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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 Limited. Registered in England No. 25932 Registered Office: 10 Paternoster Square, London, EC4M 7LS

VIA CFTC PORTAL

31 August 2023 

Mr. Christopher Kirkpatrick

Commodity Futures Trading Commission

1155 21st Street NW

Three Lafayette Centre

Washington, DC 20581

LCH Limited Self-Certification: ForexClear Smart Clearing

Dear Mr. Kirkpatrick, 

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

(“LCH”), a derivatives clearing organization registered with the CFTC, is submitting for selfcertification changes to its Rulebook required to implement a new ForexClear initiative called 

“Smart Clearing”, that will introduce a workflow to enable selective bulk clearing of FX Forwards

transactions. 

Part I: Explanation and Analysis

The ForexClear initiative will introduce a workflow to enable selective bulk clearing of mainly 

existing bilateral FX Forwards1, and newly-executed FX Forwards transactions. The proposed 

solution will increase collateral efficiency compared to trades cleared individually. 

The solution will enhance the way eligible FX Forwards trades will be submitted to and accepted 

by ForexClear. As part of the proposal, third party vendors called Approved Trade Selection 

Providers (each, an ATSP and collectively, ATSPs) will be chosen to select and submit trades for 

clearing on behalf of ForexClear’s clearing members. ATSPs will need to validate the chosen trades 

with ForexClear before submitting the optimised portfolio for clearing. In order to do so, ForexClear 

will check the proposed trades for eligibility and estimate their potential margin impact and 

settlement exposures. This information will be communicated to each participating clearing 

member.

Novation of selected transactions will be performed in bulk, both on a collateral sufficiency basis, 

and an all or nothing basis. Clearing members will have the final decision on clearing the proposed 

package of trades. All trades submitted by ATSPs will be booked via a dedicated bulk loading trade 

registration flow and once trades are registered, they will follow the usual BAU process for trade 

1 FX Forwards are eligible for clearing but not subject to IM exchange under Uncleared Margin Rules (UMR).
management. The bulk loading trade registration workflow will take place at a time specified by 

LCH.

The project is expected to go live on or after 25 September 2023 and the Rulebook will be updated 

accordingly at that time.

Part II: Description of Rule Changes

The Rulebook changes that accompany this initiative are set out below and are enclosed in blackline form in the Appendices. 

Several definitions have been added in the General Regulations under the Definitions Section, 

such as ‘ATSP’ on p4, which explains which body will submit trades for clearing on behalf of 

ForexClear’s clearing members in the enhanced workflow. Other terminology has been added, 

including: ‘Actual ATSP Transaction’ on p1, and ‘Theoretical ATSP Transaction’ on p80, which

explain what type of products will be eligible for clearing in a Smart Clearing run.

The Procedures Section 2I for non-FCM clearing members, under Section 1.3 Trade Management

and further sub-section 1.3.3 Backloading, explains the steps on how the backloading cycle of 

submitting relevant trade packages to ForexClear by ATSPs, and then registering the final 

transaction by ForexClear, will work in practice. 

Separately, LCH will make minor updates to wording and definitions in the FCM Procedures and 

FCM Regulations, respectively, that are unrelated to the Smart Clearing run introduced by 

ForexClear.

The text of the changes is attached hereto as:

Appendix I: General Regulations

Appendix II: Procedure Section 2I [ForexClear Clearing Service]

Appendix III: FCM Procedures 

Appendix IV: FCM Regulations

Part III: Core Principles Compliance

LCH has reviewed the proposed changes against the requirements of the Core Principles and finds 

it will continue to comply with all the requirements and standards set forth therein. Specifically, 

these rule changes have relevance to Core Principle C (§39.12) (Participant and Product Eligibility)

and Core Principle D (§39.13) (Risk Management) under the CFTC regulations.

Changes described in this filing will not impact LCH’s ability to meet the objectives of Core Principle 

C (§39.12), as ForexClear will continue to maintain fair and open access to existing and prospective 

clearing members and have appropriate requirements and restrictions in place for determining the 

eligibility of agreements, contracts or transactions that are sent for clearing. In addition, and in line 

with the CFTC STP requirements set out under §39.12(b)(7)(B) and complemented by separate 

guidance, LCH’s rules prescribe that it shall register or reject transactions submitted for clearing as 

quickly as would be technologically practicable.

Core Principle D (§39.13) is satisfied since trades will follow the LCH’s usual BAU process for trade 

management once registered, including by managing the risks through the use of appropriate tools 

and procedures
LCH also engages its Clearing Members in the design and testing of new products and services at 

an early stage through working groups, including for that of ForexClear Smart Clearing.

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 CFTC, 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 aleksandra.wojcik@lseg.com. 

Yours sincerely, 

Aleksandra Wojcik

Compliance Officer, LCH Limited
Appendix I: General Regulations
Clearing House: General Regulations

- iGENERAL REGULATIONS OF

LCH LIMITED
Clearing House: General Regulations

- 1-

REGULATION 1 DEFINITIONS

In these Regulations and the Procedures, except where the context otherwise requires, the 

following words and expressions shall have the following meanings:

"Account Balance" means, in relation to a Relevant Client Clearing Business of 

a Clearing Member, an Individual Segregated Account 

Balance, an Indirect Gross Account Balance, a Custodial 

Segregated Account Balance or an Omnibus Segregated 

Account Balance

"Actual ATSP Transaction"

"ACSP Compression Cycle"

means a ForexClear Deliverable Forward Transaction or 

ForexClear Swap Transaction that is executed to (and does) 

mirror the terms of a Theoretical ATSP Transaction 

means a Multilateral Compression Cycle established by the 

Clearing House and facilitated by an ACSP nominated by the 

Clearing House, which shall be open to participation by 

SwapClear Clearing Members either on their own account or 

with respect to a SwapClear Clearing Client in accordance 

with the provisions of Regulation 56 and relevant 

Compression Documentation

"Account Information 

Documents"

means the documents called "LCH Account Structures under 

EMIR" and "Fees for EMIR Segregation Accounts", as 

published by the Clearing House on its website and made 

available to Clearing Members and Clearing Clients upon 

request

“Affected ForexClear Option 

Clearing Member”

has the meaning assigned to it in Regulation 101

"Affiliated Client Omnibus 

Net Segregated Account"

means, in relation to a Relevant Client Clearing Business, an 

account opened within the Clearing House by a Clearing 

Member on behalf of a group of Affiliated Omnibus 

Segregated Clearing Clients which is designated by the 

Clearing House as an Affiliated Client Omnibus Net 

Segregated Account

"Affiliated Client Omnibus 

Segregated Account"

means, in relation to a Relevant Client Clearing Business, (i) 

an Affiliated Client Omnibus Net Segregated Account or (ii) 

an Omnibus Gross Segregated Account opened on behalf of 

a group of Affiliated Omnibus Segregated Clearing Clients

"Affiliated Omnibus Net 

Segregated Clearing Clients"

means Affiliated Omnibus Segregated Clearing Clients in 

respect of whom the relevant Clearing Member clears 

Contracts with the Clearing House in an Affiliated Client 

Omnibus Net Segregated Account

June 2023
Clearing House: General Regulations

- 2-

"Affiliated Omnibus 

Segregated Clearing Clients"

means certain Omnibus Segregated Clearing Clients of a 

Clearing Member (i) whose identities have been recorded by 

the Onboarding department of the Clearing House and who 

are grouped together in a single Omnibus Segregated 

Account of the Clearing Member (ii) who are known to each 

other and (iii) who have elected to be grouped together in an 

Omnibus Segregated Account due to the existence of a 

common relationship between them (whether structural, 

economic, legal and/or otherwise) which is above and 

beyond the fact that they are grouped together in the relevant 

Omnibus Segregated Account.

"Agent Member" has the meaning assigned to it in the SC Regulations

"Aggregate Excess Loss" means, in relation to a Default, the aggregate amount of all 

Excess Losses attributable to all types of Relevant Business 

in which the Defaulter was engaged.

"Aggregate Omnibus Client 

Clearing Entitlement"

has the meaning ascribed to it in Clause 9.3 of the Client 

Clearing Annex to the Default Rules

"Agreement Notice"

"Alternative Data"

has the meaning assigned to it in Section 1.3.3(e) of Section 

2I of the Procedures

has the meaning assigned to it in Section 2C1.27.2 of the 

Procedures

"Annex" means the Client Clearing Annex, the Rates Service DMP 

Annex, the RepoClear DMP Annex and the ForexClear 

DMP Annex

"Applicable Law" means any applicable statute, law, ordinance, regulation, rule 

and other instruments in force from time to time, including 

the rules, codes or practice of a Governmental Authority or 

Regulatory Body.

June 2023
Clearing House: General Regulations

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"Approved Trade Source 

System"

means a system or facility, such as an exchange, a clearing 

house, a swap execution facility, a designated contract 

market, trade or affirmation system or other similar venue or 

system, approved by the Clearing House for submitting 

SwapClear Transactions to the Clearing House (and 

excludes, for the avoidance of doubt, the ClearLink API)

"Associated Clearing House" means the clearing house appointed from time to time by a 

Co-operating Exchange to act as the central counterparty to 

some or all transactions made on, or under the rules of the 

Co-operating Exchange

"Associated Collateral 

Balance"

means the Account Balance or Account Balances (as 

applicable) that may be transferred from the Transfer

Account of an Eligible Transferor to the Transfer Account of 

an Eligible Transferee pursuant to Regulation 60 or 

Regulation 95 of these Regulations and in accordance with 

the Procedures and (where applicable) any relevant 

Collateral Management Agreement

"ATP Market Rules" means the rules, regulations, administrative procedures, 

Memorandum and Articles of Association or by-laws which 

regulate an ATP and the market administered by it as notified 

from time to time to the Clearing House

"ATS Contract" means any contract subject to the Regulations entered into 

by the Clearing House and a RepoClear Clearing Member or 

a RepoClear Dealer pursuant to Default Rule 6(m), 

following a course of dealing on any Automated Trading 

System between the Clearing House and a RepoClear 

Clearing Member or RepoClear Dealer

"ATSP" means an approved trade selection provider, which is 

approved as such by the Clearing House for the provision of 

Backload Transactions, Theoretical ATSP Transactions and 

Actual ATSP Transactions to the Clearing House 

"ATSP Package" has the meaning assigned to it in Section 1.3.3(b) of Section 

2I of the Procedures

"ATS Participant" has the meaning assigned to such term in Regulation 63(b)

"Auction Portfolio" has the meaning assigned to it in the Default Rules

“AUD ForexClear Liquidity 

Fund Contribution”

means, in respect of a ForexClear Option Clearing Member, 

the amount (notified by the Clearing House pursuant to 

Regulation 102(b)) of cash denominated in Australian 

Dollars that is required to be paid by that ForexClear Option 

Clearing Member to the Clearing House

June 2023
Clearing House: General Regulations

- 5-

"Authorised CSD" means a central securities depository, which is authorised or 

recognised under EU CSDR or UK CSDR

"Automated Trading System" means an automated trading system in respect of which the 

Clearing House has an agreement with the operator thereof 

and in respect of which the Clearing House has notified 

RepoClear Members in accordance with the Procedures

"Automatic Early Termination 

Event"

has the meaning ascribed to such term in Rule 5 of the 

Default Rules

"Available Collateral Value" means, in respect of 

(i) a Client Account (other than an Omnibus Gross

Segregated Account or Individual Segregated

Account), the value (as determined by the Clearing

House) of the Clearing Member Current Collateral

Balance of such Client Account, where any Client

Buffer forming part of such Clearing Member

Current Collateral Balance will have a zero value,

(ii) an Individual Segregated Account, the value (as

determined by the Clearing House) of the Clearing

Member Current Collateral Balance of such

Individual Segregated Account, after the application

or deduction of any Cross-ISA Deduction (as

applicable), where any Client Buffer forming part of

such Clearing Member Current Collateral Balance

will have a zero value, and

(iii) a sub-account of an Omnibus Gross Segregated

Account, the value (as determined by the Clearing

House) of such portion of the Clearing Member

Current Collateral Balance of the Omnibus Gross

Segregated Account attributed to such sub-account

by the Clearing House, where any Client Buffer

forming part of such Clearing Member Current

Collateral Balance will have a zero value

"Backload Collateral Call"

"Backload Cycle"

has the meaning assigned to it in Section 1.3.3(g) of Section 

2I of the Procedures

means the process set out in Section 1.3.3 of Section 2I of 

the Procedures 

"Backload Cycle Date" means a date for the operation of a Backload Cycle, as 

determined by the Clearing House

"Backload Service" has the meaning assigned to it in Section 1.3.3(a) of Section 

2I of the Procedures

June 2023
Clearing House: General Regulations

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"Backload Transaction" means an existing ForexClear Deliverable Forward 

Transaction or ForexClear Swap Transaction that an ATSP 

may select for inclusion in an ATSP Package

"Backup Clearing Member" means the Clearing Member(s) (a) indicated by a Clearing 

Client as acting as such, and (b) notified to the Clearing 

House from time to time in an Appointment Notice and in 

accordance with the procedure determined by the Clearing 

House 

"Backup Client" means an Indirect Gross Account Clearing Client identified 

by a Clearing Member to the Clearing House for the 

purposes of a transfer of Related Contracts pursuant to a 

Client to Client Porting

"Backload Registration Cycle" has the meaning assigned to it in the Procedures

"Backloaded Trade" has the meaning assigned to it in the Procedures

"Base Liability" means, in respect of 

(i) a Client Account (other than an Omnibus Gross

Segregated Account), the Total Required Margin

Amount of such account, disregarding the amount by

which such liability is reduced by the use of

SwapClear Tolerance, and

(ii) a sub-account of an Omnibus Gross Segregated

Account, the Total Required Margin Amount of such

account, disregarding the amount by which such

liability is reduced by the use of SwapClear

Tolerance

"Block IRS Trade" means a trade the notional amount of which is at or above 

the minimum block size established by the CFTC pursuant 

to CFTC Regulation 43.6 for the interest rate asset class and 

in effect as of the date of submission of such trade to the 

Clearing House for registration

"Board" means the board of directors or other governing body 

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

Exchange

"Bond Trade" means a trading activity in which a RepoClear Participant 

offers to sell RepoClear Eligible Securities, and another 

RepoClear Participant offers to purchase those RepoClear 

Eligible Securities, and a trade subsequently ensues

“Bulk Event” has the meaning as described in Regulation 60(f)

“Bulk Event Cycle” has the meaning as described in Regulation 60(f)

June 2023
Clearing House: General Regulations

- 15-

"Collateral Management 

Agreement"

means a collateral management agreement entered into 

between a Custodial Segregated Client, a Clearing Member 

and the Clearing House, which sets out (inter alia) the terms 

on which the Custodial Segregated Client may provide 

Collateral to the Clearing House in respect of the relevant 

Custodial Segregated Account

"Combined Omnibus Gross 

Segregated Clearing Clients"

means two or more Omnibus Gross Segregated Clearing 

Clients within the same Omnibus Gross Segregated Account 

who have elected to have their positions combined for the 

purposes of calculating applicable margin requirements (on 

a net basis as between such Omnibus Gross Segregated 

Clearing Clients as if such Omnibus Gross Segregated 

Clearing Clients together are a single Omnibus Gross 

Segregated Clearing Client for the purposes of the relevant 

calculations)

"Complete Member 

Agreement"

has the meaning assigned to it in Section 1.3.3(d) of Section 

2I of the Procedures

"Compression 

Documentation"

means such documentation as may be prescribed from time 

to time by the Clearing House and/or any ACSP (where 

applicable) in relation to a Multilateral Compression Cycle 

or a SwapClear Clearing Member’s participation in 

Multilateral Compression services, including:

(i) for a Member Compression Cycle, such agreements

and documents as the Clearing House may require

from all relevant SwapClear Clearing Members in

relation to Multilateral Compression in accordance

with the relevant Compression Proposal;

(ii) for an ACSP Compression Cycle, such agreements

and documents as may be required by the nominated

ACSP and/or the Clearing House in order to allow a

SwapClear Clearing Member to receive the services

of the ACSP and participate in that ACSP

Compression Cycle; and

(iii) such other documentation as the Clearing House may

prescribe from time to time in Procedures, user

manuals or other guidance documentation regarding

Multilateral Compression.

June 2023
Clearing House: General Regulations

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"Execution Notice" has the meaning assigned to it in Section 1.3.3(i) of Section 

2I of the Procedures

"Execution Terms" means the terms (if any) that apply to a SwapClear 

Transaction, ForexClear Transaction or EquityClear 

Novation Transaction (as applicable) relating to the 

registration or non-registration of such transaction, including 

(without limitation) any such terms contained in an 

agreement between (i) a Trading Venue and its participants, 

and (ii) the Executing Parties to such transaction

"Exempt Client Clearing 

Member"

means a Clearing Member to which, in the sole 

determination of the Clearing House, an Exempting Client 

Clearing Rule would apply upon such Clearing Member 

becoming a defaulter 

"Exempting Client Clearing 

Rule"

means, in relation to a Clearing Member, any law, regulation 

or statutory provision (having the force of law) of a 

Governmental Authority the effect of which, in the 

determination of the Clearing House in its absolute 

discretion, is to protect the operation of the Client Clearing 

Annex of the Default Rules from challenge under the 

insolvency laws applicable to that Clearing Member

"expiry date or month" means a date or month prescribed by Exchange Rules or, 

where relevant, the Product Specific Contract Terms and 

Eligibility Criteria Manual, in respect of an option contract

"FCM Approved Trade 

Source System"

has the meaning assigned to it in the FCM Regulations

"FCM Buffer" has the meaning assigned to it in the FCM Regulations

"FCM Clearing Member" has the meaning assigned to it in the FCM Regulations

"FCM Clearing Membership 

Agreement"

has the meaning assigned to it in the FCM Regulations

"FCM Client" has the meaning assigned to it in the FCM Regulations

"FCM Client Segregated SubAccount"has the meaning assigned to it in the FCM Regulations

"FCM Contract" has the meaning assigned to it in the FCM Regulations

"FCM Default Fund 

Agreement"

has the meaning assigned to it in the FCM Regulations

"FCM ForexClear Client 

Clearing Services"

has the meaning assigned to it in the FCM Regulations

June 2023
Clearing House: General Regulations

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"FCM ForexClear Contract" has the meaning assigned to it in the FCM Regulations

"FCM ForexClear 

Transaction"

has the meaning assigned to it in the FCM Regulations

"FCM Omnibus Clearing 

Product Client Account with 

LCH"

has the meaning assigned to it in the FCM Regulations

"FCM Omnibus ForexClear 

Client Account with LCH" 

has the meaning assigned to it in the FCM Regulations

"FCM Omnibus SwapClear 

Client Account with LCH"

has the meaning assigned to it in the FCM Regulations

"FCM Procedures" has the meaning assigned to it in the FCM Regulations

"FCM Regulations" means the Clearing House's FCM Regulations

"FCM SwapClear Client 

Clearing Services" 

has the meaning assigned to it in the FCM Regulations

"FCM SwapClear Contract" has the meaning assigned to it in the FCM Regulations

"FCM SwapClear Suspension 

Sub-Account"

has the meaning assigned to it in the FCM Regulations

"FCM SwapClear 

Transaction"

has the meaning assigned to it in the FCM Regulations

"FCM Transaction" has the meaning assigned to it in the FCM Regulations

"Fed Funds Rate" means the Federal Funds Rate as published by the Federal 

Reserve Bank of New York (or, if such a rate is not available, 

such Fed Fund-linked rate as may be determined in light of 

market conditions at such time by the Clearing House and 

notified by the Clearing House to Clearing Members)

"Final Transaction" has the meaning assigned to it in Section 1.3.3(i) of Section 

2I of the Procedures

"First Defaulter" has the meaning as described in Default Rule 22

"Fixed Income Contract" means a RepoClear Contract or a RepoClear Term £GC 

Contract

June 2023
Clearing House: General Regulations

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"ForexClear Deliverable 

Contract”

means a ForexClear Deliverable Forward Contract, 

ForexClear Option Contract, ForexClear Spot Contract or 

ForexClear Swap Contract

"ForexClear Deliverable 

Contract Terms"

means the ForexClear Deliverable Forward Contract Terms, 

ForexClear Option Contract Terms, ForexClear Spot 

Contract Terms or ForexClear Swap Contract Terms

"ForexClear Deliverable

Default Fund Contribution"

means, for any FXCCM which is a ForexClear Option 

Clearing Member, the amount of that FXCCM's 

Contribution attributable to the ForexClear Option Service 

determined in accordance with the ForexClear Default Fund 

Supplement and the Procedures

"ForexClear Deliverable

Forward Contract"

means a Contract entered into by the Clearing House with a 

ForexClear Clearing Member on the ForexClear Deliverable 

Forward Contract Terms which includes, in the case of the 

Default Rules (including the ForexClear DMP Annex but 

excluding, for the avoidance of doubt, the Client Clearing 

Annex), the FCM Default Fund Agreement and any other 

document, rule or procedure as specified by the Clearing 

House from time to time

"ForexClear Deliverable

Forward Contract Terms"

means the terms applicable to each ForexClear Deliverable

Forward Contract as set out from time to time in the Product 

Specific Contract Terms and Eligibility Criteria Manual 

applicable to ForexClear Deliverable Forward Contracts

"ForexClear Deliverable

Forward STM Contract"

means a ForexClear Deliverable Forward Contract that is 

either (i) registered at the Clearing House as a ForexClear 

Deliverable Forward STM Contract pursuant to Regulation 

91, (ii) converted into a ForexClear Deliverable Forward 

STM Contract by the Clearing House pursuant to Regulation 

106A, or (iii) a ForexClear Deliverable Forward STM 

Contract through novation pursuant to Regulation 12(b), in 

each case the terms of which therefore include the 

ForexClear Deliverable Forward STM Terms

"ForexClear Deliverable

Forward STM Terms"

means the part of the ForexClear Deliverable Forward 

Contract Terms designated as the ForexClear Deliverable 

Forward STM Terms by the Clearing House from time to 

time

"ForexClear Deliverable

Forward Transaction"

means a contracttransaction, the details meeting the 

applicable ForexClear Eligibility Criteria for registration as 

a ForexClear Deliverable Forward Contract, entered into 

between two ForexClear Participants, of which may be 

particulars are presented to the Clearing House for 

registration of such transaction as two ForexClear 

Deliverable Forward Contractsin the name of ForexClear 

Clearing Members in accordance with the Regulations

June 2023
Clearing House: General Regulations

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“ForexClear Deliverable 

Service”

means the service provided by the Clearing House under the 

ForexClear Regulations, whereby the Clearing House makes 

available services in respect of ForexClear Option Contracts, 

ForexClear Deliverable Forward Contracts, ForexClear Spot 

Contracts and ForexClear Swap Contracts

“ForexClear Deliverable 

Transaction”

means a ForexClear Deliverable Forward Transaction. 

ForexClear Option Transaction, ForexClear Spot 

Transaction or ForexClear Swap Transaction

"ForexClear Determination 

Date"

has the meaning assigned to it in Rule F2 of the ForexClear

Default Fund Supplement

"ForexClear DMG" has the meaning assigned to it in the ForexClear DMP Annex 

in the Default Rules

"ForexClear DMP" has the meaning assigned to it in the ForexClear DMP Annex 

in the Default Rules

"ForexClear Eligibility 

Criteria"

means the product eligibility criteria in respect of a type of 

ForexClear Transaction as set out in the Product Specific 

Contract Terms and Eligibility Criteria Manual as published 

on the Clearing House's website from time to time, which 

shall include, the ForexClear Eligibility Criteria applicable 

to ForexClear Deliverable Transactions and ForexClear 

Non-Deliverable Transactions

"ForexClear Excess Loss" means the net sum or aggregate of net sums certified to be 

payable by a Defaulter in respect of ForexClear Business by 

a Rule 19 Certificate less (a) the proportion of the Capped 

Amount applicable to ForexClear Business under Rule 15(c) 

and (b) any sums then immediately payable in respect of 

ForexClear Business Default Losses owed by such Defaulter 

by any insurer or provider of analogous services under any 

policy of insurance or analogous instrument written in favour 

of the Clearing House

"ForexClear Fund Amount" means the amount as determined in accordance with Rule 

F2(c) of the ForexClear Default Fund Supplement

"ForexClear Liquidity Event" means the event or circumstance specified as such in

Regulation 101(a)

"ForexClear Liquidity Fund 

Contributions"

means the AUD ForexClear Liquidity Fund Contribution, 

CHF ForexClear Liquidity Fund Contribution, EUR 

ForexClear Liquidity Fund Contribution, and GBP 

ForexClear Liquidity Fund Contribution

"ForexClear Loss Distribution 

Process"

has the meaning assigned to it in Rule F9 of the ForexClear 

Default Fund Supplement

June 2023
Clearing House: General Regulations

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"ForexClear Matcher" means a party which has been notified in writing by the 

Clearing House to ForexClear Participants from time to time 

as being a matching provider for the ForexClear Service

"ForexClear NDF Contract" means a Contract entered into by the Clearing House with a 

ForexClear Clearing Member on the ForexClear NDF 

Contract Terms which includes, in the case of the Default 

Rules (including the ForexClear DMP Annex but excluding, 

for the avoidance of doubt, the Client Clearing Annex), the 

FCM Default Fund Agreement and any other document, rule 

or procedure as specified by the Clearing House from time 

to time, an FCM ForexClear Contract

"ForexClear NDF Contract 

Terms"

means the terms applicable to each ForexClear NDF 

Contract as set out from time to time in the Product Specific 

Contract Terms and Eligibility Criteria Manual applicable to 

ForexClear NDF Contracts

"ForexClear NDF STM 

Contract"

means a ForexClear NDF Contract that is either (i) registered 

at the Clearing House as a ForexClear NDF STM Contract 

pursuant to Regulation 91, (ii) converted into a ForexClear 

NDF STM Contract by the Clearing House pursuant to 

Regulation 106A, or (iii) a ForexClear NDF STM Contract 

through novation pursuant to Regulation 12(b), in each case 

the terms of which therefore include the ForexClear NDF 

STM Terms

"ForexClear NDF STM 

Terms"

means the part of the ForexClear NDF Contract Terms 

designated as the ForexClear NDF STM Terms by the 

Clearing House from time to time

"ForexClear NDF 

Transaction"

means a contracttransaction, the details meeting the 

applicable ForexClear Eligibility Criteria for registration as 

a ForexClear NDF Contract, entered into between two 

ForexClear Participants, of which may be particulars are 

presented to the Clearing House for registration of such 

transaction as two ForexClear NDF Contracts or one 

ForexClear NDF Contract and one FCM ForexClear NDF 

Contract (as the case may be)in the name of ForexClear 

Clearing Members in accordance with the Regulations. In 

addition, a ForexClear Transaction shall include an FCM 

ForexClear Transaction where the relevant ForexClear 

Clearing Member is an executing party

June 2023
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"ForexClear NDO Contract" means a Contract entered into by the Clearing House with a 

ForexClear Clearing Member on the ForexClear NDO

Contract Terms which includes, in the case of the Default 

Rules (including the ForexClear DMP Annex but excluding, 

for the avoidance of doubt, the Client Clearing Annex), the 

FCM Default Fund Agreement and any other document, rule 

or procedure as specified by the Clearing House from time 

to time, an FCM ForexClear Contract

"ForexClear NDO Contract 

Terms"

means the terms applicable to each ForexClear NDO

Contract as set out from time to time in the Product Specific 

Contract Terms and Eligibility Criteria Manual applicable to 

ForexClear NDO Contracts

"ForexClear NDO STM 

Contract"

means a ForexClear NDO Contract that is either (i) 

registered at the Clearing House as a ForexClear NDO STM 

Contract pursuant to Regulation 91, (ii) converted into a 

ForexClear NDO STM Contract by the Clearing House 

pursuant to Regulation 106A, or (iii) a ForexClear NDO

STM Contract through novation pursuant to Regulation 

12(b), in each case the terms of which therefore include the 

ForexClear NDO STM Terms

"ForexClear NDO STM 

Terms"

means the part of the ForexClear NDO Contract Terms 

designated as the ForexClear NDO STM Terms by the 

Clearing House from time to time

"ForexClear NDO 

Transaction"

means a contracttransaction, the details meeting the 

applicable ForexClear Eligibility Criteria for registration as 

a ForexClear NDO Contract, entered into between two 

ForexClear Participants, of which particulars are may be 

presented to the Clearing House for registration of such 

transaction as two ForexClear NDO Contracts or one 

ForexClear NDO Contract and one FCM ForexClear NDO

Contract (as the case may be)in the name of ForexClear 

Clearing Members in accordance with the Regulations. In 

addition, a ForexClear Transaction shall include an FCM 

ForexClear Transaction where the relevant ForexClear 

Clearing Member is an executing party

"ForexClear Non-Deliverable 

Contract"

means a ForexClear NDF Contract or ForexClear NDO 

Contract

"ForexClear Non-Deliverable 

Contract Terms"

means the ForexClear NDF Contract Terms or ForexClear 

NDO Contract Terms

“ForexClear Non-Deliverable 

Service”

means the service provided by the Clearing House under the 

ForexClear Regulations, whereby the Clearing House makes 

available services in respect of ForexClear NDO Contracts 

and ForexClear NDF Contracts

June 2023
Clearing House: General Regulations

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"ForexClear Option Service" means the service provided by the Clearing House under the 

ForexClear Regulations, whereby the Clearing House makes 

available services in respect of ForexClear Option Contracts, 

ForexClear Deliverable Forward Contracts, ForexClear Spot 

Contracts and ForexClear Swap Contracts

"ForexClear Option Service 

Membership Requirements"

has the meaning assigned to it in the Procedures

"ForexClear Option STM 

Contract"

means a ForexClear Option Contract that is either (i) 

registered at the Clearing House as a ForexClear Option

STM Contract pursuant to Regulation 91, (ii) converted into 

a ForexClear Option STM Contract by the Clearing House 

pursuant to Regulation 106A, or (iii) a ForexClear Option

STM Contract through novation pursuant to Regulation 

12(b), in each case the terms of which therefore include the 

ForexClear Option STM Terms

"ForexClear Option STM 

Terms"

means the part of the ForexClear Option Contract Terms 

designated as the ForexClear Option STM Terms by the 

Clearing House from time to time

"ForexClear Option

Transaction"

means a contracttransaction, the details meeting the 

applicable ForexClear Eligibility Criteria for registration as 

a ForexClear Option Contract, entered into between two 

ForexClear Participants, of which particulars are may be 

presented to the Clearing House for registration in the name 

of ForexClear Clearing Members in accordance with the 

Regulations. of such transaction as two ForexClear Option 

Contracts 

"ForexClear Participants

(FXPs)"

means ForexClear Clearing Members, ForexClear Dealers 

and ForexClear Clearing Clients and "ForexClear 

Participant" means any of them

"ForexClear Regulations" means those Regulations which apply to ForexClear 

Contract as specified in Regulation 90

"ForexClear Service" means the service provided by the Clearing House under the 

ForexClear Regulations

"ForexClear Settlement

Event"

means the event or circumstance specified as such in 

Regulation 100(g)

"ForexClear Settlement

Reduction Service"

has the meaning ascribed to such term in the Procedures 

"ForexClear Spot Contract" means a Contract entered into by the Clearing House with a 

ForexClear Clearing Member on the ForexClear Spot 

Contract Terms which includes, in the case of the Default 

Rules (including the ForexClear DMP Annex but excluding, 

for the avoidance of doubt, the Client Clearing Annex), the 

FCM Default Fund Agreement and any other document, rule 

or procedure as specified by the Clearing House from time 

to time

June 2023
Clearing House: General Regulations

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"ForexClear Spot Contract 

Terms"

means the terms applicable to each ForexClear Spot Contract 

as set out from time to time in the Product Specific Contract 

Terms and Eligibility Criteria Manual applicable to 

ForexClear Spot Contracts

“ForexClear Spot STM 

Contract”

means a ForexClear Spot Contract that is either (i) registered 

at the Clearing House as a ForexClear Spot STM Contract 

pursuant to Regulation 91, (ii) converted into a ForexClear 

Spot STM Contract by the Clearing House pursuant to 

Regulation 106A, or (iii) a ForexClear Spot STM Contract 

through novation pursuant to Regulation 12(b), in each case 

the terms of which therefore include the ForexClear Spot 

STM Terms

“ForexClear Spot STM 

Terms”

means the part of the ForexClear Spot Contract Terms 

designated as the ForexClear Spot STM Terms by the 

Clearing House from time to time

"ForexClear Spot

Transaction"

means a contracttransaction, the details meeting the 

applicable ForexClear Eligibility Criteria for registration as 

a ForexClear Spot Contract, entered into between two 

ForexClear Participants, of which particulars may be are 

presented to the Clearing House for registration of such 

transaction in the name of ForexClear Clearing Members in 

accordance with the Regulations.as two ForexClear Spot 

Contracts

"ForexClear STM Contract" means:

(a) a ForexClear Deliverable Forward STM Contract;

(b) a ForexClear NDF STM Contract;

(c) a ForexClear NDO STM Contract;

(d) a ForexClear Option STM Contract;

(e) a ForexClear Spot STM Contract; or

(f) a ForexClear Swap STM Contract

"ForexClear STM Conversion 

Date”

has the meaning assigned to it in Regulation 106A(o)

"ForexClear STM Conversion 

Request"

has the meaning assigned to it in Regulation 106A(n)

June 2023
Clearing House: General Regulations

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"ForexClear STM Terms" means:

(g) the ForexClear Deliverable Forward STM Terms;

(h) the ForexClear NDF STM Terms;

(i) the ForexClear NDO STM Terms;

(j) the ForexClear Option STM Terms;

(k) the ForexClear Spot STM Terms; or

(l) the ForexClear Swap STM Terms

"ForexClear Swap Contract" means a Contract entered into by the Clearing House with a

ForexClear Clearing Member on the ForexClear Swap 

Contract Terms which includes, in the case of the Default 

Rules (including the ForexClear DMP Annex but excluding, 

for the avoidance of doubt, the Client Clearing Annex), the 

FCM Default Fund Agreement and any other document, rule 

or procedure as specified by the Clearing House from time 

to time

"ForexClear Swap Contract 

Terms"

means the terms applicable to each ForexClear Swap 

Contract as set out from time to time in the Product Specific 

Contract Terms and Eligibility Criteria Manual applicable to 

ForexClear Swap Contracts

"ForexClear Swap STM 

Contract"

means a ForexClear Swap Contract that is either (i) 

registered at the Clearing House as a ForexClear Swap STM 

Contract pursuant to Regulation 91, (ii) converted into a 

ForexClear Swap STM Contract by the Clearing House 

pursuant to Regulation 106A, or (iii) a ForexClear Swap

STM Contract through novation pursuant to Regulation 

12(b), in each case the terms of which therefore include the 

ForexClear Swap STM Terms

"ForexClear Swap STM 

Terms"

means the part of the ForexClear Swap Contract Terms 

designated as the ForexClear Swap STM Terms by the 

Clearing House from time to time

"ForexClear Swap

Transaction"

means a contracttransaction, the details meeting the 

applicable ForexClear Eligibility Criteria for registration as 

a ForexClear Swap Contract, entered into for and on behalf 

of two ForexClear Option Clearing Members, of which may 

be particulars are deemed to be presented to the Clearing 

House for registration of such transaction as two ForexClear 

Swap Contracts

in the name of those ForexClear Clearing Members in 

accordance with the Regulations.

“ForexClear Tolerance” has the meaning assigned to it in the Procedures

June 2023
Clearing House: General Regulations

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“Overnight Funding Account”

“Overnight Funding 

Collateral”

"Own Resources Provision"

means a sub-account of the Proprietary Account of a 

SwapClear Clearing Member opened for the purpose of 

recording Overnight Funding Collateral

means an amount of Collateral that: 

(i) is intended to be used to support the registration of,

or to meet any other margin requirements in

connection with, SwapClear Contracts in the

Proprietary Account of a SwapClear Clearing

Member; and

(ii) the Clearing House designates as “Overnight

Funding Collateral”.

means Article 35 of Commission Delegated Regulation (EU) 

No 153/2013 of 19 December 2012 supplementing 

Regulation (EU) No 648/2012 of the European Parliament 

and of the Council with regard to regulatory technical 

standards on requirements for central counterparties or any 

law, regulation, rule, official directive or guideline (having 

the force of law) which replaces, supplements, modifies, 

amends or varies such provision

"Participating FXCCM" has the meaning assigned to it in Section 1.3.3(d) of Section 

2I of the Procedures

"“Permitted Transfers"” has the meaning ascribed to it in Section 2C or Section 2I of 

the Procedures, as applicable

"Portfolio Margined 

Contracts"

means any Listed Interest Rates Contracts recorded in an 

account of a Portfolio Margining Clearing Member related 

to SwapClear Business following the operation by the 

Clearing House of the Portfolio Margining Arrangements

"Portfolio Margining Clearing 

Member"

means a Joint Rates Service Clearing Member who has opted 

in to the Portfolio Margining Service in accordance with 

Section 2C of the Procedures

"Portfolio Margining Client" means, in respect of a Portfolio Margining Clearing Member, 

an Individual Segregated Account Clearing Client, a 

Custodial Segregated Client or an Omnibus Segregated 

Clearing Client which has been opted in to the Portfolio 

Margining Service in accordance with Section 2C of the 

Procedures

"Portfolio Margining Service" means the portfolio margining service offered by the 

Clearing House pursuant to Regulation 59 and as more fully 

described at Section 2C of the Procedures

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Clearing House: General Regulations

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"Rates Service Default 

Management Process 

Completion Date"

has the meaning assigned to it in the Rates Service DMP 

Annex in the Default Rules

"Rates Service Default 

Period"

means the Listed Interest Rates Default Period and/or 

SwapClear Default Period (as applicable)

"Rates Service Determination 

Date"

has the meaning assigned to it in the Rates Service DMP 

Annex in the Default Rules

"Rates Service DMG" has the meaning assigned to it in the Rates Service DMP 

Annex in the Default Rules

"Rates Service DMP" has the meaning assigned to it in the Default Rules

"Rates Service Excess Loss" means the net sum or aggregate of net sums certified to be 

payable by a Defaulter by a Rule 19 Certificate in respect of 

Rates Service Business less (a) the proportion of the Capped 

Amount applicable to Rates Service Business under Rule 

15(c) of the Default Rules and (b) any sums then 

immediately payable in respect of Rates Service Business 

Default Losses owed by such Defaulter by any insurer or 

provider of analogous services under any policy of insurance 

or analogous instrument written in favour of the Clearing 

House

"Rates Service Fund Amount" has the meaning assigned to it in the Rates Service Default 

Fund Supplement

"Rates Service Fund Amount 

– Listed Interest Rate"

means the amount as determined in accordance with Rule 

CS2 of the Rates Service Default Fund Supplement

"Rates Service Fund Amount -

SwapClear"

means the amount as determined in accordance with Rule 

CS2 of the Rates Service Default Fund Supplement

"Rates Service Voluntary 

Payment"

has the meaning assigned to it in Rule CS5. of the Rates 

Service Default Fund Supplement

"Rates Service Voluntary 

Payment Notice

has the meaning assigned to it in Rule CS5. of the Rates 

Service Default Fund Supplement

"Ready Notice" has the meaning assigned to it in Section 1.3.3(h) of Section 

2I of the Procedures

June 2023
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"SwapClear STM Terms" means the part of the SwapClear Contract Terms designated 

as the SwapClear STM Terms by the Clearing House from 

time to time

"SwapClear Tolerance" has the meaning assigned to it in Section 1.3.3 (Trade 

Registration Facilitation: SwapClear Tolerance, Client 

Buffer and Standing Order Amount) of Procedure 2C 

(SwapClear Clearing Service) of the Clearing House’s 

Procedures

"SwapClear Tolerance 

Utilisation"

means, in respect of each SCM, the value of the SwapClear 

Tolerance utilised by that SCM at any particular time, as 

determined by the Clearing House in its sole discretion

"SwapClear Transaction" means any transaction, the details of which are may be

presented to the Clearing House via an Approved Trade 

Source System for the purpose of having such transaction 

registered at the Clearing Houseregistration of such 

transaction as two SwapClear Contracts or one SwapClear 

Contract and one FCM SwapClear Contract (as the case may 

be), regardless of whether such transaction (a) is an existing 

swap transaction, (b) was entered into in anticipation of 

clearing, or (c) is contingent on clearing

"SwapClear Unfunded 

Contribution"

has the meaning assigned to it in Rule S7 of Part A of the 

Rates Service Default Fund Supplement – SwapClear

"SwapClear Unfunded 

Contribution Notice"

has the meaning assigned to it in Rule S7 of Part A of the 

Rates Service Default Fund Supplement – SwapClear

"TARGET2" means the Trans-European Automated Real-Time Gross 

Settlement Express Transfer payment system which utilises 

a single shared platform and which was launched on 19 

November 2007

"Target Settlement Day" means any day on which TARGET2 is open for the 

settlement of payments in euro

"tender" means a notice given by or on behalf of a seller (or buyer 

where Exchange Rules so require) pursuant to Exchange 

Rules, these Regulations and the Procedures, as applicable, 

of an intention to make (or take) delivery of a reference asset 

or commodity

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“Term £GC Trade" means a trading activity in which a RepoClear Participant 

("the First Participant") offers to sell (or buy) an agreed 

value of securities comprised in a Term £GC Basket (as 

defined in the Procedures), to be allocated in accordance 

with the RepoClear Procedures applicable to RepoClear 

Term £GC Contracts, and another RepoClear Participant 

("the Second Participant") offers to buy (or sell, as the case 

may be) the securities so allocated, on the conditions that:

a) at the end of a specified period of time, the Second

Participant sells (or buys, as the case may be)

Equivalent Securities (as such term is used in the

RepoClear Term £GC Contract Terms) and the First

Participant buys (or sells, as the case may be) those

Equivalent Securities; and

b) the understanding of the parties is that their obligations

during the term of the transaction will be effected

through the CREST delivery by value (DBV)

functionality of Euroclear UK and Ireland, as

contemplated by the rules of Euroclear UK and Ireland

and RepoClear Procedures applicable to RepoClear

Term £GC Contracts, and a trade subsequently ensues

"Terminating SwapClear 

Contracts"

means, in relation to any Compression Proposal, the 

SwapClear Contracts which will be terminated and replaced 

with Post-Multilateral Compression Contracts in accordance 

with Regulation 56

"TheoreticalATSP 

Transaction"

means a theoretical and unexecuted transaction that an ATSP 

provides to the Clearing House as part of an ATSP Package 

"Third Parties Act" means the Contracts (Rights of Third Parties) Act 1999, as 

amended from time to time 

"Total Required Margin 

Amount"

means the aggregate of the Required Margin Amount for all 

types of margin relating to (i) a Client Account (other than 

an Omnibus Gross Segregated Account), (ii) a Proprietary 

Account, or (iii) in respect of an Omnibus Gross Segregated 

Account, the relevant Single Omnibus Gross Segregated 

Clearing Client or relevant group of Combined Omnibus 

Gross Segregated Clearing Clients (as applicable) within 

such Omnibus Gross Segregated Account

"trade correction procedures" means the procedures established for the purposes of a Link 

to facilitate the correction of errors contemplated by such 

procedures

June 2023
Appendix II: Procedure Section 2I 

ForexClear Clearing Service
CORPORATE

LCH LIMITED

PROCEDURES SECTION 2I

FOREXCLEAR CLEARING SERVICE
LCH Limited © 20222023 - i - September 2022January 2023

CORPORATE

CONTENTS

Section Page

1. Introduction and Interpretation..........................................................................................1

1.1 Users of the ForexClear Service............................................................................2

1.2 Service Scope ........................................................................................................3

1.3 Trade Management; Trade Registration Facilitation.............................................6

1.4 Market Data.................................................................................................343436

1.5 Initial Margin; Variation Margin and NPV Payments ................................373739

1.6 General Margining Process.........................................................................444446

1.7 ForexClear Reporting ..................................................................................464649

1.8 Treasury Operations & Collateral Management .........................................484850

1.9 Payment of Stamp Tax ................................................................................494952

1.10 Default Management ...................................................................................505052

1.11 Provision of Tax Forms...............................................................................595956

1.12 ForexClear Client Clearing .........................................................................595956

1.13 Provision of Tax Forms...............................................................................636360

1.14 Indirect Clearing..........................................................................................636360

1.15 Compression................................................................................................656562

1.16 Exercise and Expiry Agent..........................................................................666663

1.17 Automatic Exercise of ForexClear Contracts..............................................676764

1.18 CLS Payment Procedures............................................................................696965

1.19 Settlement Limits for ForexClear Clearing Members.................................707066

1.20 Mandatory ForexClear Swap Limit.............................................................707067

1.21 ForexClear STM Contracts – Conversions .................................................707067

1.22 ForexClear Settlement Reduction Service ..................................................717167

1.23 ForexClear Spot Transactions and ForexClear Deliverable Forward Transactions 

– Reporting of Hedge Transactions.............................................................717168

Schedule 1 Confidentiality, non-disclosure and participation in the ForexClear Default 

Management Group.................................................................................................737369
Clearing House Procedures ForexClear Service 

LCH Limited © 20222023 - 1 - September 2022January 2023

1. INTRODUCTION AND INTERPRETATION

These Procedures govern the ForexClear Service, form part of the Rulebook and must 

be read in conjunction with the other parts of the Rulebook.

Capitalised terms used in these Procedures not otherwise defined herein have the 

meanings ascribed to them in the Rulebook.

References to "Sections" shall mean sections in these Procedures.

References to "Business Day", "Calculation Agent", "Disruption Fallback", 

"Notional Amount", "Reference Currency", "Settlement Currency", "Settlement 

Currency Amount", "Settlement Date", "Settlement Rate", "Settlement Rate 

Option", "Trade Date", "Valuation Date", and "Valuation Postponement" shall

carry the meanings given to them in the Product Specific Contract Terms and Eligibility 

Criteria Manual as published on the Clearing House’s website from time to time with 

respect to the relevant Currency Pair.

References to "business day" shall carry the meaning given to it in the Rulebook.

References to “Currency Pair” are to the relevant currency pairs specified in the 

Schedule to the ForexClear Regulations. 

“EMTA” means EMTA Inc., the trade association for the emerging markets that was 

formerly known as the Emerging Markets Traders Association, or any successor entity.

“EMTA Template” means, where applicable, the template terms for a NonDeliverable FX Transaction or Non-Deliverable Currency Option Transaction for a 

particular Currency Pair that are in effect and published by EMTA on its website on the 

relevant Trade Date, unless specified otherwise by the Clearing House by member 

notice to its FXCCMs.

“ForexClear Margin or Settlement Currency” means

(a) in the case of a ForexClear Non-Deliverable Contract, USD; or

(b) in the case of a ForexClear Deliverable Contract, the ForexClear Currency or 

ForexClear Currencies elected as such by the FXCCM party to such ForexClear 

Contract at registration of such ForexClear Contract, provided that the Clearing 

House has permitted such currency or currencies to be chosen for such purpose.

“LCH Non-EMTA Contract Template” means, where applicable, the template terms

for a ForexClear Transaction for a particular Currency Pair that are set forth in the LCH 

Non-EMTA NDF Contract Terms or LCH Non-EMTA NDO Contract Terms.

“NPV Payment” means, in respect of a business day and a ForexClear STM Contract 

that is settled-to-market daily in accordance with Regulation 106A, the amount or 

amounts paid by either the relevant FXCCM or the Clearing House to the other on such 

business day in respect of the change in the net present value of that ForexClear STM 

Contract (or the obligations thereunder) in accordance with the ForexClear STM Terms 

applicable to that ForexClear STM Contract.
Clearing House Procedures ForexClear Service 

LCH Limited © 20222023 - 2 - September 2022January 2023

“Relevant EMTA Template” means, for a particular ForexClear Contract, the EMTA 

Template that is incorporated by reference into the ForexClear Contract Terms

applicable to such Contract, together with any amendments thereto as set out in the

ForexClear Contract Terms.

“Submission Date” means the date on which a given trade is submitted to the Clearing 

House for registration.

Unless otherwise specified, all times are in local London time.

The liability of the Clearing House is as set out in Regulation 52 (Exclusion of 

Liability), which applies to these Procedures in its entirety unless provided otherwise.

1.1 Users of the ForexClear Service

The ForexClear Service is an interface that processes and stores all ForexClear 

Transactions. FXCCMs are Clearing Members who have applied and have been 

accepted by the Clearing House to clear in the ForexClear Service. FXDs are not 

FXCCMs, but have met the criteria for registration as a FXD and have entered into a 

ForexClear Dealer Clearing Agreement with an FXCCM and the Clearing House. 

FXCCMs, FXDs, ForexClear Clearing Clients and, in respect of hedging ForexClear 

Transactions executed for the purpose of Risk Neutralisation, the Clearing House are 

collectively known as ForexClear Participants ("FXPs"). For membership procedures, 

please see Section 1 (Clearing Member and Dealer Status) of the Procedures.

For identification purposes, each FXCCM is assigned a unique three-character 

mnemonic.

1.1.1 Termination of FXCCM Status: Clearing Members should contact the Clearing 

House Onboarding Department (+44 (0)207 426 7891/7627/7063; 

onboarding@lch.com) for details of how to resign from the ForexClear Service.

1.1.2 Termination of FXD Status: The ForexClear Dealer Agreement and Regulation 

8 (Dealer Status) set out how the FXD relationship may be terminated.
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LCH Limited © 20222023 - 3 - September 2022January 2023

1.2 Service Scope

1.2.1 Eligibility: ForexClear Transactions may be submitted for clearing through the 

ForexClear Service. To be eligible to be registered as a ForexClear Contract, a 

trade must meet the applicable ForexClear Eligibility Criteria (as set out in the

Product Specific Contract Terms and Eligibility Criteria Manual as published 

on the Clearing House's website from time to time).

1.2.2 Service Operating Hours

(a) Opening Days: The ForexClear Service will be open each day, except 

weekends, Christmas Day, New Year's Day and Good Friday1.

(b) Opening Hours: Unless notified otherwise, and subject to Section 

1.2.2(a), the ForexClear Service will be open between 20:00 (London 

time) Sunday night and 01:00 (London time) Saturday morning 

("Opening Hours"). The ForexClear Service will not accept ForexClear 

Transactions outside of these hours. The Clearing House will notify 

FXCCMs if the ForexClear Service is scheduled for closure for 

operational or other reasons.

1.2.3 Accounts

(a) Proprietary Accounts and Client Accounts

(i) Proprietary Accounts

An FXCCM may request that the Clearing House opens one or 

more Proprietary Accounts in respect of its House Clearing 

Business. Each Proprietary Account will map to two or more subaccounts:

(A) one or more position accounts; and

(B) one or more collateral accounts.

(ii) Client Accounts

(A) Types of Client Account

Subject to Regulation 11 (Client Clearing Business) and 

Section 1.12 (ForexClear Client Clearing) below, an

FXCCM may request that the Clearing House opens, in 

respect of its Client Clearing Business, one or more:

(1) Individual Segregated Accounts;

(2) Indirect Gross Accounts;

1 While the ForexClear Service is generally closed on Good Friday, the Clearing House may, by prior written 

notice to FXCCMs, open the ForexClear Service on such day, in which case it will be a business day. 
Clearing House Procedures ForexClear Service 

LCH Limited © 20222023 - 4 - September 2022January 2023

(3) Non-Identified Client Omnibus Net Segregated 

Accounts;

(4) Identified Client Omnibus Net Segregated 

Accounts; 

(5) Affiliated Client Omnibus Net Segregated 

Accounts;

(6) Omnibus Gross Segregated Accounts; and/or

(7) Indirect Net Accounts. 

(iii) Each Client Account will map to two or more sub-accounts:

(A) one or more position accounts; and

(B) one or more collateral accounts.

(b) Position-Keeping Accounts

(i) Each FXCCM’s position and financial information are identified by 

position-keeping accounts corresponding to a single character code: 

H for the FXCCM’s house business; C for ForexClear Client 

Clearing Business; and, as applicable, Q for ForexClear Liquidity 

Fund Contributions.

(ii) Sub-accounts within the FXCCM's "H" house position-keeping

account may be set up (e.g. for branches or FXDs). Each such 

sub-account will carry the unique Bank Identifier Code ("BIC") 

of the relevant branch/ FXD.

(c) Other Accounts

(i) Operational Accounts

The Clearing House will open operational accounts, in respect of 

an FXCCM, 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 FXCCM. ForexClear 

Operations will provide details of such accounts to an FXCCM 

upon request.

(ii) ForexClear Client Clearing

If an FXCCM engages in ForexClear Client Clearing Business, 

the Clearing House will maintain a client "C" position-keeping 

account and a client "C" collateral account for such FXCCM, 

which may have any number of segregated sub-accounts. Each 

Individual Segregated Account of the FXCCM will map onto 

one such segregated sub-account in the client "C" position-
Clearing House Procedures ForexClear Service 

LCH Limited © 20222023 - 5 - September 2022January 2023

keeping 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 subaccounts 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 position-keeping 

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 ForexClear

Transaction, registration shall occur immediately and the ForexClear

Transaction shall be automatically replaced with two separate 

ForexClear Contracts.
Clearing House Procedures ForexClear Service 

LCH Limited © 20222023 - 6 - September 2022January 2023

(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 1.3.4(b)(ii)1.3.4(b)(ii)1.3.34(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 1.3.4(a)1.3.4(a)1.3.34(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 registration time, in accordance with Section 

1.3.4(a)(iii)1.3.4(a)(iii)1.3.34(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 

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: - ForexClear Transactions that are not Final Transactions

After the execution of a ForexClear Transaction (a "trade"),") that is not a Final

Transaction, each FXP whowhich is a party to thesuch 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. 
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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 whowhich 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 whowhich 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 (other than Final Transactions) 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 asuch 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 Clearing 

House's website. A list of ForexClear 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 ForexClear 

Approved Trade Source System, it will notify FXCCMs via a member circular.

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

source of any details of any ForexClear Transaction reported to it for 

registration by the ForexClear Approved Trade Source System. The Clearing 

House shall have no liability in the event that any FXCCM suffers any loss 
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through the unauthorised input of details into a system of a ForexClear 

Approved Trade Source System.

Notwithstanding the designation by the Clearing House of a system as a 

ForexClear 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 ForexClear 

Approved Trade Source System or the timeliness or otherwise of the delivery 

of any ForexClear Transaction details by that ForexClear Approved Trade 

Source System to the Clearing House. Such matters form part of the relationship 

between the FXCCM and the ForexClear Approved Trade Source System and 

the terms of such relationship may entitle the ForexClear Approved Trade 

Source System to suspend the ability of an FXCCM to make submissions from 

time to time.

The Clearing House accepts no liability for any error within or corruption of 

any data sent by the ForexClear Approved Trade Source System to the Clearing 

House or to an FXCCM 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 

ForexClear Contract(s) on the basis of incorrect or corrupted data sent to it by a 

ForexClear Approved Trade Source System, the FXCCM(s) concerned shall be 

bound by the terms of such ForexClear Contract(s), unless the ForexClear 

Contract is subsequently cancelled in accordance with Regulation 92

(Cancellation of ForexClear Contracts).

1.3.3 Backloading 

(a) The Clearing House operates a service for the bulk registration of 

Backload Transactions (if applicable) and/or Actual ATSP Transactions 

(if applicable) in accordance with, and subject to, this Section 1.3.3 and 

the Rulebook (“Backload Service”).

(b) An ATSP may, on a Backload Cycle Date, select a set of Backload 

Transactions (if applicable) and/or Theoretical ATSP Transactions (if 

applicable) for the purposes of the Backload Service (“ATSP Package”). 

(c) The counterparties to each Backload Transaction and Theoretical ATSP 

Transaction (as if it were converted to an Actual ATSP Transaction) 

within an ATSP Package may be any combination of FXCCMs and/or 

ForexClear Dealers as determined by the ATSP (but, for the avoidance 

of doubt, may not be a ForexClear Clearing Client, FCM Client or FCM 

Clearing Member). 

(d) Each FXCCM participating in the Backload Cycle for an ATSP Package 

(each, a “Participating FXCCM”) may agree (for itself and on behalf 

of each of its ForexClear Dealers that is, or would be, a counterparty to 

a Backload Transaction or an Actual ATSP Transaction corresponding 

to a Theoretical ATSP Transaction within such ATSP Package) to the 
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presentation of all the Backload Transactions and Theoretical ATSP 

Transactions (once converted to Actual ATSP Transactions) within such 

ATSP Package to the Clearing House for registration as ForexClear 

Contracts (such agreement of all Participating FXCCMs in respect of 

such ATSP Package, “Complete Member Agreement”).

(e) If Complete Member Agreement in respect of an ATSP Package is:

(i) obtained, the ATSP will provide such ATSP Package to the 

Clearing House and notify it that such Complete Member 

Agreement has been obtained (“Agreement Notice”) by the time 

on the Backload Cycle Date determined by the Clearing House; 

or 

(ii) not obtained, the ATSP will not provide such ATSP Package to 

the Clearing House.

(f) Following receipt of an ATSP Package and corresponding Agreement 

Notice on the Backload Cycle Date pursuant to Section 1.3.3(e), the 

Clearing House will:

(i) assess the:

(A) eligibility of each Backload Transaction and each 

Theoretical ATSP Transaction (as if it were converted to 

an Actual ATSP Transaction) within such ATSP Package 

for registration as ForexClear Contracts; and

(B) Backload Transactions and Theoretical ATSP Transactions

(as if they were converted to Actual ATSP Transactions) 

within such ATSP Package against any value, numerical, 

notional amount or other limit(s) that apply; and 

(ii) as a result of such assessment and at its sole and absolute 

discretion:

(A) reject the ATSP Package, so that it will not be presented 

to the Clearing House for registration of the constituent 

transactions as ForexClear Contracts in accordance with, 

and subject to, the Rulebook; or

(B) approve the ATSP Package as is, and agree it as the final 

ATSP Package with the ATSP, which may be presented 

to the Clearing House for registration of the constituent 

transactions as ForexClear Contracts in accordance with, 

and subject to, this Section 1.3.3 and the Rulebook.

(g) If a final ATSP Package is agreed between the Clearing House and the 

ATSP pursuant to Section 1.3.3(f)(ii) before the cut-off time on the 

Backload Cycle Date determined by the Clearing House, then:
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(i) provided the Clearing House has received an Agreement Notice 

in respect of such final ATSP Package, it will determine any 

increase in the margin requirement of each Participating 

FXCCM, which would arise from registering the Backload 

Transactions and Theoretical ATSP Transactions (as if

converted to Actual ATSP Transactions) within such final ATSP

Package, and, to the extent necessary, call Collateral from each 

Participating FXCCM to discharge its margin requirement (each, 

a "Backload Collateral Call"); 

(ii) each Participating FXCCM:

(A) shall provide Collateral to the Clearing House that is 

sufficient to discharge its Backload Collateral Call in 

respect of such Backload Cycle, by the time determined 

by the Clearing House; and

(B) agrees, represents and warrants that:

(1) at the point of execution of any Backload 

Transaction that is within such final ATSP 

Package and to which it or one of its ForexClear 

Dealers is a party, there was no agreement or 

intention to clear such Backload Transaction with 

a central counterparty; 

(2) the agreement or intention of:

(i) the Participating FXCCM, in respect of a 

Backload Transaction that is within such 

final ATSP Package and to which it is 

party; and

(ii) its ForexClear Dealer, in respect of a 

Backload Transaction that is within such 

final ATSP Package and to which the 

ForexClear Dealer is party,

to clear with a central counterparty such 

Backload Transaction (which agreement or 

intention has arisen or arises after execution of 

such transaction) is or will be conditional on the 

presentation of all Final Transactions within such 

final ATSP Package to the Clearing House 

pursuant to Section 1.3.3(j); and

(3) the agreement or intention of:

(i) the Participating FXCCM, in respect of a 

Theoretical ATSP Transaction that is 

within such final ATSP Package and to 
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which the Participating FXCCM would 

be a party if it is converted to an Actual 

ATSP Transaction; and 

(ii) its ForexClear Dealer, in respect of a 

Theoretical ATSP Transaction that is 

within such final ATSP Package and to 

which the ForexClear Dealer would be a 

party if it is converted to an Actual ATSP 

Transaction,

to clear with a central counterparty such Actual 

ATSP Transaction will be conditional on the 

presentation of all Final Transactions within such 

final ATSP Package to the Clearing House 

pursuant to Section 1.3.3(j).

(h) If the Clearing House determines that the requirement under Section 

1.3.3(g)(ii)(A) is satisfied for all Participating FXCCMs by the cut-off 

time on the Backload Cycle Date determined by the Clearing House, it 

will notify the ATSP that provided such ATSP Package accordingly

(“Ready Notice”). 

(i) If Theoretical ATSP Transactions are included in the final ATSP 

Package, the ATSP will, after receipt of a Ready Notice pursuant to 

Section 1.3.3(h), procure the execution on the Backload Cycle Date of 

Actual ATSP Transactions that mirror the terms of the Theoretical 

ATSP Transactions within such ATSP Package by the relevant 

Participating FXCCMs and/or their ForexClear Dealers, and notify the 

Clearing House if and when all such transactions are executed (each 

Backload Transaction and, if applicable, each such Actual ATSP 

Transaction within such final ATSP Package, a “Final Transaction”)

(such notice, an “Execution Notice”). Each Participating FXCCM 

agrees that it or its ForexClear Dealer will execute an Actual ATSP 

Transaction bilaterally with its counterparty and not on a Trading Venue. 

(j) The ATSP may, at its sole and absolute discretion, and after such time 

as it:

(i) receives a Ready Notice in respect of the final ATSP Package

from the Clearing House pursuant to Section 1.3.3(h); and

(ii) if applicable, procures the execution of all Actual ATSP 

Transactions and the Clearing House receives an Execution 

Notice from the ATSP in respect of the final ATSP Package 

pursuant to Section 1.3.3(i),

deliver a clearing request (in the form specified by the Clearing House)

to the Clearing House on the Backload Cycle Date in respect of the final 

ATSP Package, which clearing request will constitute presentation, 

simultaneously, of each Final Transaction within such ATSP Package to 
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the Clearing House for registration as two ForexClear Contracts 

pursuant to General Regulation 91(a). 

(k) The Clearing House will determine whether to accept or reject each such 

Final Transaction within the ATSP Package presented to it pursuant to 

Section 1.3.3(j) and General Regulation 91(a) by the required timeframe 

under Applicable Law and will notify the relevant Participating 

FXCCMs and originating ATSP of registration or rejection of each such

Final Transaction within the required timeframe under Applicable Law.

(l) If the Clearing House determines that one or more Final Transaction(s) 

within an ATSP Package will be rejected, then it will reject all other 

Final Transaction(s) within such ATSP Package. 

(m) A Final Transaction for which the Executing Party is:

(i) an FXCCM shall be deemed to be submitted by such FXCCM to 

the Clearing House for registration at the point at which it is 

presented to the Clearing House as part of a final ATSP Package 

pursuant to Section 1.3.3(j) and General Regulation 91(a); and 

(ii) a ForexClear Dealer shall be deemed to be submitted by such 

ForexClear Dealer to the Clearing House for registration:

(A) at the point at which it is presented to the Clearing House 

as part of a final ATSP Package pursuant to Section 

1.3.3(j) and General Regulation 91(a); and

(B) through the designated office specified under the 

ForexClear Dealer Clearing Agreement between the 

ForexClear Dealer, its FXCCM that will clear the 

Backload Transaction and the Clearing House. 

(n) The Clearing House:

(i) will notify FXCCMs by member circular of the frequency of 

each Backload Cycle Date and of any change to such frequency; 

(ii) may, at its sole and absolute discretion, cancel a Backload Cycle 

for a Backload Cycle Date by notice to those FXCCMs 

participating in such Backload Cycle and the originating ATSP

of such cancellation; and

(iii) will, on the request of an FXCCM, provide the operational 

timings applicable to a Backload Cycle Date and Backload Cycle 

to such FXCCM, provided those specific timings may be subject 

to adjustment by the Clearing House or the ATSP associated 

with such Backload Cycle (as applicable). 

(o) The Clearing House will record each ForexClear Contract resulting from 

the clearing of a Final Transaction in the respective Proprietary Account 
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of the FXCCM(s) in whose names such ForexClear Contracts are 

registered. 

(p) The Clearing House will register a Final Transaction on the basis of the 

data provided to it by the ATSP and has no obligation to verify that the 

details received from the ATSP in respect of a Final Transaction 

properly reflect the transaction entered into by the relevant 

counterparties. The Clearing House will not verify the authorisation of 

the source of any details of any Final Transaction provided to it by the 

ATSP and shall have no liability if any FXCCM, ATSP or third party

incurs any loss or damage in connection with the unauthorised input of 

details into a system by, or of, an ATSP. Notwithstanding the approval

by the Clearing House of an entity as an ATSP, the Clearing House 

makes no warranty or representation, and shall have no liability, as to 

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

provided by any ATSP or the timeliness or otherwise of the ATSP’s 

actions or inactions. The Clearing House shall have no liability for any 

(i) error within, or corruption of, any data or notice sent by an ATSP to 

the Clearing House, an FXCCM or to any third party, or (ii) delay in the 

transmission of any data or notice sent by an ATSP, or failure by an

ATSP to transmit any data or notice, to the Clearing House, an FXCCM

or any third party. If the Clearing House registers any ForexClear 

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

ATSP, the FXCCM(s) concerned shall be bound by such ForexClear 

Contract(s), regardless of any such incorrect and/or corrupted data.

(q) Each Participating FXCCM, in respect of an ATSP Package, agrees that, 

if the ATSP provides an Agreement Notice for such ATSP Package to 

the Clearing House, then:

(i) the Clearing House is entitled to rely on such Agreement Notice

as evidence of actual Complete Member Agreement without 

further enquiry; and

(ii) such Agreement Notice is deemed to constitute Complete 

Member Agreement as described under Section 1.3.3(d) in 

respect of such ATSP Package and each such Participating 

FXCCM. 

(r) An FXCCM participating in a Backload Cycle agrees, represents and 

warrants that it has authorised the ATSP to undertake the steps and 

perform the functions described in this Section 1.3.3 and/or necessary 

for such Backload Cycle, in respect of such FXCCM and its Final

Transactions and Theoretical ATSP Transactions. 

1.3.4 Trade Validation and Registration – All ForexClear Transactions

(a) Process Flow Description

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

submitted by FXPsto it for registration as two ForexClear 
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Contracts or as one ForexClear Contract and one FCM 

ForexClear Contract (as applicable) to ensure that each such 

trade meets the applicable ForexClear Eligibility Criteria and the 

Counterparty Technical Validation Check (as defined below), 

Incremental Risk Checks (as defined below) required for 

ForexClear Transactions and, with respect to each ForexClear 

Deliverable Transaction, a Settlement Exposure Limit Check (as 

described herein) (collectively, the "Validation Checks").

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

ForexClear Transaction which passes the Validation Checks and 

is accepted for clearing by the Clearing House: one for the 

ForexClear Contract between the Clearing House and the 

relevant FXCCM and the other for the ForexClear Contract 

between the Clearing House and the same or another relevant

FXCCM.

(iii) In respect of a ForexClear Transaction which is:

(A) a Trading Venue Transaction and not a Final 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 (as applicable); 

or

(B) not a Trading Venue Transaction and not a Final

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,; or

(C) a Final Transaction, the Clearing House will notify the 

ForexClear Clearing Members and the originating ATSP

of registration or rejection of the ForexClear Transaction,

in each case within the required timeframe under all Applicable 

Law. 

(iv) As provided in paragraph 1.2.5(d) (Novation and Registration), 

in respect of messages confirming registration, the time of 

dispatch of such message shall be the Registration Time of that 

ForexClear Contract.

(v) The internal sub-account (i.e. FXCCM, branch, or FXD) into 

which each trade record is booked is derived from the BIC code 

within the message from the ForexClear Approved Trade Source 

System or ATSP. The BIC links to the FXCCM reference data.
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(vi) Both new trade records arising out of the ForexClear Transaction 

have the same unique ForexClear ID (the "ForexClear ID"). 

Any further events or actions are applied on the basis of this 

ForexClear ID, to ensure consistency.

(b) “Counterparty Technical Validation Check” The counterparties to 

each tradeForexClear Transaction must be (a)those specified under the 

parties submittedForexClear Eligibility Criteria in trade particulars 

FXPs, (b) are respect of such ForexClear Transaction and each a NonDefaulting FXCCM and (c)clearing the ForexClear Transaction must be

approved by the Clearing House to clear the relevant trade type. 

(i) Valuation Date and Settlement Date: inIn respect of a 

ForexClear Non-Deliverable Transaction, (A) the Valuation 

Date and Settlement Date for the ForexClear Transaction must 

fall on a valid Business Day for the Currency Pair to which the 

ForexClear Transaction relates;, and (B) the Settlement Date 

must fall on a Business Day after the Valuation Date. FXCCMs 

should refer to the Relevant EMTA Template or LCH NonEMTA Contract Template for further details of the relevant 

Business Days for determining the Valuation Date and the 

Settlement Date:.

2

Risk and Settlement Limit Checks

(ii) The Clearing House will apply an "Incremental Risk Check" 

to each ForexClear Transaction which is not a Sub-Block 

Trading Venue Transaction. The Incremental Risk Check uses a 

suitable approximation methodology to estimate an FXCCM's 

Liabilities (including the new ForexClear Transaction) against 

available Collateral (taking into account ForexClear Tolerance 

and/or MER Buffer made available by the Clearing House, if 

any). However, any ForexClear Transaction submitted by an

FXCCM that is risk reducing (i.e. results in a reduction of that 

FXCCM's Liabilities) will always pass the Incremental Risk 

Check, even if the FXCCM has not transferred sufficient 

Collateral in respect of its Liabilities to the Clearing House. The 

Clearing House will apply a “Settlement Exposure Limit 

Check” on a per currency basis to each ForexClear Deliverable

Transaction. The Settlement Exposure Limit Check uses an

approximation methodology to assess an FXCCM’s Settlement

Exposure Amount for each Settlement Exposure Date against a

pre-determined Settlement Exposure Limit.

(iii) In the case of a ForexClear Settlement Event, the Clearing House 

will apply additional checks to each ForexClear Spot 

Transaction by reference to its impact on the Settlement Position 

Amount of the Impacted ForexClear Option Clearing Member.

2 As amended from time to time as per relevant EMTA Template.
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(iv) Both FXCCMs to the ForexClear Transaction must pass the 

Incremental Risk Check and Settlement Exposure Limit Check

in order for the Clearing House to register two ForexClear 

Contracts in those FXCCM's names.

(v) If either (or both) FXCCM(s) to a ForexClear Transaction fail(s) 

the Incremental Risk Check(s) and/or Settlement Exposure Limit 

Check(s), then the ForexClear Transaction will be rejected 

immediately and a notification sent in accordance with Section 

1.3.34(a)(iii).

(c) Necessary Consent

(i) In the case of an FXCCM which has been nominated to register 

a ForexClear Transaction on behalf of a third party Executing 

Party other than an FXD, the Clearing House will (only where 

such ForexClear Transaction is not a Trading Venue Transaction) 

provide notification to such FXCCM of the relevant ForexClear 

Transaction and that it has been so nominated, via member 

reports, the ClearLink API or otherwise ("Notification"). Where 

an FXCCM is nominated to clear both ForexClear Contracts 

arising from the registration of a ForexClear Transaction in the 

capacities described in this paragraph, such FXCCM will receive 

two separate Notifications from the Clearing House in relation 

to such ForexClear Transaction. All Notifications shall be 

provided within the required timeframe under all Applicable 

Law. In all other cases, no Notification will be provided to any 

FXCCM.

(ii) In respect of a ForexClear Transaction that is not a Trading 

Venue Transaction, following receipt of a Notification, an 

FXCCM may choose to grant or refuse consent to register the 

ForexClear Transaction. It is a condition for registration of such 

a ForexClear Transaction that an FXCCM grants a separate 

consent (each, a "Necessary Consent") in respect of each 

Notification received by it in relation to the registration of such 

ForexClear Transaction. The Clearing House has an automated 

system which it operates on each business day for the purposes 

of rejecting ForexClear Transactions which have been presented 

for clearing but in respect of which any Necessary Consent has 

not been notified to the Clearing House prior to the LCH Cut-off 

Time. The "LCH Cut-off Time" in respect of a ForexClear 

Transaction will be the expiry of the timeframe determined by 

the Clearing House. If an FXCCM has not notified the Clearing 

House of a Necessary Consent by the LCH Cut-off Time, it will 

be deemed to have rejected the relevant ForexClear Transaction. 

Any Necessary Consent of a ForexClear Transaction notified by 

an FXCCM to the Clearing House prior to the LCH Cut-off Time 

is irrevocable. Any Necessary Consent notified by an FXCCM 

to the Clearing House after the LCH Cut-off Time shall be 

invalid.
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(iii) In circumstances where the registration of a ForexClear 

Transaction is conditional upon one or more Necessary 

Consent(s) being notified by the applicable FXCCM(s), the 

relevant ForexClear Transaction shall be deemed to have been 

"submitted" to the Clearing House by each such FXCCM at the 

time when it notifies the Clearing House of its Necessary 

Consent. In all other circumstances, a ForexClear Transaction 

shall be "submitted" to the Clearing House by the applicable 

FXCCM upon being presented to the Clearing House for 

clearing by or on behalf of such FXCCM or by or on behalf of a 

ForexClear Dealer (acting in such capacity with respect to the 

relevant ForexClear Transaction) approved to clear ForexClear 

Transactions through the relevant FXCCM.

(iv) Where, in the context of a Default, the Clearing House executes 

a hedging ForexClear Transaction, which is:

(A) not a Trading Venue Transaction, with a Hedging 

ForexClear Service Clearing Member for the purpose of 

Risk Neutralisation, and such ForexClear Transaction is 

presented for clearing to the Clearing House, the 

Defaulting FXCCM shall be deemed to have received a 

Notification, in respect of such ForexClear Transaction, 

and to have notified a Necessary Consent, in respect of 

such ForexClear Transaction, to the Clearing House 

before the relevant LCH Cut-off Time; and

(B) a Trading Venue Transaction, with a Hedging 

ForexClear Service Clearing Member for the purpose of 

Risk Neutralisation, and such ForexClear Transaction is 

presented for clearing to the Clearing House, the Trading 

Venue on which such ForexClear Transaction was 

executed shall be deemed to be an Eligible Trading 

Venue, in respect of the Defaulting FXCCM, at the time 

of execution of such ForexClear Transaction and such 

ForexClear Transaction shall be deemed to be an Eligible 

Trading Venue Transaction, in respect of the Defaulting 

FXCCM.

(v) The Clearing House will (where applicable) apply a “Consent 

Validation Check” in respect of a ForexClear Transaction

presented for clearing that is not a Trading Venue Transaction in 

order to ensure that the Clearing House has received all required 

Necessary Consents, in accordance with Section 1.3.34(c)(ii).

(d) Registration

(i) Once it is confirmed that a ForexClear Transaction has passed 

the Validation Checks, and the Clearing House has determined 

to accept the ForexClear Transaction for registration, the 

Clearing House registers the ForexClear Transaction as two 
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ForexClear Contracts and changes the status for each ForexClear 

Transaction to "NOVATED".

(ii) The Clearing House acknowledges the ForexClear Contract 

status and sends a message to the entities specified in Section 

1.3.34(a)(iii) that the ForexClear Transaction is registered and

"NOVATED".

(iii) Where, in the context of a Default, the Clearing House executes 

a hedging ForexClear Transaction with a Hedging ForexClear 

Service Clearing Member for the purpose of Risk Neutralisation, 

and such ForexClear Transaction is presented for clearing to the 

Clearing House, the Clearing House may determine (in its sole 

discretion) that any Validation Check(s) in respect of such 

ForexClear Transaction are deemed to have been passed. 

1.3.5 Trade Rejection

Trades presented for registration that do not meet the ForexClear Eligibility 

Criteria or any other requirement for registration under the Rulebook, including 

a trade (a) presented by or on behalf of an FXCCM in respect of a third party 

Executing Party other than an FXD where such trade was executed on a Trading 

Venue that was not at the time of execution of such trade an Eligible Trading 

Venue in respect of such FXCCM, (b) that (i) is not a Final Transaction, (ii) is 

presented by or on behalf of an FXCCM that, and (iii) was executed on a trading 

venue or facility that had not at the time of the execution of such trade been 

approved by the Clearing House as a Trading Venue, (c) whichthat contains 

invalid or incomplete message data, or (d) that is not a Sub-Block Trading 

Venue Transaction and with respect to which the Clearing House has not 

received sufficient Collateral (taking into account ForexClear Tolerance and/or

MER Buffer, if any) will, in each case, be rejected.

If a trade is presented to the Clearing House for registration and rejected, it may 

be re-presented for registration in the form of a new trade but with the same 

economic terms in accordance with, and subject to, the Rulebook and all 

Applicable Law, and such trade will, for the purposes of the Rulebook and upon 

such re-presentation, constitute a new trade.

1.3.6 Package Transactions

Subject to Clearing House availability, a ForexClear Clearing Member may, via 

an Approved Trade Source System, present to the Clearing House, in a single 

submission, a group of two or more ForexClear Transactions (which are not 

Final Transactions) for simultaneous registration (such group of ForexClear 

Transactions being a “Package Transaction”). A Package Transaction must be 

identified to the Clearing House at the time of its presentation in the format 

prescribed by the Clearing House. Where the Package Transaction is not 
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presented in the prescribed format, each constituent ForexClear Transaction 

within the Package Transaction will be rejected. 

Where the Clearing House receives a Package Transaction for registration it 

shall treat each ForexClear Transaction that forms part of the Package 

Transaction as a new ForexClear Transaction in accordance with the Rulebook 

and, where each constituent ForexClear Transaction within the Package 

Transaction meets the registration requirements as set out in the Rulebook 

(including the provision of Collateral, where applicable), the Clearing House 

will simultaneously register all of the ForexClear Transactions within that 

Package Transaction. Where one or more of the constituent ForexClear 

Transactions does not meet the Clearing House’s registration requirements then 

all of the constituent ForexClear Transactions of the Package Transaction shall 

be rejected. 

Where a constituent ForexClear Transaction of a Package Transaction is a US

Trading Venue Transaction, it is a condition of registration that all of the

constituent ForexClear Transactions be US Trading Venue Transactions; where 

such condition is not met, all constituent ForexClear Transactions of the

Package Transaction will be rejected. In respect of a Package Transaction

comprising ForexClear Transactions that are not executed on any US Trading

Venue, the Clearing House will send a Notification to the relevant ForexClear

Clearing Member(s) for the acceptance of each such constituent ForexClear

Transaction.

In respect of a Package Transaction submitted in a ForexClear Clearing

Member’s name, such ForexClear Clearing member’s margin requirement will 

be assessed based on the net margin call for all of the constituent ForexClear 

Transactions of such Package Transaction.

The Clearing House may limit the number of ForexClear Transactions that may 

be included in a Package Transaction by way of member circular.

1.3.7 Manual Trade Rejection, Novation and Cancellation (Exceptional Event)

(a) From time to time, as an exceptional event, it may be necessary for the 

Clearing House to: (i) reject a trade submitted for registration; (ii) 

register a ForexClear Transaction; or (iii) accept or reject a cancellation 

request for a ForexClear Contract or a ForexClear Transaction, in each 

case, manually prior to a Margin and Settlement Run (e.g. in the case of 

a Default, when a ForexClear Transaction needs to be registered 

immediately to expedite the hedging and auction process or to reject a 

ForexClear Transaction received from an FXCCM which is a Defaulter).

(b) The Clearing House acknowledges the action:

(i) in respect of trades being manually rejected or manually 

registered, by notifying the relevant entities specified in Section 

1.3.34(a)(iii) of such rejection or registration (as applicable); and
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(ii) in respect of a ForexClear Contract or a ForexClear Transaction 

being manually cancelled, by sending a message to the 

ForexClear Approved Trade Source System that it is 

“CANCELLED”.

1.3.8 Trade Cancellation

(a) The Clearing House accepts cancellation messages from FXPs against 

both non-novated trades (ForexClear Transactions (other than Final

Transactions) and novated trades (ForexClear Contracts (other than 

ForexClear Contracts arising from the clearing of Final Transactions).

(b) Cancellation messages may be submitted via the ForexClear Approved 

Trade Source System (i),) with respect to any ForexClear NonDeliverable Contract, until such ForexClear Contract is "fixed" – (i.e. 

when its Settlement Rate has been determined on the relevant Valuation 

Date,), (ii) with respect to any ForexClear Option Contract, until the end 

of day on the Business Day preceding the relevant Expiration Date, and 

(iii) with respect to any ForexClear Spot Contract, ForexClear Swap 

Contract or ForexClear Deliverable Forward Contract, until the end of 

day two Business Days immediately preceding the Settlement Date.

(c) A successful cancellation message results in a "CANCELLED" status 

message if the ForexClear Transaction or the ForexClear Contract (as 

the case may be) is cancelled during the Opening Hours. The status 

messages are sent from the Clearing House to the FXCCM via the 

ForexClear Approved Trade Source System.

(d) There is no ForexClear Contract or ForexClear Transaction amendment 

functionality.

(e) Process Flow Description

(i) The Clearing House accepts trade cancellation instructions from 

the ForexClear Approved Trade Source System for ForexClear 

Transactions (other than Final Transactions) or ForexClear 

Contracts (other than ForexClear Contracts arising from the 

clearing of Final Transactions), as the case may be), that have 

previously been submitted to the ForexClear Service. 

Cancellation instructions must include the ForexClear ID.

(ii) The Clearing House checks that the cancellation instruction 

contains a valid ForexClear ID which relates to: (a) a ForexClear 

Transaction or ForexClear Contract (as the case may be) that has 

not been previously cancelled; and (b) in the case of a ForexClear

Non-Deliverable Contract only, a ForexClear Contract with 

respect to which the relevant Valuation Date has not yet occurred.

(iii) Where a trade has already been rejected (e.g. as a result of having 

failed a Counterparty Technical Validation Check), the 

ForexClear Service sends a "CANCEL REJECTED" message to 
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the ForexClear Approved Trade Source System for the relevant 

FXPs.

(iv) All trade cancellation instructions must pass the Incremental 

Risk Check and Settlement Exposure Limit Check, where

applicable. If any FXCCM has not transferred sufficient 

Collateral in respect of its Liabilities or estimated Liabilities to 

the Clearing House (taking into account ForexClear Tolerance 

and/or MER Buffer, if any) at the time of the relevant 

Incremental Risk Check or Settlement Exposure Limit Check, as 

applicable, then any ForexClear trade cancellation instruction to 

which it is a party will be rejected immediately. However, any 

ForexClear trade cancellation instruction that is risk reducing (i.e. 

results in a reduction of that FXCCM's Liabilities) will always 

pass the Incremental Risk Check, even if the FXCCM has not 

transferred sufficient Collateral in respect of its Liabilities to the 

Clearing House.

1.3.9 Valuation Date Event Management: The Clearing House is the Calculation 

Agent and will store and apply the Settlement Rate Option and the Valuation 

Date for each ForexClear Non-Deliverable Contract.

On the Valuation Date with respect to each ForexClear Non-Deliverable

Contract, the Settlement Rate will be retrieved as set forth in paragraph (a) 

below. The Market Data provider for Settlement Rates is Reuters.

ForexClear applies the relevant Settlement Rate to ForexClear Non-Deliverable

Contracts using the following criteria:

(a) Settlement Rate Option source; and

(b) Valuation Date.

The Clearing House applies the Settlement Rate to all relevant ForexClear NonDeliverable Contracts at a predefined time following its publication.

The Clearing House calculates the Settlement Currency Amount in the 

Settlement Currency per ForexClear Non-Deliverable Contract. FXCCMs can 

retrieve the Settlement Rate and Settlement Currency Amount in the Settlement 

Currency via ForexClear Reporting (as defined in Section 1.7 (ForexClear 

Reporting)) on the ForexClear Service Portal and on MemWeb, which are 

internet services onto which information is loaded and can be accessed by 

FXCCMs.

(c) Process Flow Description

(i) After the Registration Time for a ForexClear Non-Deliverable

Contract, the ForexClear Service links a Settlement Rate Option 

to it in accordance with the Relevant EMTA Template or given 

LCH Non-EMTA Contract Template, as applicable.
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(ii) On the Valuation Date, the Clearing House uses the Settlement 

Rate for the Currency Pair for the ForexClear Non-Deliverable

Contract when it is published by Reuters, and calculates the 

Settlement Currency Amount for each ForexClear NonDeliverable Contract in the Settlement Currency by applying the 

relevant Settlement Rate Option as referenced in the Relevant 

EMTA Template or given LCH Non-EMTA Contract Template, 

as applicable.

1.3.10 If the Settlement Rate Option set out in the Relevant EMTA Template or given 

LCH Non-EMTA Contract Template, as applicable, is unavailable at the 

relevant time, Disruption Fallback alternatives for the determination of the 

Settlement Rate will apply as set out in the Relevant EMTA Template or given 

LCH Non-EMTA. Notwithstanding the foregoing, in the event the Clearing 

House determines (in its sole discretion) that a Settlement Rate Option is 

unavailable, the Clearing House will determine an alternative Settlement Rate 

Option.

1.3.11 Settlement: With respect to each ForexClear Non-Deliverable Contract, the 

Settlement Currency Amount is calculated by the application of the Settlement 

Rate to the Notional Amount in accordance with the relevant ForexClear

Contract Terms.

From (and including) the Registration Time to (and including) the business day 

immediately preceding the Settlement Date, changes in the daily value of open 

ForexClear Non-Deliverable Contracts will have resulted in variation margin 

credits and debits or NPV Payments between the parties (as set out at Section 

1.5.2 (Variation Margin and NPV Payments)). With respect to each ForexClear

Non-Deliverable Contract, on the business day immediately preceding the 

Settlement Date, the Clearing House nets the Settlement Currency Amount 

against the aggregate net variation margin or aggregate NPV Payments (as 

applicable) which have been paid/received through the term of the ForexClear 

Non-Deliverable Contract, the result of which is a Net Settlement Amount 

("NSA"), which will be reflected in the FXCCMs' cash accounts with the 

Clearing House on the Settlement Date. As such, with respect to each 

ForexClear Non-Deliverable Contract, the transfer to the Clearing House of 

either (i) all the Collateral in respect of the variation margin in respect that 

ForexClear Non-Deliverable Contract, or (ii) all the NPV Payments required 

pursuant to the relevant ForexClear STM Terms of that ForexClear NonDeliverable Contract shall satisfy the relevant party's obligation to pay the 

Settlement Currency Amount on the Settlement Date of such ForexClear NonDeliverable Contract. For the purpose of providing Nostro reconciliations, to 

the relevant parties, the Clearing House will provide Reporting (as defined in 

Section 1.7 (ForexClear Reporting)) which will reflect an entry for the 

"Settlement Currency Amount" and a separate entry for the reversal of the 

aggregate net variation margin or NPV Payments which have been 

paid/received through the term of the ForexClear Non-Deliverable Contract. 

This paragraph applies even if the Settlement Date has been adjusted in 

accordance with the relevant ForexClear Contract Terms.
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1.3.12 Portfolio Transfers (BAU). The Clearing House permits the transfer of one or 

more Transferring ForexClear Contracts between the Transfer Account of an 

Eligible Transferor to the Transfer Account of an Eligible Transferee, including, 

where relevant, the transfer of an Associated Collateral Balance. For the 

avoidance of doubt, and subject to the requirements of FCM Regulation 49(r), 

an FXCCM acting for its own account or for the account of an FCM Client, may 

be an Eligible Transferor or an Eligible Transferee.

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 95 and this Section

1.3.121.3.121.3.1112. 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; 
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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

(g) any transfer that the Clearing House otherwise approves in its sole 

discretion.

Transfer Requests

Each transfer request (“Transfer Request”) pursuant to Regulation 95, this 

Section 1.3.121.3.121.3.1112 and (where applicable) any relevant Collateral 

Management Agreement may only be made in respect of a Permitted Transfer 

and must be prepared and submitted in the form and manner prescribed by the 

Clearing House from time to time. Following receipt of a Transfer Request, the 

Clearing House shall notify the Carrying Clearing Member that it received a 

Transfer Request to transfer Transferring ForexClear Contracts.

In respect of any Permitted Transfer that involves the transfer of all (and not 

some) of the ForexClear Contracts from the Transfer Account of an Eligible 

Transferor (with or without the transfer of an Associated Collateral Balance), 

once the Carrying Clearing Member receives notice that a Transfer Request has 

been received, the Carrying Clearing Member shall not be permitted to submit 

additional ForexClear Contracts in the Transfer Account of the Eligible 

Transferor whose ForexClear Contracts are to be subject to transfer until the 

time at which the relevant transfer (including the transfer of any relevant 

Associated Collateral Balance, if applicable) is effected, fails or is rejected in 

accordance with Regulation 95, these Procedures and (where applicable) any 

relevant Collateral Management Agreement.

Transfer Notice Period

The timing for Transfer Requests will be as prescribed by the Clearing House 

by way of a member circular.

Conditions Precedent to Permitted Transfer

It is a condition precedent to any transfer pursuant to Regulation 95 and this 

Section 1.3.121.3.121.3.1112 that:

(h) the transfer is a Permitted Transfer;

(i) the Receiving Clearing Member has provided the Clearing House with:

(i) a Transfer Request in the form and manner prescribed by the 

Clearing House, which may be submitted by a Clearing Client 

(including an FCM Client) on its behalf; and
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(ii) such evidence of the authorisation of the Permitted Transfer by 

the Eligible Transferor, Eligible Transferee and the ForexClear 

Clearing Client, as applicable, as the Clearing House may 

require in its sole discretion;

(j) neither the Eligible Transferor, the Eligible Transferee nor the 

ForexClear Clearing Client, as applicable, has become insolvent (each 

Eligible Transferor, Eligible Transferee and ForexClear Clearing Client, 

as the case may be, will be presumed to be solvent by the Clearing House 

unless evidenced to the contrary by the Carrying Clearing Member in 

the manner reasonably determined by the Clearing House);

(k) neither the Carrying Clearing Member nor the Receiving Clearing 

Member is a Defaulter;

(l) such transfer would not violate or result in the violation of Applicable 

Law, including:

(i) the authorisation, registration or other regulatory requirements, 

if any, that may apply to the Receiving Clearing Member as a 

consequence of the transfer; and

(ii) where the transfer leads to a change in beneficial ownership, the 

requirements, if any, that may apply to the method of execution 

by which the Eligible Transferor has sold the Transferring 

ForexClear Contracts to the Eligible Transferee;

(m) the Eligible Transferor, Eligible Transferee, the Receiving Clearing 

Member, the Carrying Clearing Member and ForexClear Clearing Client, 

as applicable, have each executed all documents necessary or required 

by the Clearing House in order to effect such transfer (including, where 

applicable, a Security Deed, Deed of Charge, Client Charge, Collateral 

Management Agreement, Clearing Membership Agreement and/or a 

Clearing Agreement);

(n) the Receiving Clearing Member has consented to the transfer of the 

Transferring ForexClear Contracts and, where relevant, the Associated 

Collateral Balance;

(o) the Receiving Clearing Member has transferred (or has made available) 

sufficient Collateral to the Clearing House in respect of its current 

ForexClear Contracts and the Transferring ForexClear Contracts; 

(p) the Carrying Clearing Member has not rejected such transfer in 

accordance with this Section 1.3.121.3.121.3.1112 (it being presumed 

that the Carrying Clearing Member has not so rejected the transfer 

unless evidenced to the contrary by the Carrying Clearing Member in 
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accordance with this Section 1.3.121.3.121.3.1112 or as otherwise 

reasonably determined by the Clearing House);

(q) in the event that the transfer will lead to a requirement for the Carrying 

Clearing Member to transfer (or make available) additional Collateral or 

any other payment to the Clearing House, the Carrying Clearing 

Member transfers sufficient Collateral or makes such payment to the 

Clearing House; and

(r) in relation to a Custodial Segregated Account, any additional conditions 

that have been agreed between the Clearing House, the Carrying 

Clearing Member, the Receiving Clearing Member and/or any Custodial 

Segregated Client have been satisfied.

In the event that any of the conditions set forth above are not satisfied, including 

where the Carrying Clearing Member notifies the Clearing House that certain 

conditions have not been satisfied in a manner reasonably acceptable to the 

Clearing House, the Clearing House shall not proceed with the transfer of the

Transferring ForexClear Contracts or, if applicable, the transfer of any 

Associated Collateral Balance, and shall promptly notify the Receiving Clearing 

Member of such outcome. If the Receiving Clearing Member wishes to proceed 

with such transfer or any other transfer of Transferring ForexClear Contracts of 

the Eligible Transferor(s), it shall be required to submit a new Transfer Request 

in accordance with these Procedures.

By requesting a transfer of the Transferring ForexClear Contracts from the 

Transfer Account of an Eligible Transferor and, if applicable, the associated 

Collateral pursuant to Regulation 95, this Section 1.3.121.3.121.3.1112and 

(where applicable) any relevant Collateral Management Agreement, including 

a request submitted by a Clearing Client (including an FCM Client) on its behalf, 

the Receiving Clearing Member shall be deemed to have represented to the 

Clearing House that all of the conditions to such transfer set forth herein have 

been satisfied.

Rejection of Transfer Request

The Carrying Clearing Member may be entitled to reject a particular Transfer 

Request by notifying the Clearing House (in either electronic or written form as 

prescribed by the Clearing House) only if:

(s) the Eligible Transferor has failed to satisfy all outstanding obligations 

that are due and payable to the Carrying Clearing Member and/or its 

Affiliates, including any requirement for additional collateral that may 

result from the proposed transfer, where, with the respect to obligations 

owed to Affiliates of the Carrying Clearing Member by an Eligible 

Transferor, “obligations” shall consist only of those obligations that 

arise as a result of cross-margining, cross-netting or other similar 

arrangements with respect to the Transferring ForexClear Contracts of 
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that Eligible Transferor that are being transferred or that Eligible 

Transferor’s related collateral;

(t) the transfer of the Transferring ForexClear Contracts of that Eligible 

Transferor would result in the Eligible Transferor breaching exposure 

limits with, and/or other risk parameters set by, the Carrying Clearing 

Member and/or its Affiliates; or

(u) such rejection is in accordance with terms agreed as between the 

Carrying Clearing Member and the relevant Eligible Transferor.

Right to Call Collateral

Permitted Transfers will only be effected once adequate Collateral is available 

(which may be as a consequence of margin forbearance or the transfer of 

Associated Collateral Balance) in respect of both Transfer Accounts affected by 

the transfer. In connection with any Permitted Transfer, the Clearing House may 

call for Collateral in respect of initial and/or variation margin to be deposited in 

such amounts and at such times as the Clearing House, in its sole discretion, 

requires. Any Collateral so called and deposited shall be reserved and made 

available solely in connection with the Permitted Transfer.

Transfer of Associated Collateral Balance

Where a Receiving Clearing Member notifies the Clearing House of a proposal 

to transfer an Associated Collateral Balance in connection with a Permitted 

Transfer, the Clearing House shall notify the Carrying Clearing Member of such 

request. Following such notification and upon request from the Clearing House, 

the Carrying Clearing Member shall confirm to the Clearing House the specific 

collateral that should comprise such Associated Collateral Balance(s). In the 

event that the Carrying Clearing Member fails to notify the Clearing House of 

the specific collateral that should comprise the Associated Collateral Balance(s), 

the Clearing House shall identify and select the Collateral it deems appropriate 

to comprise the Associated Collateral Balance(s) attributable to the Transferring 

ForexClear Contracts, in its sole discretion. Any Collateral so identified shall 

be reserved and made available solely in connection with the Permitted Transfer. 

Once the relevant Associated Collateral Balance(s) of the transfer have been 

notified by the Clearing House to the Receiving Clearing Member, the 

Receiving Clearing Member may elect to reject the transfer of some or all of 

such Associated Collateral Balance(s).

Any such election will not, of itself, prevent the transfer of the Transferring 

ForexClear Contracts of the Eligible Transferor and any Associated Collateral 

Balance that has been accepted by the Receiving Clearing Member, provided 

that the conditions set out above are satisfied in relation to such transfer. The 

Clearing House shall transfer the Associated Collateral Balance that has been 

identified and consented to by the Receiving Clearing Member. In the event that, 

for whatever reason, the Clearing House is unable to transfer such Associated 

Collateral Balance, the Clearing House will not proceed with the transfer of the 

Transferring ForexClear Contracts. In such circumstances, the Clearing House 

will notify the Receiving Clearing Member that the Associated Collateral 
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Balance will not be transferred and, in order to proceed with the transfer of the 

associated Transferring ForexClear Contracts, the Receiving Clearing Member 

will have to furnish to the Clearing House sufficient collateral in respect of the 

Transferring ForexClear Contracts.

In the case where a transfer of Transferring ForexClear Contracts pursuant to 

this Section 1.3.121.3.121.3.1112 will include the transfer of Associated 

Collateral Balance(s) to the Transfer Account of the Eligible Transferee:

(v) in respect of Associated Collateral Balance that is subject to a Deed of 

Charge entered into between the Carrying Clearing Member and the 

Clearing House, such transfer shall be effected as follows:

(i) the Carrying Clearing Member shall relinquish all rights to such 

Associated Collateral Balance (including, for the avoidance of 

doubt, any beneficial interest and/or equity of redemption in 

respect thereof);

(ii) such Associated Collateral Balance shall immediately upon such 

relinquishment be held by the Clearing House on behalf of the 

Receiving Clearing Member;

(iii) where the Receiving Clearing Member is not an FCM Clearing 

Member, its rights to such Associated Collateral Balance arising 

as described in 1.3.12(v)(ii)1.3.12(v)(ii)1.3.1112(v)(ii) above 

shall become, in respect of the Transferring ForexClear 

Contracts, subject to the relevant Deed of Charge entered into 

between the Receiving Clearing Member and the Clearing House 

(such rights thereby becoming Charged Property within the 

meaning of that Deed of Charge); and

(iv) where the Receiving Clearing Member is an FCM Clearing 

Member, the Associated Collateral Balance shall be deemed to 

have been delivered by the Receiving Clearing Member to the 

Clearing House by way of a first-priority security interest 

granted by the Receiving Clearing Member to the Clearing 

House under the FCM Regulations and the FCM Clearing 

Membership Agreement between the Receiving Clearing 

Member and the Clearing House;

(w) in respect of any part of an Associated Collateral Balance that is not 

subject to a Client Charge or the Deed of Charge entered into between 

the Carrying Clearing Member and the Clearing House, such transfer 

shall be by novation of the Carrying Clearing Member’s rights and 

obligations in respect of such part of the Associated Collateral Balance 

to the Receiving Clearing Member;

(x) in respect of any part of an Associated Collateral Balance that is subject 

to the Client Charge entered into between a Custodial Segregated Client, 

the Clearing House and the Carrying Clearing Member, such transfer 

shall be effected as set out in and in accordance with: (i) the relevant 
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Collateral Management Agreement entered into between such Custodial 

Segregated Client, the Clearing House and the Carrying Clearing 

Member, and (ii) the relevant Collateral Management Agreement 

entered into between such Custodial Segregated Client, the Clearing 

House and the Receiving Clearing Member;

(y) for the avoidance of doubt, the Carrying Clearing Member shall have no 

right or entitlement to assert any claim over, or right with respect to, the 

transferred Associated Collateral Balance;

(z) LCH shall promptly transfer the Transferring ForexClear Contracts and 

Associated Collateral Balance, and the transfer of the Transferring 

ForexClear Contracts shall be conditioned on the transfer of the 

Associated Collateral Balance, and vice versa;

(aa) if the transfer of the Transferring ForexClear Contracts and Associated 

Collateral Balance is not completed for any reason, then any actual 

transfer of any part of the Associated Collateral Balance or Transferring 

ForexClear Contracts that has occurred, as the case may be, shall be 

deemed not to have occurred, and any actual transfer of any part of the 

Associated Collateral Balance or Transferring ForexClear Contracts that 

has occurred shall be immediately unwound;

(bb) that portion (if any) of:

(i) the Clearing House Current Collateral Balance in respect of the 

Carrying Clearing Member which is attributable to the 

Transferring ForexClear Contracts (the “Relevant Portion”) 

shall be reduced to zero; and

(ii) the Clearing House Current Collateral Balance in respect of the 

Receiving Clearing Member shall be increased by an amount 

equal to the value of the Relevant Portion immediately prior to 

the reduction referred to in (i) immediately above.

Verification and Reliance

Subject to the following paragraph, but otherwise notwithstanding anything to 

the contrary in the Regulations or these Procedures, in making any Transfer 

Request in accordance with Regulation 95 and this Section 

1.3.121.3.121.3.1112 and (where applicable) any relevant Collateral 

Management Agreement, the Clearing House shall be authorised 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 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 
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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.

Intra-Clearing Member Transfers

In connection with any Permitted Transfer of Transferring ForexClear Contracts 

where the Transfer Account of the Eligible Transferor and the Transfer Account 

of the Eligible Transferee are held by the same FXCCM (i.e., where the same 

FXCCM serves as both the Carrying Clearing Member and the Receiving 

Clearing Member), such FXCCM shall be deemed to make the following 

agreements, acknowledgements and representations:

(cc) the contractual terms of the Transferring ForexClear Contracts will not 

change solely as a result of the Clearing House effecting the Permitted 

Transfer;

(dd) the FXCCM will remain liable to the Clearing House for all obligations 

under the Transferring ForexClear Contracts prior to, during and after 

the Permitted Transfer;

(ee) the Clearing House may require that certain changes be made to the 

books and records of one of more Approved Trade Source Systems in 

order to reflect the Permitted Transfer;

(ff) the Clearing House is acting solely upon the FXCCM’s instructions as 

detailed to the Clearing House in writing and in reliance on the 

FXCCM’s agreements and representations (including as set out in this 

Section 1.3.121.3.121.3.1112) in connection therewith;

(gg) the Permitted Transfer is permissible under Applicable Law and is not 

in violation of Applicable Law, and the FXCCM has obtained any and 

all necessary and appropriate consents, authorisations and approvals, 

and has taken any other actions required under Applicable Law in 

connection with the Permitted Transfer; and

(hh) the Clearing House shall not be liable for any costs, expenses, damages 

or losses, whether direct or indirect, suffered by any of the parties hereto, 

or by the Eligible Transferor or Eligible Transferee, as a result of any 

actions taken by the Clearing House in connection with the Permitted 

Transfer.

Fees

Any Permitted Transfer effected pursuant to Regulation 95 and in accordance 

with these Procedures and (where applicable) any relevant Collateral 

Management Agreement 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.

The portfolio transfer capability allows the transfer of:
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(ii) A single ForexClear Contract.

(jj) Part of an FXCCM's portfolio (which includes the ability to transfer 

ForexClear Contracts to various other FXCCMs, e.g. Bank A to Bank B 

for USD/RUB, Bank A to Bank C for USD/KRW and Bank A to Bank 

D for USD/BRL).

(kk) Portfolio transfer (i.e. the transfer of all or just one of the portfolios 

belonging to an FXCCM).

(ll) Multiple portfolio transfers (i.e. the transfer of several portfolios of an 

FXCCM).

The Clearing House will carry out the portfolio transfer. For transfers under (jj), 

(kk) and (ll), this can be on either (i) a ForexClear Contract by ForexClear 

Contract basis, or (ii) in respect of ForexClear Non-Deliverable Contracts, on a 

Currency Pair basis.

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 FXCCM regarding any additional 

Collateral that may be required in order to complete the portfolio transfer.

(mm) Legal Documentation: The transfer of ForexClear Contracts will be 

documented in accordance with the standard legal documentation for the 

transfer of ForexClear Contracts provided by the Clearing House to 

FXPs. Any such transfer must be authorised by all relevant parties and 

executed by individuals with appropriate signing authority.

1.3.13 Reference Data

(a) Holiday Event Calendar: 

The ForexClear Service uses the SwapsMonitor Financial Calendar (as 

published by Swaps Monitor Publications, INC.) (“SwapsMonitor 

Financial Calendar”) in order to determine holidays. This requires all 

ForexClear Participants to be licensees of the SwapsMonitor Financial 

Calendar.

If a change is declared that affects the SwapsMonitor Financial Calendar

then, subject to paragraph (b) below, a corresponding calendar 

adjustment will be made in the ForexClear system, unless the Clearing 

House notifies FXCCMs otherwise that the relevant change will not 

apply to ForexClear Contracts. The Clearing House may temporarily 

close the ForexClear Service to process a calendar adjustment in its 

clearing system. FXCCMs will be notified in advance of the date, time 

and expected duration of such closure.

(b) Date Adjustment: 

As a result of the calendar adjustment process, (i) the Valuation Date 

and/or the Settlement Date of any affected ForexClear Non-Deliverable
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Contracts will automatically be date adjusted in accordance with the 

provisions of the Relevant EMTA Template or given LCH Non-EMTA

Contract Template, as applicable and (ii) the Settlement Date of any 

affected ForexClear Deliverable Contract will automatically be date 

adjusted in accordance with the Following Business Day Convention, as 

detailed in the Relevant EMTA 

Template.

Without limiting the foregoing, the Clearing House reserves the right to

amend the Valuation Date and/or Settlement Date of a ForexClear

Contract to reflect or account for a public holiday (or anticipated public

holiday), in its sole discretion.

The Clearing House will notify the FXCCMs of any date adjustments 

made to any ForexClear Contract.

1.3.14 ForexClear Tolerance

In order to facilitate the registration of ForexClear Contracts by 

FXCCMs, the Clearing House may, in its sole discretion, provide 

FXCCMs with temporary “tolerance” in the form of initial margin 

forbearance (“ForexClear Tolerance”). In the event an FXCCMs 

wishes to utilise 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). FXCCMs who are approved 

to utilise ForexClear Tolerance may choose not to utilize MER Buffer 

in connection with the registration of ForexClear Contracts (for the 

avoidance of doubt, the utilization of MER Buffer is compulsory for 

FXCCMs that do not opt-in to ForexClear Tolerance).

The Clearing House may apply ForexClear Tolerance between Margin 

and Settlement Runs in an amount equal to the value of the Collateral 

that would have been required to be transferred by the FXCCM to the 

Clearing House to cover the relevant Liabilities (or estimated Liabilities) 

to facilitate the registration of ForexClear Contracts. For the avoidance 

of doubt, ForexClear Tolerance is provided in the form of temporary 

initial margin forbearance and an FXCCM’s utilisation 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 FXCCM from time to time ("ForexClear Tolerance 

Limit"). The Clearing House will notify each FXCCM of its ForexClear 

Tolerance Limit and will, as soon as reasonably practicable, notify an 

FXCCM following any adjustment to the amount of its ForexClear 

Tolerance Limit. Except where the Clearing House exercises its right to 

reduce an FXCCM’s ForexClear Tolerance Limit in accordance with the 

foregoing, each FXCCM utilising ForexClear Tolerance shall have an 

equal ForexClear Tolerance Limit.
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The Clearing House may require an FXCCM to transfer Collateral to the 

Clearing House in respect of any utilisation of ForexClear Tolerance at 

any time and without prior notice to the FXCCM. Without limiting the 

foregoing, the Clearing House will call for Collateral to replenish the 

ForexClear Tolerance utilised by an FXCCM at (i) the last ITD/Ad-hoc 

Day Margin and Settlement Run and EOD Margin and Settlement Run 

of each business day and (ii) in the event an FXCCM utilises at least 

75% of its ForexClear Tolerance during a business day, at the next 

relevant ITD/Ad-hoc Day Margin and Settlement Run. Any failure of an 

FXCCM to satisfy a call for Collateral relating to ForexClear Tolerance 

may give rise to a Default by such FXCCM.

The Clearing House will not apply ForexClear Tolerance for ForexClear 

Contracts with a Trade Date earlier than the previous business day.

1.3.15 Minimum Excess Requirement Buffer

To facilitate the intraday registration of ForexClear Contracts, at each 

EOD Margin and Settlement Run, the Clearing House will call from 

each FXCCM an amount of Collateral in respect of its initial margin 

obligations in respect of that FXCCM's potential intraday Liabilities for 

the following day ("MER Buffer"), provided that the Clearing House 

shall not call MER Buffer from an FXCCM that (i) opted-in to 

ForexClear Tolerance in accordance with Section 1.3.141.3.141.3.1314

and (ii) opted-out of MER Buffer (the form and manner of such “optout” notice shall be prescribed by the Clearing House from time to time).

The required amount of MER Buffer for an FXCCM is expressed as a 

percentage of the FXCCM's start-of-day portfolio initial margin, and is 

calibrated daily based on recent (or prospective) member activity 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 

initial margin changes over a given number of historical business day.

The parameters of MER Buffer are: MER percentile, MER lookback 

period, relative MER cap and absolute MER floor. The values of these 

parameters are calibrated based on the quantitative analysis of the 

FXCCMs' initial margin history across the ForexClear Service.

As ForexClear Contracts are registered in an FXCCM's name, the 

Clearing House will, in accordance with the Margin or Settlement Run 

process, calculate an FXCCM's intraday Liabilities (or, in the case of an 

Incremental Risk Check, the FXCCM's estimated Liabilities), taking 

into account any MER Buffer.

At each EOD Margin and Settlement Run, the Clearing House will 

recalculate and call the FXCCM's MER Buffer for the following day.

1.3.16 Completion Margin. The Clearing House shall calculate and call each FXCCM 

for “completion margin.” Completion margin is a component of each 
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FXCCM’s initial margin obligation, and represents potential increases in an 

FXCCM’s initial margin obligations due to position changes resulting from 

next-day fixing, with respect to ForexClear Non-Deliverable Contracts, or nextday settlement, with respect to ForexClear Deliverable Contracts. Completion 

margin is calculated as the incremental difference between an FXCCM’s 

aggregate initial margin obligations on its ForexClear Contracts and its initial 

margin obligations in relation to ForexClear Contracts due to fix or settle the 

next business day, as applicable.

1.4 Market Data

1.4.1 Sources used by ForexClear Service: With respect to each ForexClear Contract, 

the ForexClear Service collates instrument quotes for the following from 

multiple market sources (as detailed in Section 1.4.2 (Market Data Sources and 

Frequencies)) in relation to each Currency Pair or ForexClear Currency Pair:

(a) FX spot rates ("FX Spot Rates");

(b) FX swap points ("FX Swap Points");

(c) FX implied volatility points (“FX Volatility Points”);

(d) FX Settlement Rate Option;

(e) Interest rate swap curves and Overnight index swap curves ("Interest 

Rate Curves");

(f) PAI rates ("PAI Rates") or PAA rates (“PAA Rates”), as applicable;

(g) Country credit spreads ("Country Credit Spreads"); and

(h) FX spot reference prices (“FX Spot Reference Prices”),

together, "Market Data".

FX Spot Rates, FX Swap Points and FX Volatility are received by the Clearing 

House via a live link from all eligible FXCCMs during the Opening Hours (as 

defined in paragraph (b) of Section 1.2.2 (Service Operating Hours)).

1.4.2 Market Data Sources and Frequencies: The Clearing House receives the 

following updated raw prices:

(a) FX Spot Rates:

(i) Source – contributing FXCCMs.

(ii) Frequency - every time updated by contributing FXCCMs up to 

a maximum rate of once every five minutes.

(b) FX Swap Points:

(i) Source - all contributing FXCCMs.
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(ii) Frequency - every time updated by contributing 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

(c) FX Volatility Points:

(i) Source – all contributing FXCCMs.

(ii) Frequency – every time updated by contributing FXCCMs up to 

a maximum rate of once every five minutes.

(iii) Deltas and Tenors – as shown in the tables below. All delta 

points should be contributed for each tenor.

Tenor

O/N

1 week

2 weeks

1 month

2 months

3 months

6 months

9 months

12 months

18 months

24 months

Deltas

ATM

25-RR

25-Fly

10-RR
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Deltas

10-Fly

(d) FX Non-Deliverable Settlement Rates:

(i) Source - Reuters.

(ii) Frequency - when published (as referenced in the Relevant 

EMTA Template or given LCH Non-EMTA Contract Template, 

as applicable).

(e) Interest Rate Curves:

(i) Source - internal Clearing House.

(ii) Frequency - at each SwapClear Margin or Settlement Run.

(f) PAI Rates and PAA Rates:

(i) Source - LCH Treasury.

(ii) Frequency - daily.

(g) Country Credit Spreads: 

(i) Source – Bloomberg.

(ii) Frequency – when published.

(h) FX Spot Reference Prices:

(i) Source – the source published on the ForexClear website from 

time to time.

(ii) Frequency – at each expiration time. 

1.4.3 Market Data Provision to FXCCMs: Market Data used in a Margin or 

Settlement Run is made available to FXCCMs via ForexClear Reporting (as 

defined in Section 1.7 (ForexClear Reporting)).

1.4.4 Curve Building in ForexClear

(a) 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 LIBOR 

Curve. The currency zero coupon curves are implied from the FX curve 

and the USD LIBOR Curve; the FX curve is used for capitalisation of 

forward cash flows. Cross rates spot and forward curves will be 

triangulated from the non cross currency pairs (i.e., the currency pairs 

where USD is one of the currencies). Linear interpolation is applied on 

zero coupon curves.
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(b) Implied Volatility Surface: The Clearing House builds for each Currency 

Pair or ForexClear Currency Pair an FX Implied Volatility Surface using 

the FX Volatility Points. Implied volatility interpolation is performed 

along both the delta and tenor axes. Interpolation is firstly applied on the 

delta axis of the two neighbouring implied volatility smiles, and then 

tenor axis interpolation is applied. To prevent arbitrages on the input 

volatility surfaces impacting on margining calculations, a de-arbitraging 

methodology is applied where an arbitrage exists on any reference 

volatility surfaces.

(c) Interest Rate Curve: The Clearing House applies standard bootstrap 

method to build the Interest Rate Curve. Linear interpolation is applied 

on zero coupon curves.

(d) Curve Use: End of day is defined as 22.00 local London time ("EOD"). 

The following EOD data is used in the calculation of risk analytics for 

an EOD Margin and Settlement Run (as defined in paragraph (b) of 

Section 1.6.1 (Types of Margin or Settlement Runs)):

(i) FX Spot Rates;

(ii) FX Swap Points; and

(iii) FX Volatility Points.

1.4.5 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.

1.5 Initial Margin; Variation Margin and NPV Payments

1.5.1 Product Valuation

(a) ForexClear Non-Deliverable Contract: From (and including) the 

Registration Time to the EOD Margin and Settlement Run on the 

business day preceding the Valuation Date, each ForexClear NonDeliverable Contract is valued in USD using the current market rates 

and discounted from the future Settlement Date to its present value 

(being valued using the data submitted by FXCCMs, in accordance with 

Section 1.4.2 (Market Data Sources and Frequencies).

At EOD on the Valuation Date, the Settlement Rate is used to value the 

ForexClear Non-Deliverable Contract.

If Valuation Postponement applies, the ForexClear Non-Deliverable

Contract is valued using the current forward price (based on the data 

submitted by FXCCMs, in accordance with Section 1.4.2 (Market Data 

Sources and Frequencies) to (and including) the date on which the 

Settlement Rate is determined in accordance with the relevant 

ForexClear Contract Terms.
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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) ForexClear Spot Contracts, ForexClear Deliverable Forward

Contracts and ForexClear Swap Contracts: From (and including) the

Registration Time to the EOD Margin and Settlement Run on the 

business day preceding the Settlement Date, each ForexClear Spot 

Contract, ForexClear Deliverable Forward Contract and ForexClear 

Swap Contract is valued in either USD or EUR using the current market 

rates and discounted from the future Settlement Date to its present value

(using the data submitted by FXCCMs, in accordance with Section 1.5.2 

(Market Data Sources and Frequencies)).

(c) ForexClear Option Contracts: From (and including) the Registration 

Time to the Expiration Date, each ForexClear Option Contract is valued 

in USD or EUR using the Garman-Kohlhagen option pricing model 

(using the data submitted by FXCCMs, in accordance with Section 1.5.2 

(Market Data Sources and Frequencies)).

1.5.2 Variation Margin and NPV Payments: A single separate calculation in respect 

of the variation margin or NPV Payment owed by or to the relevant FXCCM is

performed for that FXCCM's Proprietary Account, each Client Account (other 

than an Indirect Gross Account) and each Indirect Gross Sub-Account within 

an Indirect Gross Account. No offset between the Proprietary Accounts and 

Client Accounts accounts is allowed (except pursuant to Rule 8(d) of the Default 

Rules or any Insufficient Resources Determination Rule) and no offset between 

any Client Accounts is allowed (except pursuant to Rule 15(a)(ii) of the Default 

Rules, a Cross-ISA Client Excess Deduction or any Insufficient Resources 

Determination Rule).

The (i) variation margin requirement in respect of each ForexClear CTM 

Contract and (ii) the NPV Payments in respect of each ForexClear STM 

Contract are calculated at EOD as the change from the preceding business day 

in its net present value. The net sum of the variation margin requirements or 

NPV Payments (as applicable) with respect to all of the open ForexClear 

Contracts is credited or debited (separately for the Proprietary Account and each 

Client Account of the relevant FXCCM) once a day, following the EOD Margin

and Settlement Run.

Collateral in respect of variation margin (adjusted by PAI, as set out below) will 

be transferred each business day by or to each FXCCM in respect of all of its 

open ForexClear CTM Contracts. The variation margin will be calculated in, 

and must be paid in the ForexClear Margin or Settlement Currency applicable 

to that ForexClear CTM Contract. For the avoidance of doubt, in the case of a 

ForexClear CTM Contract, any transfers of cash Collateral by an FXCCM to 

the Clearing House in respect of the FXCCM's variation margin obligations or 

by the Clearing House to an FXCCM in respect of the Clearing House's 

variation margin obligations shall be for the purposes of collateralisation and 

not settlement of obligations under the relevant contracts.
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The NPV Payment (adjusted by PAA, as set out below), will be transferred each 

business day by or to each FXCCM in respect of all of its open ForexClear STM 

Contracts denominated in a given currency. Each NPV Payment in respect of a 

given ForexClear STM Contract will be calculated in, and must be paid in the 

ForexClear Margin or Settlement Currency applicable to that ForexClear STM 

Contract.

With respect to each ForexClear Contract, the variation margin requirement or 

NPV Payment (as applicable) 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.

For the avoidance of doubt, “variation margin” and “NPV Payment” as used 

herein shall include variation margin and NPV Payments in respect of both the 

and premium owed under a ForexClear Deliverable Contract and all other 

obligations under the terms of that ForexClear Deliverable Contract.

Any NPV Payment made by an FXCCM to the Clearing House under a 

ForexClear STM Contract, or by the Clearing House to an FXCCM under a 

ForexClear STM Contract, shall be for the purpose of settlement of the 

applicable party’s obligation to pay the required NPV Payment pursuant to the 

terms of that ForexClear STM Contract and not for the purpose of 

collateralising any obligations of either party under that ForexClear STM 

Contract.

1.5.3 Reporting Breakdown: ForexClear margin reports show the portfolio of open 

ForexClear Non-Deliverable Contracts of each FXCCM and of each FXD by 

Currency Pairs and in the Settlement Currency (i.e., USD). ForexClear margin 

reports also show the portfolio of open ForexClear Deliverable of each FXCCM 

and of each FXD by ForexClear Currency Pair.

1.5.4 Price Alignment Interest ("PAI"): The effect of daily transfers of cash

Collateral in respect of variation margin on ForexClear CTM Contracts results 

in the need for PAI. Without this adjustment, the pricing of ForexClear CTM 

Contracts would differ from identical uncleared trades, as cash earned from 

favourable daily price moves would be priced into the product.

(a) PAI Calculation Methodology: PAI is 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, and the currency in which the PAI payment is 

denominated for a given ForexClear CTM Contract shall be the 

ForexClear Margin or Settlement Currency of that ForexClear CTM 

Contract.

In this Section 1.5.4 (Price Alignment Interest), "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 "MTM" 

means the total value (expressed in the relevant currency) of an 

FXCCM's portfolio open of ForexClear CTM Contracts after valuation 

in accordance with Section 1.5.2 (Variation Margin and NPV Payments)
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at close of business on any business day. The Clearing House calculates 

PAI in USD once a day at EOD.

(i) Principles:

(A) MTM is calculated at EOD on T-1.

(B) Change in MTM (net variation margin obligations in 

respect of an FXCCM's portfolio of open ForexClear 

CTM Contracts) is paid/ received on the morning of T.

(C) PAI Rate for T to be applied is known at EOD T.

(D) PAI is calculated on the night of T, for MTM of T-1 for 

ForexClear CTM Contracts up to the business day before 

their Settlement Date.

(E) PAI is paid / received on morning of T+1 via PPS.

(ii) Components:

(A) PAI Rate (annualised interest applied to an FXCCM's 

MTM).

(B) MTM.

(C) Accrual Factor (factor used to convert the PAI Rate from 

an annual rate to a daily rate, on a basis of a year of 360 

days).

(iii) So:

(A) PAI T = PAIT Rate x MTMT-1 x Accrual Factor.

The Clearing House uses the PAI Rate from the relevant EOD overnight 

index swap curves, which is sourced from the Clearing House.

(b) Variation Margin/PAI Adjustment: With respect to each FXCCM, the 

Clearing House makes the following adjustment to the EOD variation 

margin:

(i) if, with respect to its portfolio of open ForexClear CTM

Contracts, such FXCCM has (to but excluding the relevant EOD) 

paid an amount of Collateral in respect of variation margin

greater than the amount of Collateral in respect of variation 

margin it has received, such FXCCM will receive PAI; and

(ii) if, with respect to its portfolio of open ForexClear CTM 

Contracts, such FXCCM has (to but excluding the relevant EOD) 

received an amount of Collateral in respect of variation margin

greater than the amount of Collateral in respect of variation 

margin it has provided, such FXCCM will pay PAI.
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1.5.5 Price Alignment Amount (“PAA”): The payment of NPV Payments by the 

applicable party on a daily basis would, without adjustment, distort the pricing 

for certain ForexClear STM Contracts cleared through the Clearing House. In 

order to minimise the impact of such NPV Payments, the Clearing House will, 

for an FXCCM, either (i) charge a Price Alignment Amount if that FXCCM has, 

on a cumulative net basis, received NPV Payments from the Clearing House, or 

(ii) pay a Price Alignment Amount if that FXCCM has, on a cumulative net 

basis, paid NPV Payments to the Clearing House. In a negative interest rate 

environment where the applicable Price Alignment Amount is negative, the 

Clearing House will, for an FXCCM either (i) pay a Price Alignment Amount 

if that FXCCM has, on a cumulative net basis, received NPV Payments from 

the Clearing House, or (ii) charge a Price Alignment Amount if that FXCCM 

has, on a cumulative net basis, paid NPV Payments to the Clearing House.

(a) PAA Calculation Methodology: PAA is 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, and the currency in which the PAA payment is 

denominated for a given ForexClear STM Contract shall be the 

ForexClear Margin or Settlement Currency of that ForexClear STM 

Contract.

In this Section 1.5.5 (Price Alignment Amount), "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 "MTM" 

means the total value (expressed in the relevant currency) of an 

FXCCM's portfolio open of ForexClear STM Contracts after valuation 

in accordance with Section 1.5.2 (Variation Margin and NPV Payments)

at close of business on any business day. The Clearing House calculates 

PAA once a day at EOD.

(i) Principles:

(A) MTM is calculated at EOD on T-1.

(B) Change in MTM (net NPV Payment obligations in 

respect of an FXCCM's portfolio of open ForexClear 

STM Contracts) is paid/ received on the morning of T.

(C) PAA Rate for T to be applied is known at EOD T.

(D) PAA is calculated on the night of T, for MTM of T-1 for 

ForexClear Contracts up to the business day before their 

Settlement Date.

(E) PAA is paid / received on morning of T+1 via PPS.

(ii) Components:

(A) PAA Rate (annualised interest applied to an FXCCM's 

MTM).
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(B) MTM.

(C) Accrual Factor (factor used to convert the PAA Rate 

from an annual rate to a daily rate, on a basis of a year of 

360 days).

(iii) So:

(A) PAA T = PAAT Rate x MTMT-1 x Accrual Factor.

The Clearing House uses the PAA Rate from the relevant EOD 

overnight index swap curves, which is sourced from the Clearing House.

1.5.6 Initial Margin: The Clearing House will require FXCCMs to transfer Collateral 

to the Clearing House in respect of initial margin. Each FXCCM’s initial margin 

obligation will comprise the aggregate of the initial margin obligations 

separately calculated in relation to (i) the ForexClear Non-Deliverable Service

and (ii) the ForexClear Deliverable Service.

(a) Calculation of Initial Margin: Separate initial margin calculations are 

performed for an FXCCM's Proprietary Account, each Client Account

(other than an Indirect Gross Account) and each Indirect Gross SubAccount within an Indirect Gross Account. No offset between the

Proprietary Accounts and the Client Accounts is allowed (except 

pursuant to Rule 8(d) of the Default Rules or any Insufficient Resources 

Determination Rule) and no offset between any Client Accounts is 

allowed (except pursuant to Rule 15(a)(ii) of the Default Rules, a CrossISA Client Excess Deduction or any Insufficient Resources 

Determination Rule).

The initial margin obligation is calculated on a real-time (or near realtime) basis throughout each day. With respect to each FXCCM, it is 

calculated for the portfolio of open ForexClear Contracts and 

ForexClear Transactions using ForexClear's Portfolio Analysis and Risk 

("FxPAR") margining model. FxPAR is based on a modified historical 

simulation expected shortfall methodology. All open ForexClear 

Contracts and ForexClear Transactions in each Currency Pair are revalued under a series of FX rate and yield curve scenarios to estimate 

the potential portfolio profit and loss and therefore the initial margin

requirement.

The adequacy of the initial margin calculation is reviewed daily. 

ForexClear Clearing Members will usually be notified by the Clearing 

House of alterations to margin model 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 market data submitted by FXCCMs pursuant to 

paragraph 1.5.1(a) (Product Valuation).
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Initial Margin Add-ons: Credit risk, liquidity risk and sovereign risk 

margin add-ons are measured and applied to FXCCMs as part of the 

initial margin requirement calculation.

(b) Credit Risk Margin ("CRiM"): CRiM reflects the additional risk related 

to the FXCCM’s credit quality. The CRiM calculation considers the 

FXCCM's credit worthiness, initial margin obligation level and/or stress 

testing exposures in accordance with LCH Credit Risk Policy.

(c) Liquidity Risk Margin (“LRM”): LRM reflects the additional risk due 

to the FXCCM having concentrated risk exposures above set thresholds 

in a particular Currency Pair or ForexClear Currency Pair or tenor of 

ForexClear Contracts. The LRM is calculated in accordance with 

parameters set by the ForexClear Default Management Group (the 

"FXDMG").

(d) Sovereign Risk Margin ("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 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.

(e) Settlement Management Margin ("SMM"): SMM reflects the additional 

risk associated with a potential settlement failure. The SMM calculation 

considers the FXCCM’s future settlement obligations in each of the 

relevant currencies and the potential cost of utilising and replenishing 

liquidity provisions, where required, to fulfil those settlement 

obligations.

(f) Default Fund Additional Margin: The Clearing House may from time to 

time require an FXCCM 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 FXCCM ("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 FXCCM has provided to meet its 

DFAM obligation to the FXCCM’s Proprietary Account.

(g) Additional Margin: The Clearing House may require an FXCCM to 

transfer additional Collateral to the Clearing House (in addition to

amounts of Collateral already transferred to the Clearing House in 

respect of any initial margin and variation margin obligations) as 

security for the performance by an FXCCM of its obligations to the 

Clearing House in respect of ForexClear Contracts to which such 

FXCCM is a party in accordance with Regulation 20 (Margin and 

Collateral). This may be required from time to time where, in the 

opinion of the Clearing House, the risk inherent in ForexClear Contracts 

to which such FXCCM is a party not adequately covered by the 

Collateral transferred in respect of the initial margin or any variation 
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margin obligations. This may cover instances where stress testing losses 

under various scenarios provided in the ForexClear Default Rules have 

increased.

1.5.7 Initial Margin Management Events Service ("IMMES"): IMMES aims to find 

risk and initial margin reducing ForexClear Contracts amongst participating 

FXCCMs. IMMES can be run on all Currency Pairs that are cleared through the 

ForexClear Service, although the primary focus will be on those Currency Pairs

that contribute to the largest Collateral requirement.

FXCCMs who wish to obtain further information about, or to participate in, 

IMMES should contact ForexClear Risk on 0207 426 7527. To be eligible to 

participate in IMMES, an FXXCM must enter into an IMMES agreement with 

the Clearing House (the "IMMES Agreement").

1.6 General Margining Process

A "Margin and Settlement Run" is the process by which the Clearing House 

calculates an FXCCM's initial margin requirement (if any) and, during an EOD Margin

and Settlement Run (i) in respect of each ForexClear CTM Contract, its variation 

margin requirement and PAI adjustment (if required) or (ii) in respect of each 

ForexClear STM Contract, its NPV Payment and PAA adjustment (if required)

(together the "Margin or Settlement Requirements"), and in the case of (i) only, 

applies that FXCCM's Collateral to satisfy the Margin Requirements for that FXCCM 

in respect of the ForexClear Contracts within that FXCCM's portfolio.

1.6.1 Types of Margin and Settlement Runs: There are three types of Margin and 

Settlement Run:

(a) ITD/Ad Hoc - Day Margin and Settlement Run

(i) ITD/Ad-hoc London daytime Margin and Settlement Runs are 

initiated as and when dictated by the schedule published by the 

Clearing House and notified to FXCCMs 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 and Settlement Run"). PPS times are published 

on the Clearing House's website at: http://www.lch.com/en/riskcollateral-management/collateral-management/protectedpayments-system/pps-concentration-activities.

(ii) ITD/Ad-hoc Margin Runs are calls in respect of the initial 

margin obligation only. The variation margin obligation, NPV 

Payment obligation, PAI and PAA are not included in ITD/Adhoc Margin Runs.

(b) EOD Margin and Settlement Run

(i) The EOD Margin and Settlement Run is the final ITD/Ad-hoc 

Day Margin and Settlement Run that completes by 24:00 local 
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London time on that business day (the "EOD Margin and 

Settlement Run").

(ii) EOD Margin and Settlement Runs are calls in respect of initial 

margin as well as (i) in the case of ForexClear CTM Contracts, 

variation margin obligations and PAI; and (ii) in the case of 

ForexClear STM Contracts, NPV Payment obligations and PAA.

(c) ITD / Ad Hoc - Night Margin Run

(i) 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").

(ii) ITD/Ad-hoc Night Margin Runs are calls in respect of the initial 

margin obligation only. The variation margin obligation, NPV 

Payment obligation, PAI and PAA are not included in ITD/Adhoc Night Margin Runs.

1.6.2 Margin and Settlement Run Process

(a) Margin and Settlement Runs cover all registered ForexClear Contracts 

with the status "NOVATED".

(b) Margin and Settlement Runs will be carried out for each ForexClear 

Contract and ForexClear Transaction (as the case maybe) until (and 

including) the later of:

(i) EOD Margin and Settlement Run on the Settlement Date; or

(ii) EOD Margin and Settlement Run after the Settlement Rate is 

published.

(c) During every Margin and Settlement Run the Clearing House calculates 

the Collateral required in respect of the initial margin obligations and (i) 

in the case of an FXCCM who is party to ForexClear CTM Contracts, 

the Collateral required in respect of the variation margin obligations and 

PAI required to cover that FXCCM's relevant open ForexClear CTM 

Contracts; or (ii) in the case of an FXCCM who is party to ForexClear 

STM Contracts, the NPV Payments and the PAA required in respect of 

that FXCCM’s relevant open ForexClear STM Contracts (each a

"Liability" and together the "Liabilities"). For these purposes, liabilities 

in respect of the open ForexClear Contracts and ForexClear 

Transactions registered in an FXCCM's Proprietary Account, each of the 

FXCCM's Client Accounts (other than Indirect Gross Accounts) and 

each Indirect Gross Sub-Account within an Indirect Gross Account of 

such FXCCM will be calculated separately.

(d) Each FXCCM's Liability:
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(i) in respect of the open ForexClear Contracts registered in an 

FXCCM's Proprietary Account, is offset against that FXCCM's 

non-cash collateral account (being a sub-account of the 

FXCCM's "H" collateral account) (for Collateral in respect of 

initial margin only) or funds in that FXCCM's "H" house cash 

account (being a sub-account of the FXCCM's "H" collateral

account) (for variation margin/PAI/initial margin); and

(ii) in respect of the open ForexClear Contracts registered in a 

particular FXCCM's Client Account, is offset against the 

relevant non-cash collateral account (being a sub-account of the 

FXCCM's Client Account) (for Collateral in respect of initial 

margin only) or funds in the relevant "C" client cash account 

(being a sub-account of the FXCCM's Client Account) (for 

variation margin/PAI/initial margin).

(e) FXCCMs are informed via email of their Liabilities as a percentage of 

their current total Collateral (such percentage being shown as a 

percentage of the aggregate Collateral in their cash and non-cash 

collateral account(s)) and are directed to the ForexClear Service portal 

(being a secure website made available to FXCCMs) (the "ForexClear 

Service Portal") which provides reports (at the times specified in 

Section 1.7.1 (Margin and NPV Payment Liability Reports)) informing 

FXCCMs of their (i) total Liabilities under the ForexClear Service; (ii) 

current total Collateral posted with the Clearing House for the 

ForexClear Service; and (iii) Liabilities as a percentage of their current 

total Collateral (such percentage being shown as a percentage of the 

aggregate Collateral in their cash and non-cash collateral account(s)).

(f) If following a Margin and Settlement Run an FXCCM is required to 

provide additional Collateral, this is also indicated by email and via the 

ForexClear Service Portal. In the case of ITD/Ad-hoc Margin and 

Settlement Runs, where an FXCCM's Liabilities exceed its available 

Collateral, then the Clearing House will issue a margin call for the 

amount of the shortfall plus 50% of the FXCCM's MER Buffer.

1.7 ForexClear Reporting

For purposes of reporting obligations to the CFTC, FXCCMs may only report details 

of ForexClear Contracts, including terminations and modifications to a 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 

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 Clearing Clients of the list of Approved LCH 

SDRs, and inform such Clearing Clients that the Clearing House is only able to report 

details of a ForexClear Contract to an Approved LCH SDR. 
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In accordance with CFTC Part 45 requirements (where the FXCCM has a reporting

obligation), FXCCMs 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.

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, thus an FXCCM will receive reports in respect of 

ForexClear and may also receive cross-service reports where it is a member of another 

service. Follow this link to the information available from the LCH website: 

https://www.lch.com/membership/

In respect of the ForexClear Service, on each business day the Clearing House will 

provide two sets of reports to FXCCMs: (1) Banking Reports; and (2) reports direct 

from the ForexClear Service (together "ForexClear Reporting"). These Procedures 

reference the ForexClear Service specific reports. Each day's report will remain 

available for download by FXCCMs from the 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 obligation) shall report to a trade repository or similar 

body the details of a ForexClear 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.

1.7.1 Margin and NPV Payment Liability Reports: Reports detailing Liabilities are 

provided to FXCCMs following every scheduled Margin and Settlement Run in 

accordance with Section 1.6.2 (Margin and Settlement Run Process) and where 

additional Collateral has been called by the Clearing House. Additionally, a 

report, including sensitivities, is provided at ForexClear Contracts level at 22.00 

local London time. If the EOD Margin and Settlement Run has not completed 

by 22:00 local London time on a particular business day, the report generated at 

EOD will reflect that certain Liabilities of FXCCMs are not discharged at the 

relevant time. A report will also be provided detailing an FXCCM's Collateral

utilisation level. If an FXCCM's Liabilities exceed its total available Collateral, 

ForexClear will alert the FXCCM.

1.7.2 Market Data Reports: Reports detailing Market Data are provided to FXCCMs 

following every scheduled Margin and Settlement Run. They include reports of 

Market Data and Settlement Rate used in the valuation of ForexClear Contracts 

and reports of Market Data shifts for each historic scenario used in the initial 

margin requirement calculations.

1.7.3 Trade Reports: Reports are provided that enable FXCCMs to monitor their 

firms' trading events and positions in respect of ForexClear. Reports on open 

ForexClear Contracts and on cancelled ForexClear Transactions and ForexClear 

Contracts are generated at EOD and reports on transferred ForexClear Contracts 

are made on an ad hoc basis.
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1.7.4 Trade Fixing and Settlement Reports: Reports are published on each business 

day detailing the ForexClear Contracts to which the Settlement Rate has been 

applied on that business day (the "FX Transaction Fixings" report), ForexClear 

Contracts that have been settled during that current business day (the 

"Settlements Today" report) and ForexClear Contracts that will settle the next 

business day (the "FX Transactions’ Fixed with Settlement Tomorrow" 

report).

1.7.5 Fees Reports: Reports on trading volumes on a daily and monthly basis are 

provided to FXCCMs. 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 FXCCMs choosing to have tariffs 

levied per transaction.

1.7.6 Banking Reports: Follow this link for a full list of banking reports.

3

1.7.7 Real-time Reporting: A near real-time view of member liabilities, collateral 

pledged, collateral and credit utilisation will be available from the ForexClear 

Service Portal (referred to in paragraph (e) of Section 1.6.2 (Margin and 

Settlement Run Process)).

1.7.8 Settlement Limit Reports: As further described in Section 1.19 (Settlement 

Limits for ForexClear Deliverable Contracts).

1.8 Treasury Operations & Collateral Management

1.8.1 Cover Distribution: The Clearing House nets each FXCCM's Liabilities (i.e. 

margins 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 

collateral distribution ("Collateral Distribution"). FXCCMs can choose 

whether cash or non-cash Collateral should be applied first. At the end of this 

process, if an FXCCM has a shortfall, a PPS (as defined in Section 1.8.2

(Protected Payment System) below) call for additional Collateral is made. 

Conversely, any excess cash remaining after the final overnight Margin and 

Settlement Run can, if requested before 09:30 local London time, be repaid to 

the FXCCM.

(a) Cover Distribution Notification

(i) FXCCMs are informed via email of their: Liabilities as a 

percentage of their current total Collateral (such percentage 

being shown as a percentage of the aggregate Collateral 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 1.7.1 (Margin and Settlement Liability 

Reports)) informing FXCCMs of their (i) total Liabilities under 

3 https://www.lch.com/membership
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the ForexClear Service; (ii) current total Collateral posted with 

the Clearing House for ForexClear; and (iii) Liabilities as a 

percentage of their current total Collateral (such percentage 

being shown as a percentage of the aggregate Collateral in their 

cash and non-cash collateral account(s)).

(ii) The reports accessed via the ForexClear Service Portal will 

enable FXCCMs to log in and examine the underlying data.

1.8.2 Protected Payment System: The Clearing House operates the Protected 

Payments System ("PPS") for transferring funds to and from its FXCCMs to 

cover their obligations to transfer Margin, NPV Payments, PAA and PAI. This 

is similar to a direct debit arrangement where the PPS bank confirms that any 

Clearing House-specified call is met.

FXCCMs are obliged to hold an account with a London PPS bank in USD, as 

well as a USD account with a PPS bank in the USA.

Follow the link below for a list of PPS banks operating in the UK and US:

https://www.lch.com/risk-collateral-management/sa-collateralmanagement/sa-acceptable-collateral/sa-acceptable-cash-0

1.8.3 Acceptable Forms of Collateral Cover: Follow the link below for a detailed

description of acceptable collateral and processes applicable from time to time:

https://www.lch.com/risk-collateral-management/ltd-collateralmanagement/ltd-acceptable-collateral

1.8.4 Interest and Accommodation: Interest is payable to or by FXCCMs on cash 

Collateral 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 utilisation 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 or follow the link below:

https://www.lch.com/risk-collateral-management/ltd-collateralmanagement/ltd-fees-collateral

1.9 Payment of Stamp Tax

Each FXCCM shall pay any Stamp Tax or duty levied or imposed upon it or in respect 

of its execution or performance of the Clearing Membership Agreement, the 

Regulations and the Procedures (including any registration of a ForexClear Contract) 

by a jurisdiction in which it is incorporated, organised, managed and controlled, or 

considered to have its seat, or in which a branch or office through which it is acting is 

located ("Stamp Tax Jurisdiction") or by any other jurisdiction and shall indemnify 

the Clearing House against any Stamp Tax or duty levied or imposed upon the Clearing 
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House or in respect of the Clearing House's execution or performance of the Clearing 

Membership Agreement, the Regulations and the Procedures (including any 

registration of a ForexClear Contract) by any such Stamp Tax Jurisdiction or by any 

other jurisdiction.

1.10 Default Management

1.10.1 Portfolio Splitting: As part of the ForexClear Default Management Process, 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 Default 

Management Group, seek to create:

(a) 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

(b) one or more individual Auction Portfolios which are more risk neutral.

1.10.2 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:

(a) cause the Clearing House to Applicable Law by virtue of its being a 

Recognised Clearing House or a Derivatives Clearing Organization;

(b) cause the Clearing House or its membership any reputational harm;

(c) cause legal action or proceedings to be taken against the Clearing House; 

or

(d) 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 

ForexClear 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 bid that was made by a ForexClear 

Clearing Member for operational, technological or other similar reasons and as 

a result of which a bid does not reach the Clearing House, the Clearing House 

will be unable to accept a bid and shall not be liable for any failure to accept 

such bid.

1.10.3 Affiliate Bidding: ForexClear Clearing Members are entitled to bid for an 

Auction Portfolio on behalf of an affiliated ForexClear Clearing Member. 

Where a ForexClear Clearing Member makes a bid and that ForexClear 

Clearing Member has an affiliated ForexClear Clearing Member that does not 

make a bid, the Clearing House shall not (unless instructed otherwise in 

accordance with the paragraph below) assume that the bidding ForexClear 
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Clearing Member has made the relevant bid on behalf of a non-bidding, 

affiliated ForexClear Clearing Member.

A ForexClear Clearing Member may notify the Clearing House, in advance of 

an Auction, that it wishes to bid on behalf of an affiliated ForexClear Clearing 

Member. Where it wishes to do so, the ForexClear Clearing Member should 

contact the Clearing House's Client Services Team (membership@lch.com; +44 

(0)207 426 7949).

1.10.4 ForexClear Contributions: ForexClear Contributions will be called via PPS on 

the fourth business day of each month or otherwise pursuant to a determination 

of a ForexClear Contribution under the Default Rules.

Excess ForexClear Contribution amounts due to ForexClear Clearing Members 

following a ForexClear Determination Date will (subject to the Default Rules) 

be repaid to ForexClear Clearing Members' PPS accounts on the fourth business 

day immediately following such ForexClear Determination Date.

If a Resignation Effective Date has occurred in respect of a Resigning Member 

and the ForexClear Service pursuant to Rule F3(e) of the ForexClear Default 

Fund Supplement, then the Clearing House will repay the ForexClear

Contribution that it holds for such Clearing Member (to the extent it has not 

been applied under the Default Rules) to the Clearing Member’s relevant PPS 

account on such Resignation Effective Date.

Interest on ForexClear Contributions will be paid to ForexClear Clearing 

Members' PPS accounts on the fifth business day of each month, in respect of 

the relevant "interest accrual period" occurring immediately prior to each such 

business day. Interest is calculated in respect of each "interest accrual period",

which commences on (and includes) the fourth business day of each month 

(each, a “ForexClear Reset Day”) and ends on (and includes) the calendar day 

immediately before the next ForexClear Reset Day. Notwithstanding the 

preceding paragraphs, if the rate of interest payable on ForexClear 

Contributions is negative, interest shall be payable by ForexClear Clearing 

Members to the Clearing House.

1.10.5 Quantifying ForexClear Contributions: For the purposes of calculating the 

ForexClear Margin Weight under Rule F2(d) of the ForexClear Default Fund 

Supplement, the uncovered stress loss of an FXCCM shall be determined by 

reference to the ForexClear Contracts entered into (1) on behalf of the relevant 

FXCCM and (2) with respect to the Clearing Clients and FCM Clients of such 

FXCCM.

1.10.6 Outsourcing: Pursuant to Section 1 (Clearing Member and Dealer Status) of 

the Procedures, an FXCCM may appoint a third party to fulfil one or both of the 

Clearing House's Membership requirements to: (i) participate in a ForexClear 

"fire drill" run by the Clearing House; and (ii) participate in the ForexClear 

Default Management Process operated by the Clearing House. Where an 

FXCCM chooses to outsource one or both of these functions it must appoint and 

maintain at least three LCH Approved Outsourcing Agents.
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The following entities are eligible for appointment as an LCH Approved 

Outsourcing Agent:

A ForexClear Clearing Member

any other entity that the Clearing House deems appropriate in its sole 

discretion.

Where an FXCCM wishes to appoint a third party to carry out any obligation 

on its behalf, it should contact the Clearing House's Membership Department 

with the:

(a) details of the third party entity that the FXCCM wishes to appoint as an 

LCH Approved Outsourcing Agent. Such information should include 

details of the applicant's regulatory status;

(b) evidence of the existence of a legally binding agreement between the 

FXCCM Clearing Member and the third party; and

(c) such other information that the Clearing House reasonably considers 

necessary for the purposes of determining whether an entity should be 

approved as an LCH Approved Outsourcing Agent.

Following the receipt of all of the information above, the Clearing House shall 

determine in its sole discretion, whether to approve the third party as an LCH 

Approved Outsourcing Agent. In making its determination, the Clearing House 

shall consider the third party's ability to demonstrate that it has the necessary 

operational infrastructure and appropriate asset class expertise.

Where an FXCCM successfully appoints an LCH Approved Outsourcing 

Agent, that FXCCM may be subject to increased margin requirements to cater 

for the additional time required to invoke an outsourcing process in the event of 

a default

FXCCMs should note that LCH Approved Outsourcing Agents may be subject 

to a more rigorous driving test and fire-drill than FXCCM (i.e. required to 

demonstrate an ability to price and bid a greater number of trades at tighter 

pricing tolerances and within more onerous timeframes). In addition, the 

Clearing House may require an FXCCM, that has appointed an LCH Approved 

Outsourcing Agent, to participate in an ad-hoc fire-drill or driving test with such 

notice as the Clearing House deems appropriate in its sole discretion.

The Clearing House reserves the right to revoke an entity's status as an LCH 

Approved Outsourcing Agent, in its sole discretion and without notice. In the

event of such a revocation, the relevant FXCCM shall be required to assume 

those responsibilities that were previously outsourced. Such revocation may 

occur where the Clearing House considers that there is an insufficient number 

of third party entities that are providing outsourced default management 

services (usually a minimum of five providers at any one time).
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Other than in exceptional circumstances and in the Clearing House's sole 

discretion, an LCH Approved Outsourcing Agent may not act on behalf of more 

than three clearing members.

The appointment of an LCH Approved Outsourcing Agent does not absolve an 

FXCCM of its obligations under the ForexClear DMP (including its obligation 

to participate in an Auction) and an LCH Approved Outsourcing Agent's 

participation in the ForexClear DMP on behalf of an FXCCM, in the event of a 

default, shall not extend beyond the provision of operational and other ancillary 

support to that FXCCM.

1.10.7 ForexClear DMG: The necessary involvement of FXCCMs and the ForexClear 

DMG in the ForexClear DMP entails the assessment and dissemination of 

information that could give rise to conflicts of interest. To ensure that such 

potential conflicts are demonstrably contained, Schedule 1 (Confidentiality, 

non-disclosure and participation in the ForexClear Default Management 

Group) establishes binding obligations of confidentiality, anonymity and the 

extent of dissemination of information on FXCCMs (and their executives or 

directors who participate from time to time in the ForexClear DMG) and on the 

Clearing House.

Each FXCCM who makes available a representative to serve on the ForexClear 

DMG agrees, and shall procure that, to the extent applicable, its representatives 

agree to be bound by and to ensure that it and any of its executives or directors 

serving on the ForexClear DMG complies with Schedule 1 (Confidentiality, 

non-disclosure and participation in the ForexClear Default Management 

Group) covering confidentiality, non-disclosure and other terms.

1.10.8 Default Management Accounts

(a) For the purposes of this Section 1.10.8, the following definitions will 

apply: 

“Affected Non-Porting Client Account” means, in respect of an Initial 

DMA or a Final DMA (as applicable) and the ForexClear Contracts that 

(at any time) comprise such Initial DMA or Final DMA (as applicable), 

each Non-Porting Client Account from which any such ForexClear 

Contract originated.

“Auction” has the meaning assigned to it in the ForexClear DMP 

Annex. 

“Auction Date” means, in respect of an Auction Portfolio, the business 

day on which such Auction Portfolio is sold. 

“Auction Result” means, in respect of an Auction Portfolio, the amount 

equal to: 

(i) the gains or losses of the Clearing House arising from the sale of 

such Auction Portfolio, where a gain is a positive amount and a 

loss is a negative amount; 
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(ii) plus the Auction Portfolio NPV Gain for such Auction Portfolio 

(if any); 

(iii) minus the Auction Portfolio NPV Loss for such Auction 

Portfolio (if any). 

“Auction Portfolio” means a ForexClear Auction Portfolio. 

“Auction Portfolio Calculation Period” means, in respect of an 

Auction Portfolio and its Auction Date, the period commencing 

immediately after the Daily Calculation Period for the business day 

preceding such Auction Date and ending at the point at which such 

Auction Portfolio is sold. 

“Auction Portfolio NPV Change” means, in respect of an Auction 

Portfolio and its Auction Portfolio Calculation Period, the amount (if 

any) by which the aggregate net present value of the ForexClear 

Contracts within such Auction Portfolio has changed during such 

Auction Portfolio Calculation Period, and 

(iv) where such change is in favour of the Defaulter, is the “Auction 

Portfolio NPV Gain”; and 

(v) where such change is in favour of the Clearing House, is the 

“Auction Portfolio NPV Loss”. 

“Daily Amount” means, in respect of a DMA and a Daily Calculation 

Period, the Daily Gain or Daily Loss for such DMA and Daily 

Calculation Period. 

“Daily Calculation Period” means, in respect of a business day, the 

period, in respect of which the Clearing House determines the end of 

day margin and settlement payments for ForexClear Contracts for such 

business day. 

“Daily Gain” means, in respect of a DMA and a Daily Calculation 

Period, the amount (if any) by which the Daily NPV Gain exceeds the 

Daily Hedge Costs (in each case) for such DMA and Daily Calculation 

Period. 

“Daily Hedge Costs” means, in respect of a DMA and a Daily 

Calculation Period, all costs incurred by the Clearing House in 

connection with hedging the exposure of one or more ForexClear 

Contracts within such DMA in accordance with the Risk Neutralisation 

process under Rule 2.2 of the ForexClear DMP Annex. 

“Daily Loss” means, in respect of a DMA and a Daily Calculation 

Period, either: (i) where the DMA experiences a Daily NPV Loss in 

respect of such Daily Calculation Period, the aggregate of such Daily 

NPV Loss and the Daily Hedge Costs for such DMA and Daily 

Calculation Period; or (ii) where the DMA experiences a Daily NPV 

Gain in respect of such Daily Calculation Period, the amount by which 
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the Daily Hedge Costs for such DMA and Daily Calculation Period 

exceed such Daily NPV Gain. 

“Daily NPV Change” means, in respect of a DMA and a Daily 

Calculation Period, the amount (if any) by which the aggregate net 

present value of the Remaining Contracts within such DMA has changed 

during such Daily Calculation Period, and: 

(vi) where such change is in favour of the Defaulter, is the “Daily 

NPV Gain”; and 

(vii) where such change is in favour of the Clearing House, is the 

“Daily NPV Loss”. 

“DMA” means an Initial DMA or a Merged DMA, as applicable. 

“DMA Creation Date” means, in respect of an Initial DMA, the 

business day on which such Initial DMA is established by the Clearing 

House. 

“DMA Merger Date” means, in respect of a Merged DMA, the business 

day on which two or more DMAs are combined to form such Merged 

DMA. 

“Final DMA” means, in respect of an Auction Portfolio that is auctioned 

and sold, the most recently established DMA from which such Auction 

Portfolio was formed. 

“ForexClear Auction Portfolio” means an “Auction Portfolio” as 

defined in the ForexClear DMP Annex. 

“Initial DMA” means a default management account established by the 

Clearing House, acting in its sole discretion, to which one or more Sets 

of Non-Porting Contracts are transferred (by book-entry) on the DMA 

Creation Date for such default management account.

“Latest DMA” means, in respect of a Daily Calculation Period, a DMA 

that exists at the end of such Daily Calculation Period, but which has not 

itself been combined with another DMA to form a separate Merged 

DMA. 

“Merged DMA” means a default management account established by 

the Clearing House, acting in its sole discretion, which results from the 

combination of two or more DMAs. 

“Non-Porting Client Account” means, in respect of a Defaulter, the 

Individual Segregated Account, Indirect Gross Account, or Omnibus 

Segregated Account or FCM Client Sub-Account (as applicable) of such 

Defaulter, to which the ForexClear Contracts that the Clearing House 

has determined will not be ported in accordance with the Client Clearing 

Annex or the FCM Rulebook are, or were, registered at the point of the 

Default of the Defaulter. 
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“Pre-Default TMR” means, in respect of an Affected Non-Porting 

Client Account of a Defaulter, the TMR for such Affected Non-Porting 

Client Account as at the end of day margin and settlement call for the 

business day before the day of Default of such Defaulter.

“Pre-Default TMR Ratio” means

(viii) in respect of an Initial DMA and an Affected Non-Porting Client 

Account referable to it, the ratio that the Pre-Default TMR of 

such Affected Non-Porting Client Account bears to the 

aggregate Pre-Default TMR of all Affected Non-Porting Client 

Accounts referable to such Initial DMA; or 

(ix) in respect of a Final DMA and an Affected Non-Porting Client 

Account referable to it, the ratio that the Pre-Default TMR of 

such Affected Non-Porting Client Account bears to the 

aggregate Pre-Default TMR of all Affected Non-Porting Client 

Accounts referable to such Final DMA. 

“Pre-Merger TMR” means, in respect of a DMA that was combined 

with one or more other DMA(s) to form a Merged DMA, the TMR for 

such DMA as at the end of day margin and settlement call for the 

business day before the DMA Merger Date of such Merged DMA. 

“Pre-Merger TMR Ratio” means, in respect of a DMA that was 

combined with one or more other DMA(s) to form a Merged DMA, the 

ratio that such DMA’s Pre-Merger TMR bears to the aggregate PreMerger TMR of all DMAs that were combined to form such Merged 

DMA.

“Prior Merged DMA” means, in respect of a Merged DMA, an existing 

Merged DMA that has been combined with one or more other DMA(s) 

to form such Merged DMA. 

“Remaining Contracts” means, in respect of a DMA and a Daily 

Calculation Period, all of the ForexClear Contracts within such DMA 

during such Daily Calculation Period, excluding those ForexClear 

Contracts that the Clearing House has auctioned and sold at any point 

within such Daily Calculation Period. 

“Set of Non-Porting Contracts” means, in respect of a Non-Porting 

Client Account, the ForexClear Contracts that are transferred by the 

Clearing House from such Non-Porting Client Account to an Initial 

DMA. 

“TMR” means (i) in respect of an Affected Non-Porting Client Account, 

the total margin requirement as determined by the Clearing House for 

such Affected Non-Porting Client Account, or (ii) in respect of a DMA, 

the total margin requirement as determined by the Clearing House for 

such DMA, in each case, excluding variation margin.
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(b) Initial DMAs 

(i) After a Default, the Clearing House may, in its sole discretion: 

(A) determine that the ForexClear Contracts registered to a 

Non-Porting Client Account will not port in accordance 

with the Client Clearing Annex or the FCM Rulebook (as 

applicable); and 

(B) transfer the resulting Set of Non-Porting Contracts in 

respect of such Non-Porting Client Account to an Initial 

DMA on the business day on which the Clearing House 

makes such determination. 

(ii) The Clearing House may in its sole discretion create more than 

one Initial DMA for the purposes of subparagraph (i)(B) above

on the same business day. 

(iii) No Contracts other than ForexClear Contracts will be transferred 

into an Initial DMA. 

(iv) Any outstanding and owing, but unsettled, variation margin or 

settlement amounts in respect of ForexClear Contracts as at the 

end of the Daily Calculation Period for the business day prior to 

the transfer of such ForexClear Contracts in accordance with 

subparagraph (i) above shall be discharged by the Clearing 

House debiting or crediting (as applicable) the Non-Porting 

Client Account from which such ForexClear Contracts were 

transferred. 

(c) Merged DMAs

(i) On any business day following the creation of two or more Initial 

DMAs pursuant to paragraph (b) above, the Clearing House may 

create a Merged DMA by combining: 

(A) multiple Initial DMAs; 

(B) one or more Initial DMAs and one or more Prior Merged 

DMAs; or 

(C) multiple Prior Merged DMAs. 

(ii) The Clearing House may in its sole discretion create more than 

one Merged DMA on the same business day. 

(d) Auctions 

(i) The Clearing House shall conduct Auctions in respect of Auction 

Portfolios referable to DMAs in accordance with the provisions 

of the ForexClear DMP Annex. 
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(ii) More than one Auction Portfolio may be referable to a single 

DMA, in which case: 

(A) the Clearing House will conduct one or more Auctions of 

each Auction Portfolio referable to such DMA; and 

(B) on and from the date of the first Auction in respect of the 

DMA, the Clearing House may no longer combine such 

DMA into a Merged DMA. 

(iii) Following the sale of an Auction Portfolio, the ForexClear 

Contacts within such Auction Portfolio shall no longer form part 

of the DMA from which the Auction Portfolio was created. 

(e) Attribution of Daily Amounts 

(i) The Clearing House shall, following each Daily Calculation 

Period, determine the Daily Amount for each Latest DMA in 

respect of such Daily Calculation Period. 

(ii) The Clearing House shall attribute the Daily Amount of a Latest 

DMA that is: 

(A) an Initial DMA, to each Affected Non-Porting Client 

Account referable to such Initial DMA, pro rata 

according to the Pre-Default TMR Ratio of each such 

Affected Non-Porting Client Account; and 

(B) a Merged DMA, to each DMA that was combined to 

form such Merged DMA, pro rata according to the PreMerger TMR Ratio of each such DMA (where the 

amount attributed to each such DMA is an “Interim 

Amount”). 

(iii) If the Clearing House attributes an Interim Amount to a DMA 

under subparagraph (ii)(B) above, then it will further attribute 

such Interim Amount as follows: 

(A) Where the DMA to which the Interim Amount was 

attributed is an Initial DMA, the Clearing House will 

further attribute such amount to each Affected NonPorting Client Account referable to such Initial DMA, 

pro rata according to the Pre-Default TMR Ratio of each 

such Affected Non-Porting Client Account; and 

(B) Where the DMA to which the Interim Amount was 

attributed is a Merged DMA, the Clearing House will 

further attribute such amount to each DMA that was 

combined to form such Merged DMA, pro rata according 

to the Pre-Merger TMR Ratio of each such DMA. 
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(iv) If the Clearing House attributes an amount to a DMA under 

subparagraph (iii)(B) above, then it will further attribute such 

amount according to the method specified in subparagraph (iii) 

(treating such amount as an Interim Amount for the purposes of 

subparagraph (iii)) until all amounts are attributed to NonPorting Client Accounts. 

(f) 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 Client 

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 Client Account. 

(g) Collateral 

The Clearing House shall hold the relevant Collateral in respect of each 

Non-Porting Client Account in its applicable Client Account until the 

process described in this Section 1.10.8 has been completed.

1.11 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 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 Rules of the Clearing House or any 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 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.

1.12 ForexClear Client Clearing

1.12.1 ForexClear Clearing Client Clearing – Ancillary Documentation

(a) Security Deed: Unless specified otherwise by the Clearing House, a 

ForexClear Clearing Member must enter into a Security Deed in respect 

of its Clearing Clients in relation to amounts due to it from the Clearing 

House pursuant to the Client Clearing Annex. Further information in 

relation to such Security Deed is prescribed by the Clearing House from 

time to time and published on the Clearing House's website.
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(b) Prescribed Language and End-User Notice: Pursuant to the Clearing 

House's General Regulations, each ForexClear Clearing Member is 

required to ensure that it includes certain language in its agreement with 

its ForexClear Clearing Client (the "Clearing House Prescribed 

Language"). The Clearing House Prescribed Language is shown at 

Schedule 1 of the Procedure .

ForexClear Clearing Clients' attention is drawn to the End-User Notice 

which is published on the Clearing House's website:

http://www.lch.com/about-us/governance/end-user-notices

1.12.2 Transactions in Respect of ForexClear Clearing Client Default to FXCCM

(a) This Section describes certain transactions that, under certain conditions, 

can be carried out by an FXCCM in respect of one of its ForexClear 

Clearing Clients that has defaulted in its obligations to the FXCCM.

(b) A request or instruction from an FXCCM to the Clearing House to carry 

out a transaction described in Sections 1.12.3 (Transfers between Client 

Accounts and Proprietary Accounts) or 1.12.4 (ForexClear Contracts 

Entered into, or Cancelled, on behalf of Defaulted Clients) below shall 

in every case be deemed a representation by the FXCCM to the Clearing 

House that (i) the affected ForexClear Clearing Client is in default of its 

obligations to the FXCCM, (ii) the FXCCM has provided and will 

provide (as applicable) any required notices to the ForexClear Clearing 

Client of its default and the FXCCM's transactions effected under 

Sections 1.12.3 (Transfers between Client Accounts and Proprietary 

Accounts) and/or 1.12.4 (ForexClear Contracts Entered into, or 

Cancelled, on behalf of Defaulted Clients) below, and (iii) the FXCCM 

is permitted by its agreements with the ForexClear Clearing Client and 

Applicable Law, and has authority to effect the transactions specified in 

the FXCCM's requests and/or instructions to the Clearing House in 

respect of such ForexClear Clearing Client. FXCCMs are not permitted 

to effect or attempt to effect a transaction described in Sections 1.12.3

(Transfers between Client Accounts and Proprietary Accounts) or 1.12.4

(ForexClear Contracts Entered into, or Cancelled, on behalf of 

Defaulted Clients) below where the preceding representations are not 

satisfied.

(c) In any other circumstance not covered by Section 1.12.3 (Transfers 

between Client Accounts and Proprietary Accounts), Section 1.12.4

(ForexClear Contracts Entered into, or Cancelled, on Behalf of 

Defaulted Clients) or Section 1.14 (Indirect Clearing), an FXCCM may 

only instruct the Clearing House to transfer a ForexClear Contract from 

its Client Account to its Proprietary Account in circumstances where the 

Clearing House has received from the FXCCM:

(i) evidence of the relevant ForexClear Clearing Client's consent to 

such transfer in a form suitable to the Clearing House; and
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(ii) an indemnity in a form suitable to the Clearing House.

The Clearing House will usually arrange a transfer of any ForexClear 

Contracts to be transferred pursuant to this paragraph (c) within 24 hours 

of receipt (to the extent applicable) of the documents listed in subparagraphs (i) and (ii) above, unless such transfer is contested by the 

relevant ForexClear Clearing Client.

1.12.3 Transfers between Client Accounts and Proprietary Accounts

(a) If at any time an early termination date (howsoever described) occurs in 

respect of one or more of the transactions between an FXCCM and a 

ForexClear Clearing Client in respect of which such FXCCM is a party

to Related ForexClear Contracts and, at the time of such early 

termination date, the relevant FXCCM is not a Defaulter, the FXCCM 

may, in connection with a defaulted ForexClear Clearing Client, transfer 

a ForexClear Contract from the applicable Client Account to its 

Proprietary Account, provided that the following conditions are met (in 

addition to any other generally applicable provisions of the Rulebook):

(i) the representations described above in paragraph (b) of Section 

1.12.2 (Transactions in Respect of ForexClear Clearing Client 

Default to FXCCM) are not or would not be breached;

(ii) satisfactory evidence of the ForexClear Clearing Client's default 

in its obligations to the FXCCM is presented to the Clearing 

House, which evidence may be, to the extent permitted by the 

Clearing House in its sole discretion, nothing other than the 

FXCCM's instruction to effect the transfer (provided that the 

Clearing House shall be entitled to request additional evidence 

in its discretion);

(iii) a copy of a notice served by the FXCCM on the ForexClear 

Clearing Client alerting that ForexClear Clearing Client of the 

FXCCM's intention to transfer the relevant ForexClear Contract 

to the Clearing House;

(iv) at all times the FXCCM maintains sufficient Collateral in its 

Proprietary Account and the applicable Client Account; and

(v) on demand from the Clearing House, an indemnity from the 

FXCCM in a form suitable to the Clearing House is provided to 

the Clearing House.

For the purposes of this Section 1.12.3 a "Related ForexClear

Contract" means, in respect of a transaction between an FXCCM and a 

ForexClear Clearing Client which has been terminated on an early 

termination date, the open position represented by the ForexClear 

Contract entered into with the Clearing House by such FXCCM on 

behalf of the relevant ForexClear Clearing Client on equal and opposite 

terms to such transaction.
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(b) The Clearing House will typically (but shall not be required to) transfer 

the relevant ForexClear Contract within 24 hours of receipt of the above.

1.12.4 ForexClear Contracts Entered into, or Cancelled, on Behalf of Defaulted 

Clients

(a) An FXCCM may register, in the name of a defaulted ForexClear 

Clearing Client but without the direction of such ForexClear Clearing 

Client, ForexClear Contracts (including hedging and/or compression 

transactions) to such Client Account, or cancel ForexClear Contracts 

without the direction of such ForexClear Clearing Client under the 

following conditions (in addition to any other generally applicable 

provisions of the Rulebook):

(i) the representations described above in paragraph 1.12.2(b)

(Transactions in respect of ForexClear Clearing Client Default 

to FXCCM) are not or would not be breached;

(ii) satisfactory evidence of the ForexClear Clearing Client's default 

in its obligations to the FXCCM is presented to the Clearing 

House, which evidence may be, to the extent permitted by the 

Clearing House in its sole discretion, nothing other than the 

FXCCM's instruction to effect the transfer (provided that the 

Clearing House shall be entitled to request additional evidence 

in its discretion);

(iii) at all times the FXCCM maintains sufficient Collateral in the 

applicable Client Account;

(iv) a copy of a notice served by the FXCCM on the ForexClear 

Clearing Client alerting that ForexClear Clearing Client of the 

FXCCM's intention to register the relevant ForexClear 

Contract(s) is provided to the Clearing House; and

(v) on demand from the Clearing House, an indemnity from the 

FXCCM in a form suitable to the Clearing House is provided to 

the Clearing House.

(b) Such a ForexClear Contract submitted for registration in the name of a 

defaulted ForexClear Clearing Client must reference the applicable 

ForexClear Clearing Client and Client Account as would ordinarily 

occur; however, the transaction may be submitted using either the 

ForexClear Clearing Client's ForexClear Approved Trade Source 

System identification number or an alternative ForexClear Approved 

Trade Source System identification number other than that of the 

ForexClear Clearing Client (e.g., the FXCCM's ForexClear Approved 

Trade Source System identification numbers), as applicable.

1.12.5 Backup Clearing Members: 
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A ForexClear Clearing Client may, at any time, appoint one or more Backup 

Clearing Member(s) in respect of the ForexClear Service, for the purpose of 

porting ForexClear Contracts entered into by a FXCCM on its behalf and 

corresponding Account Balance(s), in accordance with the Client Clearing 

Annex. 

A FXCCM agrees that the Clearing House is permitted, after the Default of such 

FXCCM, to disclose the Portfolio in respect of a Relevant Client Account and 

ForexClear Clearing Client of such FXCCM, to each Backup Clearing Member 

appointed by such ForexClear Clearing Client in respect of the ForexClear 

Service.

For the purposes of this Section 1.12.5:

(a) “Portfolio” means, in respect of a Relevant Client Account and a 

ForexClear Clearing Client (i) the Contract(s) recorded to the Relevant 

Client Account and entered into between the Defaulting FXCCM and 

the Clearing House, in respect of such ForexClear Clearing Client, (ii) 

the Account Balance(s) recorded to the Relevant Client Account and 

attributable to such ForexClear Clearing Client, and (iii) such other 

related information as determined by the Clearing House in its sole 

discretion; and 

(b) “Relevant Client Account” means, in respect of a Defaulting FXCCM 

and a ForexClear Clearing Client, a Client Account (i) in the ForexClear 

Service and in the name of such Defaulting FXCCM, and (ii) attributable 

to such ForexClear Clearing Client (and, as applicable, one or more 

other ForexClear Clearing Client(s)).

1.13 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 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 Rules of the Clearing House or any 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 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.

1.14 Indirect Clearing

1.14.1 In circumstances where an early termination date (howsoever described) occurs 

in respect of all of the transactions between a ForexClear Clearing Member and 
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a ForexClear Clearing Client acting on behalf of Indirect Clearing Clients 

comprising an Indirect Gross Account in respect of which such ForexClear

Clearing Member (i) is a party to Related ForexClear Contracts and (ii) at the 

time of such early termination date, is not a Defaulter, that ForexClear Clearing 

Member may instruct the Clearing House to take one of the following steps in 

respect of each Indirect Clearing Client comprising the Indirect Gross Account:

(a) in circumstances where the ForexClear Clearing Member notifies the 

Clearing House of a Backup Client in respect of the relevant Indirect 

Clearing Client, transfer all of the open Related ForexClear Contracts 

registered to the Indirect Gross Sub-Account referable to the Indirect

Clearing Client to the relevant Indirect Gross Sub-Account referable to

the Indirect Clearing Client of the new or existing Indirect Gross

Account which the ForexClear Clearing Member(a) has opened in

respect of such Backup Client (a "Client to Client Porting");

(b) transfer all of the open Related ForexClear Contracts registered to the 

relevant Indirect Gross Sub-Account referable to the Indirect Clearing 

Client to:

(c) a new Individual Segregated Account opened within the Clearing House 

by the ForexClear Clearing Member directly on behalf of such Indirect 

Clearing Client who shall, after such transfer, become a ForexClear

Clearing Client in respect of such Client Account; or

(i) a new or existing Omnibus Segregated Account opened within 

the Clearing House by the ForexClear Clearing Member where 

such Indirect Clearing Client shall, after such transfer, become a 

ForexClear Clearing Client in respect of such Omnibus 

Segregated Account,

(d) (each, a "Direct Account Opening"); or

(e) transfer all of the open Related ForexClear Contracts registered to the 

relevant Indirect Gross Sub-Account referable to the Indirect Clearing 

Client to its Proprietary Account (an "Initial Transfer").

The Clearing House will determine, in respect of each Indirect Clearing Client 

comprising the Indirect Gross Account, whether a Client to Client Porting, a 

Direct Account Opening or an Initial Transfer (as applicable) is possible within 

the period of time considered by the Clearing House (in its sole discretion) to 

be appropriate in the relevant circumstances. In the event of a determination by 

the Clearing House that the relevant step is impossible within such time period

(an "Impossibility Determination"), the Clearing House will notify the 

ForexClear Clearing Member and will not undertake a Client to Client Porting, 

a Direct Account Opening or an Initial Transfer in respect of the relevant 

Indirect Clearing Client.

1.14.2 Each of the steps referred to in paragraphs 1.14.1 (a), (c)(i) and (e) above will 

be subject to the following:
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(a) the Clearing House receiving a copy of the notice from the ForexClear

Clearing Member to the relevant ForexClear Clearing Client or from the 

relevant ForexClear Clearing Client to the ForexClear Clearing 

Member, copied to each Indirect Clearing Client comprising the Indirect 

Gross Account, designating the relevant early termination date or, if 

such early termination date has occurred automatically, evidence of the 

relevant event of default or termination event;

(b) the Clearing House receiving a copy of the notice from the ForexClear

Clearing Member to the relevant ForexClear Clearing Client and the 

relevant Indirect Clearing Client confirming that the ForexClear

Clearing Member will, in accordance with the instructions of the 

Indirect Clearing Client, request the Clearing House to arrange a Client 

to Client Porting, a Direct Account Opening or an Initial Transfer (as 

applicable) in respect of the Related ForexClear Contracts referable to 

such Indirect Clearing Client;

(c) the ForexClear Clearing Member having satisfied the Total Required 

Margin Amount in respect of the relevant account to which the Related 

ForexClear Contracts are being transferred;

(d) the Clearing House receiving an indemnity from the ForexClear

Clearing Member in a form suitable to the Clearing House; and

(e) in respect of a Client to Client Porting, the Clearing House receiving 

written confirmation from the ForexClear Clearing Member that the 

Backup Client has agreed to act as the Backup Client in relation to such 

Client to Client Porting.

The Clearing House will usually arrange a transfer of the Related ForexClear

Contracts referable to an Indirect Clearing Client within 24 hours of receipt of 

the documents listed in (a)(c)(i)(d) Section 1.14.21.14.2 (a) to (e).

For the purposes of this Section 1.14, a "Related ForexClear Contract" has the 

same meaning as ascribed to such term in Section 1.12.3 save that, in this 

Section 1.14 the ForexClear Clearing Client is acting on behalf of one or more

Indirect Clearing Clients in respect of whom the ForexClear Clearing Member 

clears Contracts with the Clearing House in an Indirect Gross Account.

1.15 Compression

1.15.1 Subject to Clearing House availability, a ForexClear Clearing Member may 

compress Eligible ForexClear Compression Contracts in accordance with 

Regulation 95 and this Section 1.15. There are two options available to a 

ForexClear Clearing Member that wishes to compress Eligible ForexClear 

Compression Contracts:

(a) a ForexClear Clearing Member can request that all such Eligible 

ForexClear Compression Contracts entered into (i) on behalf of a 

designated ForexClear Clearing Client and in respect of a particular 

Client Account (or, where relevant, in respect of an Indirect Gross 
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Sub-Account), or (ii) on such ForexClear 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 ForexClear Clearing Member 

after the applicable scheduled compression run) until the ForexClear 

Clearing Member notifies the Clearing House to discontinue the

compression of its Eligible ForexClear Compression Contracts. 

ForexClear Clearing Members should contact the Clearing House’s 

Membership Department to request such a compression of Eligible 

ForexClear Compression Contracts; or

(b) a ForexClear Clearing Member may notify the Clearing House 

through the ClearLink API specifying the Eligible ForexClear 

Compression Contracts it wishes to be compressed. The ForexClear 

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.

1.15.2 In order to compress such an Eligible ForexClear Compression Contract, a 

ForexClear Clearing Member must follow the process for compression as set out 

above and must, at the time of compression, have in its applicable Client Account 

or Proprietary Account ForexClear Contracts with the same compression 

identifier (being an identifier applied by the Clearing House which indicates that 

such ForexClear Contracts are eligible for compression).

1.15.3 In respect of each compression run, the Clearing House will notify ForexClear 

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

must notify the Clearing House of the Eligible ForexClear Compression 

Contracts to be compressed in order for such Eligible ForexClear Compression 

Contracts to be included in the relevant compression run. The Clearing House 

shall process the compression of all Eligible ForexClear Compression Contracts

notified to it prior to such cut-off time and shall notify the applicable ForexClear 

Clearing Member after the relevant 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.

1.15.4 Following the compression process described above and as further set out in 

Regulation 95, the applicable ForexClear 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 ForexClear Contracts as notified to the 

ForexClear Clearing Member by the Clearing House.

1.16 Exercise and Expiry Agent

1.16.1 ForexClear Clearing Members may facilitate or communicate the exercise of 

(or intent to exercise) ForexClear Option Contracts to the Clearing House via 

an exercise and expiry agent. The Clearing House may determine, in its sole 

discretion, the form and manner of any instruction pursuant to this Section 1.16.
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1.16.2 In the event that an exercise and expiry agent is not able to facilitate or

communicate the exercise of (or intent to exercise) a ForexClear Option 

Contract for any reason whatsoever, and the Clearing House becomes aware of 

such failure to facilitate or communicate, the Clearing House will notify the 

relevant ForexClear Clearing Members of such failure and may provide details 

of one or more alternative exercise methods.

1.16.3 Exercise and expiry agents may be designated by the Clearing House from time 

to time and such agents shall be published on the Clearing House’s website.

1.16.4 Neither the Clearing House nor any other member of the LCH Group shall have 

any liability whatsoever to any ForexClear Clearing Member or any other 

person, including any Clearing Client, in contract, tort (including negligence), 

trust, as a fiduciary or under any other cause of action in respect of any 

liabilities, damages, losses, costs or expenses of whatsoever nature suffered or 

incurred by a ForexClear Clearing Member or any other person, including any 

Clearing Client, as a result of (a) any failure by the Clearing House to provide 

notice pursuant to Section 1.16.2 or (b) any failure of an exercise and expiry 

agent to communicate the exercise of (or intent to exercise) a ForexClear Option 

Contract to the Clearing House. 

1.17 Automatic Exercise of ForexClear Contracts

1.17.1 Subject to Section 1.17.5, if, at the Expiration Time on the Expiration Date, the 

In-the-Money Amount of a ForexClear NDO Contract or ForexClear Option 

Contract at 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 ForexClear NDO Contract or ForexClear Option Contract, as the 

case may be; 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 ForexClear Contract, such ForexClear NDO 

Contract or ForexClear Option Contract shall be deemed exercised as of such 

time, provided that, in the case of a ForexClear Option Contract, such 

ForexClear Option Contract had not been exercised by the relevant ForexClear 

Clearing Member or the Clearing House.

1.17.2 For the purposes of Section 1.17.1, 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 FXCCMs (or such shorter notice period 

as determined by the Clearing House following consultation with the affected 

FXCCMs).

1.17.3 Subject to Section 1.17.5, the Clearing House receives an instruction from a 

ForexClear Clearing Member, including via any third party intent agent or 

middleware provider, before the applicable Expiration Time on the Expiration 

Date such instruction will in all circumstances be acted upon notwithstanding 
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any administrative, systems or processing delays that may affect the Clearing

House immediately taking the action required upon receipt of such instruction.

If the Clearing House receives an instruction from a ForexClear Option Clearing 

Member at or after the applicable Expiration Time on the Expiration Date then 

Section 1.17.1 shall in all circumstances apply and the Clearing House shall 

have no regard to such instruction.

1.17.4 The "In-the-Money Amount" in relation to a ForexClear NDO Contract or 

ForexClear Option Contract shall, in respect of the Exercise Date, be equal to:

(a) 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

(b) 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.

1.17.5 In order to facilitate the expiry of offsetting ForexClear Option Contracts, the 

Clearing House will automatically expire ForexClear Option Contracts that are 

“equal and offsetting”. ForexClear Clearing Members may opt out of such 

automatic expiry of their ForexClear Option Contracts by providing notice to 

the Clearing House (the form and manner of such notice shall be prescribed by 

the Clearing House from time to time), and such opt out shall become effective 

at such time as notified by the Clearing House to the given ForexClear Clearing

Member.

1.17.6 Two ForexClear Option Contracts shall be deemed “equal and offsetting” to

each other where:

(a) the Buyer of one ForexClear Option Contract and the Seller of the other

ForexClear Option Contract is the same ForexClear Option Clearing

Member; and

(b) the ForexClear Option Contracts have the equivalent or equal (1) Call

Currency and Put Currency, (2) Call Currency Amount and Put

Currency Amount, (3) Strike Price, (4) Expiration Date and (5)

Settlement Date.

1.17.7 Except where a ForexClear Clearing Member has opted out of the automatic 

expiry of their ForexClear Option Contracts in accordance with Section 1.17.5, 

at the start of a given Expiration Date, the Clearing House shall automatically 

expire and therefore terminate all equal and offsetting pairs of ForexClear

Option Contracts of each ForexClear Option Clearing Member.

1.17.8 In the event the Clearing House receives an instruction from a ForexClear 

Option Clearing Member, including via any third party exercise and expiry 

agent or middleware provider, with respect to any ForexClear Option Contract 

that is subject to automatic expiry on a given Expiration Date, the Clearing
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House shall disregard such instruction and in all circumstances such ForexClear

Option Contract shall be expired on the given Expiration Date.

1.17.9 Capitalised terms used in this Section 1.17 and not otherwise defined shall have 

the meanings specified for such terms in (i) the ForexClear Option Contract 

Terms applicable to that ForexClear Option Contract, and, if note 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.

1.18 CLS Payment Procedures

1.18.1 In connection with ForexClear Deliverable Contracts, where applicable, 

FXCCMs are required to meet the following requirements with respect to CLS:

Time Action or Requirement

00:00 CET Clearing House to provide FXCCMs 

expected CLS funding requirements.

01:30 – 02:00 CET Clearing House to provide FXCCMs 

final CLS funding requirements. 

FXCCMs required to make such 

payments by 09:00 CET (the “Daily 

CLS Cut-Off Time).

06:00 – 09:00 CET FXCCMs required to make payments 

to cover all short positions in all 

currencies.

08:00 CET CLS to issue payments to FXCCMs

per settlement instructions for each

relevant FXCCM.

09:00 – 10:00 CET Clearing House to initiate and

complete liquidity provisions.

1.18.1 In connection with ForexClear Deliverable Contracts, where applicable, the 

following Relevant FX Liabilities are payable to CLS by FXCCMs in 

accordance with instructions from the Clearing House:

(a) Initial Exchange Amounts, Final Exchange Amounts and amounts owed 

under the Economic Terms of ForexClear Spot Contracts and 

ForexClear Deliverable Forward Contracts; and

(b) Premiums under ForexClear Option Contracts,

in each case net of any return of aggregate variation margin or NPV Payments 

denominated in the same currency and due on the same day.

1.18.2 Each relevant ForexClear Clearing Member warrants that the Relevant FX 

Liabilities that are paid to CLS pursuant to Section 1.18.2 are transferred free 

from any proprietary, equitable or other similar interest of any person.
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1.18.3 Each relevant ForexClear Clearing Member shall at all times maintain complete

and accurate written records of all Payment Transfer Orders given by it (or on

its behalf) to its Member Settlement Bank(s) in respect of all amounts under all 

of the ForexClear Contracts (other than ForexClear Non-Deliverable Contracts)

registered in its name from time to time. Upon demand by the Clearing House,

a ForexClear Clearing Member shall immediately provide all such records to 

the Clearing House.

1.19 Settlement Limits for ForexClear Clearing Members 

1.19.1 Subject to the Regulations and Section 1.19.2, the Clearing House shall from 

time to time determine the (i) Settlement Position Limit and (ii) Settlement 

Exposure Limit in respect of each ForexClear Currency and each relevant 

ForexClear Clearing Member.

1.19.2 A ForexClear Clearing Member may request, in such form and manner as the 

Clearing House prescribes from time to time, that the Clearing House set a 

Settlement Position Limit for a given ForexClear Currency below the limit 

determined pursuant to paragraph (a) above, provided that such requested limit 

meets the Clearing House’s risk tolerance, as determined by the Clearing House 

in its sole discretion. Upon the Clearing House notifying the ForexClear 

Clearing Member that such requested limit is approved, including the time at 

which such limit shall take effect, such limit shall be considered the “Settlement 

Position Limit” for the given ForexClear Currency for the relevant ForexClear

Clearing Member.

1.19.3 Notwithstanding the acceptance by the Clearing House of a revised Settlement

Position Limit pursuant to Section 1.19.2, the Clearing House may increase or

decrease such revised limit, in its sole discretion and upon reasonable notice to

the given ForexClear Clearing Member, for risk, legal or regulatory

considerations, provided that in no event shall an increased limit exceed the

Settlement Position Limit determined by the Clearing House pursuant to Section

1.19.1 or the Regulations.

1.19.4 Subject to Section 1.19.2, the Clearing House shall notify ForexClear Clearing 

Members of Settlement Position Limits and Settlement Exposure Limits via the 

ForexClear Service Portal or member circular.

1.20 Mandatory ForexClear Swap Limit

1.20.1 Subject to the Regulations, the Clearing House shall, in its sole and absolute 

discretion, determine from time to time the Mandatory ForexClear Swap Limit 

in respect of each ForexClear Clearing Member and each ForexClear Currency. 

The Clearing House shall notify each ForexClear Clearing Member of the 

Mandatory ForexClear Swap Limits applicable to it via the ForexClear Service 

Portal.

1.21 ForexClear STM Contracts – Conversions

1.21.1 If a ForexClear Clearing Member wishes to make a conversion pursuant 

to Regulation 106A, it must complete and deliver to the Clearing House 
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such documentation (if any) as the Clearing House determines, in its sole 

discretion, from time to time.

1.22 ForexClear Settlement Reduction Service

1.22.1 The Clearing House offers an optional “ForexClear Settlement Reduction 

Service” to ForexClear Clearing Members to facilitate the registration of 

ForexClear Transactions in connection with a ForexClear Settlement Event.

1.22.2 ForexClear Clearing Members who wish to opt-in to the ForexClear Settlement 

Reduction Service 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). The Clearing House may accept a request to join the ForexClear 

Settlement Reduction Service in its sole discretion.

1.22.3 From the occurrence of a ForexClear Settlement Event to (but excluding) 

5:00PM Eastern Standard Time on the same day, the Clearing House may bind 

and conclude one or more Mandatory Settlement ForexClear Swap Contracts 

between the Impacted ForexClear Option Clearing Member or any other 

ForexClear Option Clearing Member who has opted-in to the ForexClear 

Settlement Reduction Service on the one hand, and the Clearing House on the 

other hand, in each case on such terms as the Clearing House shall in its sole 

and absolute discretion determine (but, subject in all cases to the requirements 

set forth in Regulations 100 and 105).

1.22.4 Following the conclusion of the given ForexClear Settlement Event, the 

Clearing House shall provide notice to each ForexClear Option Clearing 

Member specifying the Mandatory Settlement ForexClear Swap Contracts (if 

any) entered into on behalf of such ForexClear Option Clearing Member. The 

Clearing House shall prescribe the form and manner of such notice from time 

to time in its sole discretion.

1.22.5 The Clearing House does not guarantee the conclusion of the given ForexClear 

Settlement Event through the process set forth in paragraph 1.22.3 above.

1.23 ForexClear Spot Transactions and ForexClear Deliverable Forward 

Transactions – Reporting of Hedge Transactions 

1.23.1 ForexClear Clearing Members shall, in a manner and at such time as prescribed 

by the Clearing House from time to time, provide to the Clearing House a report 

of the ForexClear Spot Transactions and ForexClear Deliverable Forward 

Transactions entered into by the given ForexClear Clearing Member that were 

not concluded for the purposes of (A) hedging some or all of such ForexClear 

Clearing Member’s foreign exchange exposure, (B) reducing its initial margin 

requirements or (C) reducing its settlement risk, in each case arising under, or 

in connection with, (i) one or more ForexClear Deliverable Transactions 

submitted by that ForexClear Clearing Member or (ii) one or more ForexClear 

Deliverable Contracts then registered in its name.
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The foregoing shall not include any ForexClear Spot Transaction or ForexClear 

Deliverable Forward Transaction resulting from the exercise of a ForexClear

Option Contract.
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SCHEDULE 1

CONFIDENTIALITY, NON-DISCLOSURE AND PARTICIPATION IN THE 

FOREXCLEAR DEFAULT MANAGEMENT GROUP

1. Definitions

1.1 "Confidential Material" means data (including but not limited to portfolio data) and 

documents, which are not in the public domain and which are disclosed to the FXCCM, 

its associated companies and advisers, or to which the FXCCM, its associated 

companies and advisers obtains or otherwise has access as a result of participation in 

the ForexClear Default Management Process, (which, for the avoidance of doubt, does 

not include any information, data or documents provided to the Clearing House by the 

FXCCM).

1.2 "FXDMG Member" means an individual appointed by a Nominating FXCCM.

1.3 "Nominating FXCCM" means a ForexClear Member who, through their obligations 

under the ForexClear DMP Annex, makes available a representative to serve on the 

FXDMG.

1.4 "Permitted Purpose" means proper fulfilment by the FXCCM of its duties under the 

ForexClear DMP Annex and includes, after the completion of the Auction, the use by 

the FXCCM its associated companies and advisers (to be determined by it at its 

discretion) of any data or documents related to portfolios successfully won through the 

Auction, for the purposes of its own ongoing portfolio management and to enable it to 

comply with ongoing legal or regulatory requirements.

1.5 References denoting the masculine (including "his" and "he") shall be construed as the 

feminine if the FXDMG Member is female.

1.6 All other terms have the meaning ascribed to them in the Default Rules (including the 

ForexClear DMP Annex).

Confidentiality and Non-Disclosure: General Obligations of the FXCCM

2. Confidentiality

2.1 The FXCCM agrees that, in consideration of being given Confidential Material, it will 

keep all such Confidential Material in the strictest confidence, adhere to the provisions 

of this Agreement in respect thereof and, subject to paragraph 2.3 below, will not 

disclose it to any person without the prior written permission of the Managing Director, 

Risk of the Clearing House or a Director of Risk Management of the Clearing House, 

providing always that the FXCCM shall be relieved of such an obligation of 

confidentiality in respect of any Confidential Material if :

(a) it comes into the public domain other than through a breach by the FXCCM of 

this Agreement; or

(b) b) the FXCCM is expressly obliged to do so by order of a court of competent 

jurisdiction upon the application of a third party, or as a result of any request to 

disclose such part or parts of the Confidential Material in connection with any 
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inquiry or other request by a regulatory authority or self-regulatory authority 

asserting jurisdiction over the FXCCM.

2.2 The FXCCM further agrees that it will not use any Confidential Material for any 

purpose other than the Permitted Purpose. In this regard the FXCCM expressly 

acknowledges and agrees that the Confidential Material may contain commercially 

sensitive information which if used inappropriately or otherwise than in accordance 

with this Schedule 1 might result in the gaining of an unfair commercial advantage by 

the FXCCM over other members of the Clearing House ForexClear Service.

2.3 Subject to paragraph 2.4 below the FXCCM may disclose any Confidential Material to 

any of its employees, representatives, associated companies and advisers on a "strictly 

need to know" basis, in the event that any such person needs that Confidential Material 

for the Permitted Purpose (and to that extent only).

2.4 The FXCCM agrees to establish and adhere to adequate procedures (including, without 

limitation, the establishment of appropriate Chinese walls) to ensure that any employee 

or representative to whom any Confidential Material is disclosed shall not use any part 

or all of that Confidential Material for any proprietary purpose outside the scope of the 

Permitted Purpose.

2.5 This paragraph and the duties hereunder shall survive the termination of this Schedule 

1 and, in relation to any Confidential Material, shall expire on the second anniversary 

of the date the Confidential Material was first provided to the FXCCM.

3. Secrecy

3.1 Except in accordance with the terms of this Schedule 1, the FXCCM agrees that it shall 

treat as strictly confidential and shall not disclose or allow to be divulged to any person:

(a) Confidential Material;

(b) the fact that it has received any Confidential Material;

(c) the existence of any discussions or negotiations between the parties in this 

matter.

(d) details of the Permitted Purpose and any of the proposals, terms, conditions, 

facts or other matters relating to any of the forgoing. Subject only to the 

FXCCM being relieved of such an obligation because of the circumstances 

covered in paragraphs 2.1(a) and 2.1(b).

3.2 The Clearing House undertakes to ensure that the FXCCM is fully appraised of 

information on the ForexClear Default Management Process that it makes public and 

which is accordingly of relevance to the FXCCM's obligations.

4. Property

The parties acknowledge that the property in the Confidential Material (or any part of 

it) shall not pass to the FXCCM or any FXCCM, and the property in the media on which 

it is conveyed to the receiving party shall not pass to the FXCCM or any FXCCM unless 

expressly so agreed by the Clearing House in writing.
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5. Return of Confidential Material

Upon request by the Clearing House, and in any event upon fulfilment of the Permitted 

Purpose, the FXCCM shall promptly return to the Clearing House by a secure method 

of transportation all or any part of the Confidential Material and all copies thereof in its 

possession or control or that of its employees or representatives, including all other 

papers, programs and records incorporating any of that Confidential Material, or shall 

destroy such information and shall certify to the Clearing House in writing that it has 

done so provided that the FXCCM is permitted to retain copies of any Confidential 

Material which it requires as part of its portfolio management or otherwise for legal or 

regulatory reasons.

6. No Representations or Warranties; No Conflict of Interest

6.1 Subject to references made in Paragraph7 (Liability), the Confidential Material is 

disclosed by the Clearing House without any representation or warranty whatsoever as 

to its accuracy or completeness or otherwise.

6.2 The Clearing House acknowledges and agrees that, subject to compliance with the 

terms of this Schedule 1 by the FXCCM and any of its employees or representatives to 

whom Confidential Material is provided in accordance with this Schedule 1, the 

FXCCM's participation in the ForexClear Default Management Process shall not 

prevent the FXCCM from carrying out any transaction, or otherwise providing 

investment services in respect of, investments that the FXCCM may subsequently learn 

are the subject of Confidential Material and, furthermore, the Clearing House agrees 

that it shall not be able to assert that the FXCCM has a conflict of interest in doing so 

nor shall the Clearing House have a claim or action in respect of the foregoing against 

the FXCCM or any of its directors, employees or other representatives.

7. Liability

7.1 Subject to Regulation 52 (Exclusion of Liability), the parties agree and acknowledge 

that neither the Clearing House nor any of its employees or representatives shall have 

any liability whatsoever to the FXCCM or any of employees or representatives, for any 

loss or damage of whatsoever kind howsoever arising directly or indirectly out of or in 

connection with the disclosed Confidential Material or its use.

7.2 The Clearing House accepts liability for any personal injury or death caused by the 

negligence of the Clearing House and any fraud or wilful default on the part of the 

Clearing House, for any actions that it may take on the basis of advice given to it by the 

FXDMG, and for the accuracy of the information (confidential material as defined in 

this Schedule 1) that it distributes to the FXCCM in connection with the ForexClear 

Default Management Process.

7.3 Under no circumstances shall the Clearing House have any liability to the FXCCM for 

(a) any consequential loss or other indirect loss of whatsoever kind or (b) loss of 

anticipated profit (whether direct or indirect).
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8. Remedies

Without affecting any other rights or remedies that the Clearing House may have, the 

FXCCM acknowledges that the Clearing House may be irreparably harmed by any 

breach of the terms of this Schedule 1 and that damages alone may not necessarily be 

an adequate remedy. Accordingly, the Clearing House will be entitled to the remedies 

of injunction, specific performance and other equitable relief, or any combination of 

these remedies, for any threatened or actual breach of its terms, and not proof of special 

damages will be necessary to enforce this Agreement.

Confidentiality and Non-Disclosure and General Terms of Participation in ForexClear 

Default Management Group

9. Conflict of Interest

The FXCCM shall procure that, in the event that a FXDMG Member takes the view 

that a possible conflict of interest may arise with regard to any matter forming part of 

the business of the FXDMG, he shall promptly report his view to the Chairman of the 

FXDMG, who shall act accordingly, taking the advice of other FXDMG Members as 

appropriate.

10. Confidentiality

10.1 Subject to paragraph 10.3 below, the FXCCM shall procure that the FXDMG Member 

shall keep all Confidential Material strictly confidential to himself and will not disclose 

it to any person who is not a FXDMG Member (including, for the avoidance of doubt, 

the FXCCM who recommended his appointment to the FXDMG (the Nominating 

FXCCM) or his employer (if different) or any other employee, adviser, officer or fellow 

worker of that FXCCM or his employer) without the prior written permission of the 

Managing Director, Risk of the Clearing House or his properly authorised delegate, 

providing always that the FXDMG Member shall be relieved of such an obligation of 

confidentiality in respect of any Confidential Material if it comes into the public domain 

in the circumstances covered in paragraphs 2.1(a) and 2.1(b) above.

10.2 Subject to paragraph 10.3 below, the FXCCM shall procure that the FXDMG Member 

shall not use any Confidential Material for any purpose other than the proper fulfilment 

of his duties as a FXDMG Member.

10.3 The parties acknowledge that, in the event that a Default Notice is issued by the 

Clearing House in respect of any ForexClear Clearing Member, the FXDMG Member 

may be required by the Nominating FXCCM and/or his employer (if different) to 

provide certain services to the Clearing House in the management of the default. In 

such event, and only in such event, the parties acknowledge that the FXDMG Member 

shall be entitled to disclose any part or parts of the Confidential Material as may be 

agreed by the Clearing House, in such manner and form and in accordance with such 

procedures as may prescribed by the Clearing House and/or the FXDMG with regard 

to the management of that default.

10.4 Upon request by the Clearing House, and in any event upon termination of the 

membership of the FXDMG Member of the FXDMG, the FXCCM shall procure that 

the FXDMG Member shall promptly return to the Clearing House by a secure method 
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of transportation all or any part of the Confidential Material and all copies thereof in 

his possession or control, including all abstracts, notes, drawings and other papers, 

programs and records incorporating any of that Confidential Material, or shall destroy 

such information and shall certify to the Clearing House in writing that it has done so, 

provided that the FXDMG Member is permitted to retain a copy thereof to comply with 

applicable legal or regulatory requirements.

11. Warranty and Representation

The FXCCM represents and warrants that it will procure that:

(a) the Nominating FXCCM and the FXDMG Member's employer (if different) are 

aware of the obligations of confidentiality arising out of this Procedure; and

(b) nothing in this Schedule 1 will cause the FXDMG Member to breach any duty 

or obligation (whether arising pursuant to contract or otherwise) which he owes 

to the Nominating FXCCM or to his employer, if different, or any other contract 

counterparty of the FXDMG Member.

12. Antitrust

12.1 The FXCCM acknowledges that the FXDMG comprises representatives of competing 

companies and that antitrust law prohibits the sharing of competitively sensitive 

information as between competitors. The FXCCM shall procure that its FXDMG 

Member has been made aware of the relevant obligations under antitrust laws prior to 

attending any meetings or calls of the FXDMG.

12.2 The FXCCM shall procure that the FXDMG Member does not share any competitively 

sensitive information relating to the FXCCM with any other members of the FXDMG. 

In particular, the FXDMG Member should not:

(a) enter into general business discussions about the FXCCM’s business or ventures 

in which it has an interest, except where strictly necessary for the purposes of 

the FXDMG;

(b) disclose or enter into discussions relating to the FXCCM’s spreads, margins, 

commissions (paid or received), fee schedules, pricing policies, current or future 

margins, trading volumes or the FXCCM’s customers;

(c) disclose or enter into discussions relating to the FXCCM’s future plans (such as 

new products or changes to trading arrangements, prospective clients, business 

opportunities or product development plans), strategic plans, or expansion plans; 

or

(d) disclose or enter into discussions relating to prices, commissions paid or payable 

to, or any other terms and conditions of arrangements between the FXCCM and 

other clearing houses, suppliers, brokers or other intermediaries.

12.3 At the beginning of each meeting, the Chairman of the FXDMG will remind the 

participants of their obligations under antitrust law.
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12.4 The Clearing House will circulate to FXDMG Members an agenda in advance of all 

meetings of the FXDMG. All meetings of the FXDMG must proceed strictly in 

accordance with the agenda and will be recorded in minutes circulated by the Clearing 

House. Participants must notify the Clearing House to the extent the minutes do not 

reflect the relevant meeting.

12.5 If any disclosure or discussions that may be contrary to antitrust law are initiated, the 

Chairman of the FXDMG should immediately cease such disclosure or discussions and, 

if specific participants have raised concerns, allow them to record these concerns in the 

minutes.

13. Confidentiality and Non-Disclosure: General Obligations of the Clearing House

The Clearing House will treat all Confidential Material in the terms envisaged in 

Schedule 1 (Confidentiality, non-disclosure and participation in the ForexClear 

Default Management Group), confining use to the ForexClear Default Management 

Process, restricting its availability on a "strictly need to know basis", and exercising 

every duty of care required of it as a Recognised Clearing House and as a Derivatives 

Clearing Organization.
Appendix III: FCM Procedures
FCM PROCEDURES OF THE CLEARING HOUSE

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2.2.7 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 

(except where such FCM ForexClear Contract results from an FCM 

ForexClear Transaction that is a Sub-Block Trading Venue Transaction), 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 2.2.172.2.17) (or its estimated 

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

Tolerance, if any) as a precondition to registration(the “Incremental Risk 

Check”).

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, subject 

to Section 2.2.8(c), such ForexClear Transaction will be rejected.

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

defined in Section 2.2.8(a)2.2.8(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).

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 2.2.242.2.24).

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 whicho are parties to the such trade, the 
FCM Procedures FCM ForexClear

LCH Limited © 2022 - 125 - May June 2023

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 whicho are parties to the trade and the terms of the trade to 

the Clearing House for registration and clearing (such matched trade,

an “FCM ForexClear Transaction”).

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:

(A) 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

(B) 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.

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,
FCM Procedures FCM ForexClear

LCH Limited © 2022 - 126 - May June 2023

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 

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.

2.2.8 Trade Validation and Registration

(a) Process flow description

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

submitted to it for registration as two FCM ForexClear

Contracts or as one ForexClear Contract and one FCM

ForexClear Contract (as applicable) presented by FXPs to

ensure that each such trade meets: (A) the applicable FCM
FCM Procedures FCM ForexClear

LCH Limited © 2022 - 127 - May June 2023

ForexClear Product Eligibility Criteria and the Counterparty 

Technical Validation Check (as defined below); (B) where 

applicable, the Incremental Risk Checks (as defined below); 

and (C) where applicable, the Acceptance Validation Checks 

(as defined below), in each case, required for FCM ForexClear 

Transactions (collectively, the “Validation Checks”).

(B) 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: one for the

FCM ForexClear Contract between the Clearing House and the

relevant FX FCM and the other for the FCM ForexClear

Contract between the Clearing House and the same or another

FX FCM (or, where applicable, the Non-FCM ForexClear

Contract between the Clearing House and the relevant

ForexClear Clearing Member).

(C) 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,

in each case within the required timeframe under Applicable 

Law.

(D) As provided in Section 2.2.7, in respect of messages confirming

registration, the time of dispatch of such message shall be the

Registration Time of that FCM ForexClear Contract.

(E) The account (H or C) and sub-account (if applicable) into

which each trade record is booked is derived from the

BIC/unique identifier code within the message from the FCM

Approved Trade Source System. The BIC links to the FX

FCM reference data.

(F) Both new trade records arising out of the ForexClear

Transaction have the same unique ForexClear ID (the

“ForexClear ID”). Any further events or actions are applied

on the basis of this ForexClear ID, to ensure consistency.
FCM Procedures FCM ForexClear

LCH Limited © 2022 - 128 - May June 2023

(b) “Counterparty Technical Validation Check.” The counterparties to

each trade FCM ForexClear Transaction must be those specified under

the FCM ForexClear Product Eligibility Criteria in respect of such

FCM ForexClear Transaction and (a) the parties submitted in trade

particulars, (b) are each a Non-Defaulting FX FCM clearing the FCM

ForexClear Transaction must be and (c) approved by the Clearing

House to clear the relevant trade type.

Valuation Date and Settlement Date: Iin respect of an FCM ForexClear 

Non-Deliverable Transaction, the Valuation Date and Settlement Date 

for the FCM ForexClear Transaction must meet the criteria set forth in 

the relevant FCM ForexClear Contract Terms.

(c) Incremental Risk Checks

The Clearing House will apply an “Incremental Risk Check” to each 

FCM ForexClear Transaction that is not a Sub-Block Trading Venue 

Transaction. The Incremental Risk Check uses a suitable 

approximation methodology to estimate an FX FCM's Liabilities 

(including the new FCM ForexClear Transaction) against available 

Margin (taking into account MER Buffer and/or ForexClear Tolerance, 

if any). However, any FCM ForexClear Transaction presented by an 

FX FCM that is risk reducing (i.e. results in a reduction of that FX 

FCM's Liabilities) will always pass the Incremental Risk Check, even 

if the FX FCM does not have sufficient Margin for its Liabilities.

Each relevant FX FCM must pass the Incremental Risk Check in order 

for the Clearing House to register two FCM ForexClear Contracts (or 

one FCM ForexClear Contract and one Non-FCM ForexClear 

Contract, as applicable).

If either (or both) FX FCM(s) fail(s) the Incremental Risk Check(s), 

then the FCM ForexClear Transaction will be rejected immediately 

and a notification sent in accordance with Section 2.2.8(a)(iii).

(d) FCM Acceptance

(A) In the case of an FX FCM that has been nominated to register

an FCM ForexClear Transaction on behalf of a third party

Executing Party, the Clearing House will (only where such

FCM ForexClear Transaction is not an FCM Trading Venue

Transaction) provide notification to such FX FCM of the

relevant FCM ForexClear Transaction and that it has been so

nominated, via member reports, the ClearLink API or otherwise

("FCM Notification"). Where an FX FCM is nominated to

clear both FCM ForexClear Contracts arising from the

registration of an FCM ForexClear Transaction in the capacities

described in this paragraph, such FX FCM will receive two

separate FCM Notifications from the Clearing House in relation

to such FCM ForexClear Transaction. All FCM Notifications

shall be provided within the required timeframe under
Appendix IV: FCM Regulations
FCM REGULATIONS OF THE CLEARING HOUSE

LCH LIMITED
FCM Regulations

- 14 - June 2023

“FCM Foreign Futures 

Client Secured Amount 

Depository Account”

means an omnibus account maintained by an FCM 

Clearing Member for its FCM Clients with a Permitted 

Depository (including any applicable “PPS Accounts”, 

which are described in the FCM Procedures), which is 

maintained in accordance with Part 30 of the CFTC 

Regulations, and which contains the FCM Foreign Futures 

Client Funds of its FCM Clients held in connection with 

Foreign Futures Products or other Foreign Futures/Options 

Contracts (and, if applicable, the funds of other 30.7 

customers of an FCM Clearing Member held in connection 

with other Foreign Futures/Options Contracts).

“FCM ForexClear Clearing 

Member”

means an FCM Clearing Member approved by the Clearing 

House (in accordance with the FCM Regulations and the 

FCM Procedures) to clear FCM ForexClear Transactions 

and register FCM ForexClear Contracts.

“FCM ForexClear Clearing 

Services”

means the services provided by an FCM Clearing Member 

in connection with FCM ForexClear Contracts cleared on 

behalf of its FCM Clients.

“FCM ForexClear 

Contract”

means a contract that is registered for clearing and is 

entered into by the Clearing House with an FCM Clearing 

Member on the FCM ForexClear Contract Terms, and 

which is governed by these FCM Regulations.

“FCM ForexClear Contract 

Terms”

means the terms applicable to each FCM ForexClear 

Contract as set out from time to time in the FCM Product 

Specific Contract Terms and Eligibility Criteria Manual.

“FCM ForexClear Product 

Eligibility Criteria”

means the product eligibility criteria in respect of a type of 

FCM ForexClear Transaction as set out in the FCM 

Product Specific Contract Terms and Eligibility Criteria 

Manual as published on the Clearing House's website from 

time to time to.

“FCM ForexClear NDF 

Contract”

means an FCM Contract entered into by the Clearing House 

with an FCM ForexClear Clearing Member on the FCM 

ForexClear NDF Contract Terms.

"FCM ForexClear NDF

Contract Terms"

means the terms applicable to each FCM ForexClear NDF

Contract as set out from time to time in the FCM Product 

Specific Contract Terms and Eligibility Criteria Manual 

applicable to FCM ForexClear NDF Contracts.

"FCM ForexClear NDF

Transaction"

means a contracttransaction, the details of which may be 

presented to the Clearing House for registration of such 

transaction as two FCM ForexClear NDF Contracts or one 

ForexClear NDF Contract and one FCM ForexClear NDF 

Contract (as the case may be) meeting the applicable FCM 

ForexClear Eligibility Criteria for registration as an FCM
FCM Regulations

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ForexClear NDF Contract, entered into between two 

Executing Parties for purposes of having at least one side of 

such transaction registered with the Clearing House as an 

FCM ForexClear NDF Contract, and the other side of such 

transaction registered with the Clearing House as either an 

FCM ForexClear NDF Contract or a Non-FCM ForexClear 

Contract

“FCM ForexClear NDO 

Contract”

means an FCM Contract entered into by the Clearing House 

with an FCM ForexClear Clearing Member on the FCM 

ForexClear NDO Contract Terms.

"FCM ForexClear NDO 

Contract Terms"

means the terms applicable to each FCM ForexClear NDO

Contract as set out from time to time in the FCM Product 

Specific Contract Terms and Eligibility Criteria Manual 

applicable to FCM ForexClear NDO Contracts.

"FCM ForexClear NDO 

Transaction"

means a contracttransaction, the details of which may be 

presented to the Clearing House for registration of such 

transaction as two FCM ForexClear NDO Contracts or one 

ForexClear NDO Contract and one FCM ForexClear NDO

Contract (as the case may be)meeting the applicable FCM 

ForexClear Eligibility Criteria for registration as an FCM

ForexClear NDO Contract, entered into between two 

Executing Parties for purposes of having at least one side of 

such transaction registered with the Clearing House as an 

FCM ForexClear NDO Contract, and the other side of such 

transaction registered with the Clearing House as either an 

FCM ForexClear NDO Contract or a Non-FCM ForexClear 

Contract

"FCM ForexClear NonDeliverable Contract"means an FCM ForexClear NDF Contract or an FCM 

ForexClear NDO Contract

"FCM ForexClear NonDeliverable Contract 

Terms"

means the FCM ForexClear NDF Contract Terms or FCM 

ForexClear NDO Contract Terms

“FCM ForexClear NonDeliverable Service”means the service provided by the Clearing House under the 

FCM Regulations, whereby the Clearing House makes 

available services in respect of FCM ForexClear NDF 

Contracts and FCM ForexClear NDO Contracts

"FCM ForexClear NonDeliverable Transaction"means an FCM ForexClear NDF Transaction or an FCM 

ForexClear NDO Transaction

“FCM ForexClear 

Suspension Sub-Account”

means the FCM Client Sub-Account of a Pre-Allocation 

FCM Clearing Member that has been established by the 

June 2023
FCM Regulations

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FCM ForexClear Clearing Member to register Unallocated 

FCM ForexClear Contracts.

“FCM ForexClear 

Transaction”

means an FCM ForexClear NDF Transaction or FCM 

ForexClear NDO Transactionany transaction entered into 

between two Executing Parties for purposes of having at 

least one side of such transaction registered with the 

Clearing House as an FCM ForexClear Contract, and the 

other side of such transaction registered with the Clearing 

House as either an FCM ForexClear Contract or a NonFCM ForexClear Contract.

“FCM Futures Client 

Funds”

means all cash, securities, receivables, rights, intangibles 

and any other collateral or assets held by an FCM Clearing 

Member (i.e., not furnished to the Clearing House) on 

behalf of its FCM Clients with respect to Futures Products 

or other Futures/Options Contracts.

“FCM Futures Client 

Segregated Depository 

Account”

means an omnibus account maintained by an FCM 

Clearing Member for its FCM Clients with a Permitted 

Depository (including any applicable “PPS Accounts”, 

which are described in the FCM Procedures), which is 

segregated in accordance with Section 4d(a) of the CEA 

and the CFTC Regulations, and which contains the FCM 

Futures Client Funds of its FCM Clients held in connection 

with Futures Products or other Futures/Options Contracts 

(and, if applicable, the funds of other futures customers of 

an FCM Clearing Member held in connection with other 

Futures/Options Contracts).

“FCM Joint Rates Service 

Clearing Member” 

means an FCM Clearing Member that provides FCM 

SwapClear Clearing Services and FCM Listed Interest 

Rates Clearing Services. 

“FCM Listed Interest Rates 

Business”

means any transaction, obligation or liability arising out of 

an FCM Listed Interest Rates Contract.

“FCM Listed Interest Rates

Clearing Member”

means an FCM Clearing Member approved by the Clearing 

House (in accordance with the FCM Regulations and the 

FCM Procedures) to clear FCM Listed Interest Rates

Transactions and register FCM Listed Interest Rates

Contracts.

“FCM Listed Interest Rates

Clearing Services”

means the services provided by an FCM Clearing Member 

in connection with FCM Listed Interest Rates Contracts 

cleared on behalf of its FCM Clients.

“FCM Listed Interest Rates 

Contract”

means a Foreign Futures/Options Contract that is registered 

for clearing and is entered into by the Clearing House with 

an FCM Clearing Member on the FCM Listed Interest 

June 2023
FCM Regulations

- 21 -

the Clearing House, which are applicable to FCM Clearing 

Services, as published and amended from time to time.

“FCM SwapClear Clearing 

Services”

means the services provided by an FCM Clearing Member 

in connection with FCM SwapClear Contracts cleared on 

behalf of its FCM Clients.

“FCM SwapClear 

Contract”

means a contract that is registered for clearing and is 

entered into by the Clearing House with an FCM Clearing 

Member on the FCM SwapClear Contract Terms, and 

which is governed by these FCM Regulations.

“FCM SwapClear Contract 

Terms”

means the terms applicable to each FCM SwapClear 

Contract as set out from time to time in the FCM Product 

Specific Contract Terms and Eligibility Criteria Manual.

“FCM SwapClear Product 

Eligibility Criteria”

means the product criteria set out in paragraphs 1.1(a), 

1.1(b) or 1.1(c), and paragraph 3 of Part B of Schedule 1 to 

the FCM Product Specific Contract Terms and Eligibility 

Criteria Manual.

“FCM SwapClear 

Suspension Sub-Account”

means the FCM Client Sub-Account of a Pre-Allocation 

FCM Clearing Member that has been established by the 

FCM SwapClear Clearing Member with a view to 

registering Unallocated FCM SwapClear Contracts.

“FCM SwapClear 

Transaction”

means any transaction, the details of which are may be

presented to the Clearing House via an FCM Approved 

Trade Source System for registrationthe purpose of having 

such transaction registered at the Clearing House as two 

FCM SwapClear Contracts (or, where a corresponding 

presentation has been made in respect of the same 

transaction for registration of a Non-FCM SwapClear 

Contract, one Non-FCM SwapClear Contract and one 

FCM SwapClear Contract of such transaction as two FCM 

SwapClear Contracts or one SwapClear Contract and one 

FCM SwapClear Contract (as the case may be)), regardless 

of whether (a) such transaction (a) is an existing swap 

transaction, (b) it was entered into in anticipation of 

clearing, and or (c) it is contingent on clearing.

“FCM Swaps Client Funds” means all cash, securities, receivables, rights, intangibles 

and any other collateral or assets held by an FCM Clearing 

Member (i.e., not furnished to the Clearing House) on 

behalf of its FCM Clients with respect to Swaps Products 

or other Cleared Swaps.

“FCM Swaps Client 

Segregated Depository 

Account”

means an omnibus account maintained by an FCM 

Clearing Member for its FCM Clients with a Permitted 

Depository (including any applicable “PPS Accounts”, 

which are described in the FCM Procedures), which is 

June 2023
FCM Regulations

- 23 -

board of trade, (ii) an option on any such contract or (iii) 

any similar type of contract, and which, in the case of any 

of the foregoing, requires an FCM to hold such contract 

(and maintain any related margin) pursuant to CFTC Rule 

30.7 if cleared by an FCM for a 30.7 customer.

“Foreign Futures Product” means a Product that constitutes a Foreign Futures/Options 

Contract. Such Products are: FCM Listed Interest Rates 

Contracts.

“ForexClear Clearing 

Member”

means a person who is designated as such by the Clearing 

House pursuant to the UK General Regulations and who is 

not an FCM Clearing Member.

“ForexClear Contribution” has the meaning assigned to it in the UK General 

Regulations.

“ForexClear Determination 

Date”

has the meaning assigned to it in the UK General 

Regulations.

“ForexClear DMP” has the meaning assigned to it in the ForexClear DMP 

Annex of the Default Rules.

“ForexClear Tolerance” has the meaning assigned to it in the FCM Procedures.

“ForexClear NDF 

Contract”

has the meaning assigned to it in the UK General 

Regulations.

“ForexClear NDO 

Contract”

has the meaning assigned to it in the UK General 

Regulations.

“Futures Account Class” means the account class for futures accounts (as defined in 

CFTC Regulation 190.01(a)(i)) for purposes of Part 190 of 

the CFTC Regulations and Section 4d(a) of the CEA.

“Futures/Options 

Contract”

means the type of contract which is either (i) a contract for 

the purchase or sale of a commodity for future delivery that 

is traded on or subject to the rules of an Exchange, (ii) an 

option on any such contract or (iii) any similar type of 

contract, and which, in the case of any of the foregoing, is 

required to be segregated (along with any related margin) 

pursuant to Section 4d(a) of the CEA if cleared by an FCM 

for a customer.

“Futures Product” means a Product which constitutes a Futures/Options 

Contract.

“Governmental Authority” means any:

June 2023