Segregated Account will map onto one such 

segregated sub-account in the client "C" position-keeping 

account and one such segregated sub-account in the client "C" 

collateral account. 

In the case of Omnibus Gross Segregated Accounts, the relevant 

segregated sub-accounts of the "C" position-keeping account and 

the client "C" collateral account will be further segregated into 

sub-accounts for each Omnibus Gross Segregated Clearing Client 

or, where applicable, a group of Combined Omnibus Gross 

Segregated Clearing Clients together.

In the case of Indirect Gross Accounts, the relevant segregated 

sub-accounts of the client "C" position-keeping account will be 

further segregated into position-keeping sub-accounts for each 

Indirect Gross Sub-Account (relating to each Indirect Clearing 

Client).

1.2.4 Branches

(a) Submission of a static data form to LCH's Onboarding department by 

an FXCCM will also allow an FXCCM to be provided with one or 

more sub-accounts for any branch of that FXCCM (for positionkeeping purposes) within that FXCCM's "H" position-keeping account.

(b) Because the single account reflects the consolidated balances and 

liabilities of the FXCCM, the balances and liabilities associated with 

ForexClear Transactions submitted by FXDs and/or per branch will be 

provided as an estimate (if applicable).

(c) Where a ForexClear Transaction is presented for clearing by a branch 

of an FXCCM, it is deemed to have been presented by, and in the name 

of, the relevant FXCCM.

1.2.5 Novation and Registration

(a) A ForexClear Transaction must satisfy the applicable ForexClear 

Eligibility Criteria (set out in the Product Specific Contract Terms and 

Eligibility Criteria Manual as published on the Clearing House's 

website from time to time) at the Registration Time. Upon a 

ForexClear Transaction being submitted to the Clearing House for 

registration, the Clearing House will determine whether to accept or 

reject the ForexClear Transaction within the required timeframe under 

Applicable Law. Where the Clearing House determines to accept the 
Clearing House Procedures ForexClear Service 

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ForexClear Transaction, registration shall occur immediately and the 

ForexClear Transaction shall be automatically replaced with (as 

applicable) (i) two separate ForexClear Contracts, one between the 

relevant FXCCM and the Clearing House and the other between the 

same or another FXCCM and the Clearing House, or (ii) one 

ForexClear Contract between the relevant FXCCM and the Clearing 

House and one FCM ForexClear Contract between the relevant FCM 

Clearing Member and the Clearing House. The time of registration of a 

ForexClear Contract shall be when registration of such ForexClear 

Contract occurs as described under this Section 1.2.5(a)(the 

“Registration Time”).

(b) Prior to and as a condition to the registration of a ForexClear Contract, 

an FXCCM must transfer to the Clearing House all required Collateral 

in respect of its Liabilities or estimated Liabilities (as applicable, and 

taking into account MER Buffer and/or ForexClear Tolerance, if any).

(c) If an FXCCM has not transferred sufficient Collateral in respect of its 

Liabilities or estimated Liabilities to the Clearing House (taking into 

account MER Buffer and/or ForexClear Tolerance, if any) at the time 

of the relevant Incremental Risk Check (as defined herein), then,

subject to Section 1.3.3(b)(ii), such ForexClear Transaction will be 

rejected.

(d) Notwithstanding paragraph (c) above, if (i) the Clearing House 

registers a ForexClear Contract resulting from a ForexClear 

Transaction where one or both of the relevant FXCCMs has not 

provided sufficient Collateral with respect to its Liabilities or estimated 

Liabilities prior to registration, the FXCCMs shall be bound by the 

terms of the relevant ForexClear Contract(s) and (ii) if the Clearing 

House rejects a ForexClear Transaction for reasons of insufficient 

Collateral, the Clearing House shall not be liable to any FXCCM or 

any other person in connection with the rejection of such ForexClear 

Transaction.

(e) Once a ForexClear Transaction has passed the Validation Checks (as 

defined in Section 1.3.3(a)) and the Clearing House has determined to 

accept the ForexClear Transaction for registration, the Clearing House 

will send a message confirming the registration of the ForexClear 

Transaction as two ForexClear Contracts, including a datestamp of the 

relevant Rregistration Ttime, in accordance with Section 1.3.3(a)(iii). 

For the purpose of the ForexClear Regulations, the time of dispatch of 

such message shall be the "Registration Time" of such ForexClear 

Contracts.

(f) The definitive report of a registered ForexClear Contract will be shown 

on the "All Open Contracts" report issued by ForexClear Reporting.

(g) If an FXCCM is declared a Defaulter, the Clearing House will not 

register any ForexClear Contract in the name of such Defaulter (except 

pursuant to the Default Rules). ForexClear Transactions in respect of 
Clearing House Procedures ForexClear Service 

LCH Limited © 2023 - 7 - NovemberJune 2023

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Non-Defaulting FXCCMs will continue to be registered in accordance 

with, and subject to, the Rulebook.

1.3 Trade Management; Trade Registration Facilitation

1.3.1 Trade Capture: After the execution of a ForexClear Transaction (a "trade"), 

each FXP who is a party to the trade will submit individual instructions to the 

ForexClear Approved Trade Source System for matching and clearing of the 

trade. FXPs are not required to submit a confirmation of any trade presented to 

the Clearing House for registration. Presentation of the matched trade terms 

through the ForexClear Approved Trade Source System will ensure that the 

agreed terms of the trade are recorded.

Once the ForexClear Approved Trade Source System receives the trade 

instructions from the FXPs who are parties to the trade, the ForexClear 

Approved Trade Source System matches both instructions. The ForexClear 

Approved Trade Source System validates the trade using the applicable 

ForexClear Eligibility Criteria and will, if appropriate, present a single 

message containing the names of the FXPs who are parties to the trade and the 

terms of the trade to the Clearing House for registration and clearing (such 

matched trade, a "ForexClear Transaction").

The Clearing House will determine whether to accept or reject the ForexClear 

Transaction within the required timeframe under Applicable Law. In respect 

of a ForexClear Transaction which is:

(a) a Trading Venue Transaction, the Clearing House will notify the 

ForexClear Clearing Members, Trading Venue and, if the originating 

ForexClear Approved Trade Source System is different to the Trading 

Venue, the originating ForexClear Approved Trade Source System of 

registration or rejection of the ForexClear Transaction; or

(b) not a Trading Venue Transaction, the Clearing House will notify the 

ForexClear Clearing Members (via the originating ForexClear 

Approved Trade Source System or ClearLink API) of registration or 

rejection of the ForexClear Transaction,

in each case within the required timeframe under Applicable Law.

1.3.2 The ForexClear Approved Trade Source Systems 

FXCCMs must not submit instructions to the Clearing House for trades which 

will not meet the ForexClear Eligibility Criteria. The Clearing House will 

register a ForexClear Transaction on the basis of the data provided to it by the

ForexClear Approved Trade Source System and has no obligation to verify 

that the details received from the ForexClear Approved Trade Source System

in respect of a ForexClear Transaction properly reflect the trade entered into 

by the relevant FXPs.

Application for ForexClear Approved Trade Source System status shall be 

made in accordance with the policies published from time to time on the 
 

LCH | 10 Paternoster Square | London EC4M 7LS | T: +44 (0)20 7426 7000 | F: +44 (0)20 7426 7001 | lch.com

LCH Group Holdings Limited | LCH Limited | Banque Centrale de Compensation | LCH.Clearnet LLC

LCH Group Holdings Limited. Registered in England No. 4743602 Registered Office: 10 Paternoster Square, London, EC4M 7LS

RESTRICTED - EXTERNAL

Appendix VIII

Procedure Section 2J (Listed Interest Rates Clearing Service) – Registration Time
CORPORATE

LCH LIMITED 

PROCEDURES SECTION 2J 

LISTED INTEREST RATES CLEARING SERVICE 
Clearing House Procedures Listed Interest Rates Service

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Listed Interest Rates Service, will be available on the Clearing House’s 

website.

(c) System Requirements

Clearing Members must have in their office, at a minimum, a PC 

configured to access the clearing system GUI, a printer and back-up 

connectivity to the clearing system as required by the Clearing House.

1.2.2 Member Reporting

The Clearing House makes available appropriate clearing information via 

reports, real-time confirmations and other means. Full details are contained in 

the relevant Service Description documentation.

1.2.3 Clearing House Reporting

The Clearing House (acting, where applicable, through the entity to which it has 

elected to delegate the relevant reporting obligation) shall report to a trade 

repository or similar body the details of a Listed Interest Rates Contract and any 

modification or termination of such contract without duplication and no later 

than the working day following the conclusion, modification or termination of 

such contract, in line with the requirements of Applicable Law.

1.2.4 Static Data

Prior to presentation of any Listed Interest Rates Novation Transaction or Rates 

Exchange Match for registration as a Listed Interest Rates Contract, a Listed 

Interest Rates Clearing Member is required to provide sufficient information in 

respect of the Rates Exchange from which such Listed Interest Rates Novation 

Transaction or Rates Exchange Match will be presented (“Rates Exchange 

Information”). This applies also to any Listed Interest Rates Eligible Product 

traded pursuant to any agency arrangements permitted by the rules of that Rates 

Exchange.

The format, contents and completion process of the static data form for the 

provision of Rates Exchange Information, in respect of each Rates Exchange, is 

prescribed from time to time by the Clearing House. Copies of the prescribed 

forms, for each Rates Exchange, are available from the Clearing House 

Onboarding Department.

Failure to provide the correct Rates Exchange Information in respect of the 

particular Rates Exchange may result in the rejection of a Listed Interest Rates 

Novation Transaction or Rates Exchange Match.

1.3 Registration

1.3.1 General

Listed Interest Rates Contracts may arise through either a novation or an open 

offer clearing mechanism. 

(a) Novation
Clearing House Procedures Listed Interest Rates Service

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Novation applies to each Listed Interest Rates Eligible Product executed as a 

Listed Interest Rates Novation Transaction on a Rates Exchange. Where a 

Listed Interest Rates Novation Transaction is presented to the Clearing House 

for registration, the Clearing House will determine whether to accept or reject 

the Listed Interest Rates Novation Transaction within the required timeframe 

under all Applicable Law. Where the Clearing House determines to accept the 

Listed Interest Rates Novation Transaction, registration shall occur immediately 

and the Listed Interest Rates Novation Transaction shall be automatically 

replaced with (as applicable) (i) two separate Listed Interest Rates Contracts, 

one between the relevant Listed Interest Rates Clearing Member and the 

Clearing House and the other between the same or another Listed Interest Rates 

Clearing Member and the Clearing House, or (ii) one Listed Interest Rates 

Contract between the relevant Listed Interest Rates Clearing Member and the 

Clearing House and one FCM Listed Interest Rates Contract between the 

relevant FCM Clearing Member and the Clearing House. (such time, the 

“Registration Time”). 

Novation of Listed Interest Rates Novation Transactions is described in greater 

detail in Regulation 12 and Regulation 98.

The time of registration of a Listed Interest Rates Contract shall be when 

registration of such Listed Interest Rates Contract occurs as described under 

Section 1.3.1(a) above (the “Registration Time”).

(b) Open Offer

The Clearing House also provides an open offer in respect of Listed Interest 

Rates Eligible Products listed for trading on one or more Rates Exchanges. 

Pursuant to this “open offer”, once the particulars of a Rates Exchange Match 

are presented to the Clearing House, then, subject to the Regulations and the 

Procedures, the Clearing House shall automatically and immediately register 

either (i) two separate Listed Interest Rates Contracts, one between the relevant 

Listed Interest Rates Clearing Member and the Clearing House and the other 

between the same or another Listed Interest Rates Clearing Member and the 

Clearing House, or (ii) one Listed Interest Rates Contract between the relevant 

Listed Interest Rates Clearing Member and the Clearing House and one FCM 

Listed Interest Rates Contract between the relevant FCM Clearing Member and 

the Clearing House. (such time, the Registration Time).

The Clearing House’s open offer arrangements for Rates Exchange Matches are 

described in greater detail in Regulation 97.

The time of registration of a Listed Interest Rates Contract shall be when 

registration of such Listed Interest Rates Contract occurs as described under 

Section 1.3.1(b) above (the “Registration Time”).

1.3.2 Confirmation

Presentation of a Listed Interest Rates Novation Transaction or Rates Exchange 

Match (as applicable) for registration to the Clearing House constitutes 
Clearing House Procedures Listed Interest Rates Service

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immediate confirmation in accordance with the Regulations by the Listed 

Interest Rates Clearing Member in whose name such Listed Interest Rates 

Novation Transaction or Rates Exchange Match (as applicable) is presented. 

However, the Clearing House will only accept for registration, as Listed Interest 

Rates Contracts, the particulars of a Listed Interest Rates Novation Transaction 

or Rates Exchange Match (as applicable) presented by a Rates Exchange in a 

message format and manner acceptable to the Clearing House.

Each Listed Interest Rates Clearing Member authorised to participate in the 

Listed Interest Rates Service must be familiar with the operating procedures and 

deadlines of each Rates Exchange in respect of which it has been approved by 

the Clearing House.

1.3.3 Intra-Day Registration

The Clearing House registers all Listed Interest Rates Contracts on an intra-day 

basis.

1.3.4 Risk Pending Trades

Except as otherwise required by Applicable Law, trades presented to the 

Clearing House for registration can be validated against a number of risk 

parameters, including quantity, price, premium, strike price, trade value or 

mark-to-market profit/loss parameters (“Risk Parameters”). Any trades that

fall outside of the validation parameters will enter a pending state (the “Risk 

Pending Queue”) and require validation by Risk Management before being 

accepted or rejected by the Clearing House.

The Risk Parameter ranges are set by Risk Management and can be amended

during periods of low or high volatility to capture or avoid suspension of trades 

which are within the day’s trading range.

1.3.5 Conditions for Acceptance of Risk Pending Trades

Except as otherwise required by Applicable Law, registration of trades held in 

the Risk Pending Queue is conditional on the transfer of sufficient Collateral to 

the Clearing House. 

If the Clearing House decides that additional Collateral is required it will advise 

the Listed Interest Rates Clearing Member as soon as possible. The currency 

and method of funds transfer, or type of Collateral to be provided, will be 

agreed between the Clearing House and the Listed Interest Rates Clearing 

Member. Only when the Clearing House has received the Collateral or has 

received confirmation from the transferring bank that the cash Collateral has 

been, or is, in the process of being transferred will it accept the pending trade.

The Clearing House will carry out the process of accepting pending trades on an 

hourly basis throughout the day, or more frequently where possible. The 

acceptance process will apply to both sides of a trade at the same time.

It is the responsibility of each Listed Interest Rates Clearing Member to ensure 

that any trades likely to require acceptance are input as early as possible in the 
 

LCH | 10 Paternoster Square | London EC4M 7LS | T: +44 (0)20 7426 7000 | F: +44 (0)20 7426 7001 | lch.com

LCH Group Holdings Limited | LCH Limited | Banque Centrale de Compensation | LCH.Clearnet LLC

LCH Group Holdings Limited. Registered in England No. 4743602 Registered Office: 10 Paternoster Square, London, EC4M 7LS

RESTRICTED - EXTERNAL

Appendix IX

FCM Regulations – Registration Time
CORPORATE

FCM REGULATIONS OF THE CLEARING HOUSE

LCH LIMITED
FCM Regulations

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carries the Transfer Account that will receive the transfer 

of Transferring SwapClear Contracts or Transferring 

ForexClear Contracts and, where applicable, associated 

Collateral held in respect of the Eligible Transferor from a 

Carrying Clearing Member pursuant to FCM Regulation 

46(q) or FCM Regulation 49(r). For the avoidance of 

doubt, where the Transferring SwapClear Contracts or 

Transferring ForexClear Contracts are FCM SwapClear 

Contracts or FCM ForexClear Contracts, respectively: (a) 

an entity that is an FCM Client may also be a Receiving 

Clearing Member, and (b) a Receiving Clearing Member 

that is an FCM Clearing Member may be nominated to 

receive the transfer of Transferring SwapClear Contracts or 

Transferring ForexClear Contracts and Associated 

Collateral Balance from a Carrying Clearing Member that 

is not an FCM Clearing Member pursuant to Regulation 60 

or Regulation 95 of the UK General Regulations (and, for 

the avoidance of doubt, a Carrying Clearing Member may 

be a Receiving Clearing Member, and vice versa).

Capitalized terms used in this definition having the 

meanings set out in the UK General Regulations as 

modified by FCM Regulation 46(q) or FCM Regulation 

49(r).

“Reference Currency 

Buyer”

has the meaning assigned to it in the UK General 

Regulations or FCM Contract Terms, as applicable.

“Reference Currency 

Seller”

has the meaning assigned to it in the UK General 

Regulations or FCM Contract Terms, as applicable.

“Reference Price” means a price (howsoever called) by reference to which an 

FCM Contract is marked to market or valued in accordance 

with the FCM Regulations and FCM Procedures.

“Registration Time” (i) means, in respect of an FCM SwapClear Contract,

shall have the meaning given in the FCM Procedures

subject to FCM Regulation 46(m);

(ii) in respect of an FCM ForexClear Contract, shall have 

the meaning given in the FCM Procedures subject to 

FCM Regulation 49(n); and

(i)(iii) in respect of an FCM Listed Rates Contract,, shall 

have the meaning given in the FCM Procedures

subject to FCM Regulation 52(d).

“Regulatory Body” means the Secretary of State, The Financial Services 

Authority or professional body designated under Part 20 of 

the Financial Services and Markets Act 2000 or other body 

given regulatory powers under that Act, the Bank of 
FCM Regulations

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CHAPTER XII - FCM SWAPCLEAR REGULATIONS

REGULATION 46 REGISTRATION OF FCM SWAPCLEAR CONTRACTS; 

NOVATION AND POST-NOVATION COMPRESSION AND 

DECOMPRESSION; SWAPCLEAR ACCOUNTS; PORTFOLIO TRANSFERS; 

BULK EVENTS

(a) In order for an FCM to register an FCM SwapClear Contract in respect of the 

registration of an FCM SwapClear Transaction, the FCM must be currently approved 

as an FCM Clearing Member pursuant to these FCM Regulations. The Executing 

Parties to such FCM SwapClear Transaction shall be responsible for any give-up or 

other agreement mutually agreed to among the parties with respect to such transactions, 

as applicable. An FCM Clearing Member must present the particulars of an FCM 

SwapClear Transaction for registration as two FCM SwapClear Contracts or one FCM 

SwapClear Contract and one Non-FCM SwapClear Contract (as the case may be) in 

accordance with these FCM Regulations. Each FCM SwapClear Transaction involving 

an FCM Client shall be presented to the Clearing House for registration on behalf of 

such FCM Client by its FCM Clearing Member.

(b) Once an FCM SwapClear Transaction has been presented to the Clearing House, the 

Clearing House shall (where applicable in accordance with paragraph (c) below and 

Section 2.1.3 of the FCM Procedures) request the consent of the relevant FCM Clearing 

Member with whom an FCM SwapClear Contract shall be registered as a result thereof 

to such registration. Upon the FCM Clearing Member providing its consent, such FCM 

SwapClear Transaction shall be deemed to have been submitted (as such term is defined 

in the FCM Procedures) by such FCM Clearing Member to the Clearing House for 

registration. Any such consent shall be provided in accordance with the FCM 

Procedures.

(c) An FCM Clearing Member which has been nominated to clear the FCM Contract 

arising from the registration of an FCM SwapClear Transaction on behalf of a third 

party Executing Party will (only where such FCM SwapClear Transaction is not an 

FCM Trading Venue Transaction) be notified by the Clearing House of such FCM 

SwapClear Transaction and shall choose whether to grant or refuse consent to the 

registration of such FCM SwapClear Transaction and the FCM SwapClear Contract 

resulting from such FCM SwapClear Transaction. Where:

(i) an FCM Clearing Member is an Executing Party to an FCM SwapClear 

Transaction and is to clear an FCM SwapClear Contract resulting from such 

FCM SwapClear Transaction; or

(ii) an FCM SwapClear Transaction is an FCM Eligible Trading Venue Transaction 

in respect of an FCM Clearing Member, and a third party Executing Party to 

such FCM SwapClear Transaction has nominated such FCM Clearing Member 

to clear an FCM SwapClear Contract resulting from such FCM SwapClear 

Transaction,

the consent of that FCM Clearing Member to the registration of the relevant FCM 

SwapClear Contract will occur automatically and without the need for any further 

action by such FCM Clearing Member.
FCM Regulations

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(d) Without prejudice to the Clearing House's rights under paragraph (g) of this FCM 

Regulation 46, an FCM Clearing Member shall be bound by an FCM SwapClear 

Contract registered in its name.

(e) The Clearing House shall register or reject the registration of an FCM SwapClear 

Contract in respect of an FCM SwapClear Transaction presented for registration subject 

to, and in accordance with, these FCM Regulations, the FCM Procedures and all 

Applicable Law, where the following are conditions for registration of an FCM 

SwapClear Contract:

(i) both sides of the relevant FCM SwapClear Transaction have been properly 

presented and submitted for clearing by (or on behalf of) the Executing Parties;

(ii) the relevant FCM SwapClear Transaction meets the FCM SwapClear Product 

Eligibility Criteria prescribed in the FCM Product Specific Contract Terms and 

Eligibility Criteria Manual at the time the particulars of the FCM SwapClear 

Transaction are presented to the Clearing House and continues to meet such 

criteria at the Registration Time;

(iii) each FCM SwapClear Contract resulting from an FCM SwapClear Transaction 

is consented to by the relevant FCM Clearing Member in accordance with 

paragraph (c) above and Section 2.1.3 of the FCM Procedures;

(iv) the applicable FCM Clearing Member has furnished, upon request of the 

Clearing House and in accordance with FCM Regulation 14 and such other 

applicable provisions of the FCM Rulebook, all required Margin in respect of 

such FCM SwapClear Contract prior to registration (taking into account 

SwapClear Tolerance, if any); provided that such Margin need not be furnished 

prior to registration as a condition to the registration of such FCM SwapClear 

Contract where such FCM SwapClear Contract results from an FCM SwapClear 

Transaction that is a Sub-Block Trading Venue Transaction; and

(v) all the conditions applicable (under the terms of the FCM Rulebook or the UK 

General Regulations, as the case may be) for the registration of the Non-FCM 

SwapClear Contract or the other FCM SwapClear Contract (as the case may be) 

deriving from the relevant FCM SwapClear Transaction have been satisfied.

If for any reason in respect of an FCM SwapClear Contract the other corresponding 

FCM SwapClear Contract or Non-FCM SwapClear Contract (as the case may be) is not 

registered by the Clearing House, the Clearing House shall de-register such FCM 

SwapClear Contract and shall not have any liability whatsoever to any FCM Clearing 

Member or to any other person (including any SwapClear Dealer (as such term is 

defined in the UK General Regulations)) in contract, tort (including negligence), trust, 

as a fiduciary or under any other cause of action in respect of any damage, loss, cost or 

expense of whatsoever nature suffered or incurred as a result of such de-registration.

(f) The Clearing House shall be deemed to register an FCM SwapClear Contract, in 

accordance with this FCM Regulation 46 in the name of an FCM Clearing Member, at 

the Registration Ttime prescribed in the FCM Procedures (“Registration Time”). At 
FCM Regulations

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the Registration Time, the FCM Clearing Member, and the FCM Client if applicable, 

will be deemed to be bound by the relevant FCM SwapClear Contract on the terms 

entered into between the FCM Clearing Member and the Clearing House automatically 

and without any further action by such FCM Clearing Member or FCM Client, which 

such terms shall, without limitation, incorporate all applicable terms of these FCM 

Regulations and of Schedule 1 to the FCM Product Specific Contract Terms and 

Eligibility Criteria Manual.

(g) If at any time after registration of an FCM SwapClear Contract, the Clearing House 

determines that the corresponding FCM SwapClear Transaction of which details were 

presented for registration did not, at the Registration Time, meet the FCM SwapClear 

Product Eligibility Criteria in existence at the Registration Time (an “Ineligible FCM 

SwapClear Transaction”), the Clearing House shall, immediately following the next 

margin run following such determination, set aside both FCM SwapClear Contracts (or, 

the FCM SwapClear Contract and the Non-FCM SwapClear Contract, if applicable) 

arising from such Ineligible FCM SwapClear Transaction. Upon an FCM SwapClear 

Contract being set aside under this paragraph (any such FCM SwapClear Contract, an 

“Ineligible FCM SwapClear Contract”): (i) the Clearing House will notify the FCM 

Clearing Member party to such Ineligible FCM SwapClear Contract via the FCM 

Approved Trade Source System through which details of the relevant Ineligible FCM 

SwapClear Transaction were originally presented to the Clearing House that such 

Ineligible FCM SwapClear Contract has been set aside; and (ii) such Ineligible FCM 

SwapClear Contract shall immediately be deemed to be terminated and shall thereafter 

have no force or effect. Where an Ineligible FCM SwapClear Contract is set aside 

pursuant to this paragraph, all payments (including Settlement Payments) (if any) paid 

by the Clearing House or by an FCM Clearing Member (or SwapClear Clearing 

Member, if applicable) in respect of such Ineligible FCM SwapClear Contract up to 

and including the time when such Ineligible FCM SwapClear Contract was set aside 

shall be retained by the receiving party upon termination as a termination payment. 

Without prejudice to FCM Regulation 44 and its obligations under this FCM Regulation 

46, the Clearing House (and each other member of the LCH Group and their respective 

officers, employees and agents) shall have no liability whatsoever to any person arising 

out of or in respect of the registration by it in error or otherwise of an Ineligible FCM 

SwapClear Contract.

(h) Where the FCM Procedures so provide, the Clearing House may require the FCM 

Clearing Members in whose names one or more FCM SwapClear Contracts are to be 

registered to furnish it with Margin as a condition of registration of such FCM 

SwapClear Contract(s), and such Margin shall be furnished to the Clearing House in 

accordance with FCM Regulation 14 and such other applicable provisions in the FCM 

Rulebook.

(i) Notwithstanding anything to the contrary in the FCM Rulebook, the Clearing House 

may decline to register an FCM SwapClear Transaction in the name of an FCM 

Clearing Member where it considers such action advisable for its own protection or the 

protection of the relevant market, provided that the Clearing House may (subject to 

the provisions of the FCM Rulebook) register any FCM SwapClear Contract which 

reduces the risk exposure of the Clearing House and the applicable FCM Clearing 

Member, as determined in the discretion of the Clearing House. The Clearing House 

may, without assigning any reason, make the registration of any FCM SwapClear 
FCM Regulations

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rights and obligations under such FCM SwapClear Transaction which fall due 

for performance on or after the Registration Time;

(ii) each FCM SwapClear Contract registered under FCM Regulation 46(j) above 

shall be governed by the FCM SwapClear Contract Terms as applicable to that 

FCM SwapClear Contract;

(iii) subject to sub-paragraph (ii) above, in respect of the Economic Terms, the FCM 

Clearing Member shall have the same rights against, and owe the same 

obligations to, the Clearing House under the FCM SwapClear Contract as the 

party paying Rate X had and owed in respect of its counterparty under the 

corresponding FCM SwapClear Transaction; and

(iv) subject to sub-paragraph (ii) above, in respect of the Economic Terms, the FCM 

Clearing Member shall have the same rights against, and owe the same 

obligations to, the Clearing House under the FCM SwapClear Contract to which 

it is party as the party paying Rate Y had and owed in respect of its counterparty 

under the corresponding FCM SwapClear Transaction.

In subparagraphs (iii) and (iv) above, a reference to the “same” rights or obligations is 

a reference to rights or obligations, falling due for exercise or performance after the 

Registration Time, and which are the same in nature and character as the rights or 

obligations arising from the Economic Terms of the corresponding FCM SwapClear 

Transaction (it being assumed, for this purpose, that such FCM SwapClear Transaction 

was a legal, valid, binding and enforceable obligation of the parties thereto and that the 

Economic Terms thereof were as presented to the Clearing House for registration), 

notwithstanding the change in the person entitled to them or obliged to perform them, 

and subject to any change thereto as a result of the operation of the Standard Terms.

(l) If an FCM SwapClear Transaction is revoked, avoided or otherwise declared invalid 

for any reason after particulars of it have been accepted by the Clearing House for 

registration that revocation, avoidance or invalidity shall not affect any FCM 

SwapClear Contract arising under this FCM Regulation 46 or any other applicable 

provision of the FCM Rulebook.

(m) In the case of an FCM SwapClear Contract registered by the Clearing House pursuant 

to Rrule 6(a) of the Default Rules, the Registration Time shall be deemed to be the time 

chosen by the Clearing House whereupon this FCM Regulation 46 shall take effect.

(n) Compression. 

(i) The Clearing House may from time to time determine FCM SwapClear 

Contracts that are eligible for compression or decompression in accordance with 

this Regulation 46(n) and the FCM Procedures (such FCM SwapClear 

Contracts, “Eligible FCM SwapClear Compression Contracts”), which may 

include FCM SwapClear Contracts that, inter alia, have substantially similar 

economic terms.

(ii) An FCM Clearing Member may submit a request to the Clearing House, in 

accordance with the FCM Procedures, (1) to compress and combine all such 

FCM SwapClear Contracts that are either (i) registered on the FCM Clearing 
FCM Regulations

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Clearing House as the Reference Currency Buyer and the Non-FCM Clearing 

Member as the Reference Currency Seller (or vice versa as applicable); or

(ii) in the case where each Executing Party will clear its respective side of such 

FCM ForexClear Transaction either through an FCM Clearing Member or 

directly itself as an FCM Clearing Member, as two FCM ForexClear Contracts 

pursuant to these FCM Regulations where each relevant FCM ForexClear 

Contract is registered between the relevant FCM Clearing Member and the 

Clearing House, with one such FCM Clearing Member as the Reference 

Currency Buyer, and the Clearing House as the Reference Currency Seller, and 

the other FCM Clearing Member as the Reference Currency Seller and the 

Clearing House as the Reference Currency Buyer.

(iii) In each of the foregoing cases in paragraphs (i) and (ii) above, to the extent the 

FCM ForexClear Contract has been entered into by an FCM Clearing Member 

on behalf of an FCM Client, each FCM Clearing Member will be the agent of 

its FCM Client, but will nevertheless remain fully liable to the Clearing House 

for any and all amounts due to the Clearing House in connection with any FCM 

ForexClear Contract cleared on behalf of its FCM Client.

(l) Effect of Registration of FCM ForexClear Transactions. With effect from the 

registration of an FCM ForexClear Transaction in accordance with FCM Regulation 

49(k):

(i) Such FCM ForexClear Transaction shall be extinguished and replaced by the 

corresponding FCM ForexClear Contracts (or if applicable, the corresponding 

FCM ForexClear Contract and Non-FCM ForexClear Contract), and the parties 

to such FCM ForexClear Transaction shall be released and discharged from all 

rights and obligations under such FCM ForexClear Transaction which fall due 

for performance on or after the Registration Time.

(ii) Each FCM ForexClear Contract registered under FCM Regulation 49(k) shall 

be governed by the FCM ForexClear Contract Terms as applicable to that FCM 

ForexClear Contract.

(iii) Subject to sub-paragraph (ii) above, in respect of the Economic Terms, an FCM 

Clearing Member (or clearing on behalf of a person) that is the Reference 

Currency Buyer under an FCM ForexClear Transaction shall have the same 

rights against, and owe the same obligations to, the Clearing House under the 

corresponding FCM ForexClear Contract registered by it in respect of such 

FCM ForexClear Transaction; and

(iv) Subject to sub-paragraph (ii) above, in respect of the Economic Terms, an FCM 

Clearing Member (or clearing on behalf of a person) that is the Reference 

Currency Seller under an FCM ForexClear Transaction shall have the same 

rights against, and owe the same obligations to, the Clearing House under the 

corresponding FCM ForexClear Contract registered by it in respect of such 

FCM ForexClear Transaction.

In sub-clauses (iii) and (iv) above, a reference to the “same” rights or obligations is a 

reference to rights or obligations, falling due for exercise or performance after the 
FCM Regulations

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Registration Time, and which are the same in nature and character as the rights or 

obligations arising from the Economic Terms of the corresponding FCM ForexClear 

Transaction (it being assumed, for this purpose, that such FCM ForexClear Transaction 

was a legal, valid, binding and enforceable obligation of the parties thereto and that the 

Economic Terms thereof were as presented to the Clearing House for registration), 

notwithstanding the change in the person entitled to them or obliged to perform them, 

and subject to any change thereto as a result of the operation of the Standard Terms.

For the avoidance of doubt, following the occurrence of an FCM Client Default, the

FCM Clearing Member is permitted, but not obligated, to act in a capacity other than

as agent of the FCM Client, which may include acting as principal (e.g., with respect to

any FCM ForexClear Contracts registered in accordance with Section 2.2.20 of the

FCM Procedures or any other actions permitted under FCM Regulation 13(d)), even

though the FCM Clearing Member may be entitled to a right of indemnity from, or be

required to account for any gains to, the FCM Client in respect of such FCM ForexClear

Contract.

(m) If an FCM ForexClear Transaction is revoked, avoided or otherwise declared invalid 

for any reason after particulars of it have been accepted by the Clearing House for 

registration that revocation, avoidance or invalidity shall not affect any FCM 

ForexClear Contract arising under this FCM Regulation 49 or any other applicable 

provision of the FCM Rulebook.

(n) In the case of an FCM ForexClear Contract registered by the Clearing House pursuant 

to Rrule 6(a) of the Default Rules, the Registration Time shall be deemed to be the time 

chosen by the Clearing House whereupon this FCM Regulation 49 shall take effect.

(o) Compression.

(i) The Clearing House may from time to time determine FCM ForexClear 

Contracts that are eligible for compression in accordance with this FCM 

Regulation 49(o) and the FCM Procedures (such FCM ForexClear Contracts, 

“Eligible FCM ForexClear Compression Contracts”), which may include 

FCM ForexClear Contracts that, inter alia, have substantially similar economic 

terms.

(ii) An FCM Clearing Member may submit a request to the Clearing House, in 

accordance with the FCM Procedures, to compress and combine all such FCM 

ForexClear Contracts (i) registered on the FCM Clearing Member's own behalf, 

or (ii) registered on behalf of the same FCM Client and in the same FCM Client 

Sub-Account.

(iii) The Clearing House will effect the compression of Eligible FCM ForexClear 

Compression Contracts by terminating the relevant Eligible FCM ForexClear 

Compression Contracts and, in some instances, compressing them into one or 

more FCM ForexClear Contracts having a net future cash flow equal to the net 

future cash flow of the original Eligible FCM ForexClear Compression 

Contracts. 

(iv) For the avoidance of doubt, the Clearing House may determine FCM 

ForexClear Contracts are Eligible FCM ForexClear Compression Contracts
FCM Regulations

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CHAPTER XIV - FCM LISTED INTEREST RATES REGULATIONS

REGULATION 52 REGISTRATION OF FCM LISTED INTEREST RATES 

CONTRACTS

(a) In order to utilize the FCM Listed Interest Rates Clearing Services, an FCM Listed 

Interest Rates Clearing Member must cause particulars of each relevant Rates Exchange 

Match and each relevant FCM Listed Interest Rates Novation Transaction to be 

presented for registration as an FCM Listed Interest Rates Contract, through such means 

as shall be prescribed by the FCM Procedures.

(b) An FCM Listed Interest Rates Clearing Member shall not allow the presentation for 

registration of a match which is not a Rates Exchange Match or a transaction which is 

not an FCM Listed Interest Rates Novation Transaction in connection with the FCM 

Listed Interest Rates Clearing Service.

(c) The Clearing House may decline to register an FCM Listed Interest Rates Contract in 

the name of an FCM Listed Interest Rates Clearing Member where it considers such 

action advisable for its own protection or the protection of the relevant market. The 

Clearing House may, without assigning any reason, make the registration of any FCM 

Listed Interest Rates Contract subject to any conditions stipulated by the Clearing 

House including the furnishing of Margin by the FCM Listed Interest Rates Clearing 

Member(s) in whose name any such FCM Listed Interest Rates Contract is to be 

registered.

(d) The Clearing House shall register an FCM Listed Interest Rates Contract in respect of 

a Rates Exchange Match or an FCM Listed Interest Rates Novation Transaction in the 

name of an FCM Listed Interest Rates Clearing Member at the Registration Time for 

that type of FCM Listed Interest Rates Contract in accordance with FCM Regulation 

53 or FCM Regulation 54, as applicable, provided that, in the case of an FCM Listed 

Interest Rates Contract registered by the Clearing House pursuant to Rule 6(a) of the 

Default Rules, the Registration Time shall be deemed to be the time chosen by the 

Clearing House whereupon this FCM Regulation 52 will take effect.

Without prejudice to the Clearing House’s rights under paragraph (g) an FCM Listed 

Interest Rates Clearing Member shall be bound by an FCM Listed Interest Rates 

Contract registered in its name pursuant to the presentation of particulars of a Rates

Exchange Match or of an FCM Listed Interest Rates Novation Transaction.

(e) Without prejudice to the Clearing House’s rights under paragraph (f), a Rates Exchange 

Match or FCM Listed Interest Rates Novation Transaction presented for registration 

must meet the eligibility criteria prescribed in the FCM Procedures (and these FCM 

Regulations) at the time such particulars are presented to the Clearing House and must 

continue to meet such criteria at all times thereafter up to and including the Registration 

Time in order to be registered as two FCM Listed Interest Rates Contracts (or, if 

applicable, one FCM Listed Interest Rates Contract and one Non-FCM Listed Interest 

Rates Contract). An FCM Listed Interest Rates Clearing Member may not revoke, 

cancel or transfer a Rates Exchange Match or an FCM Listed Interest Rates Novation 

Transaction unless permitted by the FCM Rulebook and FCM Procedures or with the 

consent of the Clearing House.