An LSEG Business

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 On-venue trade workflow

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 proposal to enhance 

the ForexClear trade registration workflow for eligible products traded on trading venues. 

Part I: Explanation and Analysis

ForexClear plans to enhance its trade registration workflow by accepting for clearing eligible NDF 

trades executed on-venue with a maximum trade notional of USD25mm, with incremental risk 

checks undertaken after registration. This enhanced workflow will be subject to certain conditions, 

including that clearing members hold sufficient pre-funded resources as a buffer. The goal is to 

reduce the likelihood of trade rejection where clearing members execute trades on a trading venue 

with the intention to clear. 

Trading venues directly connected to ForexClear will be able to opt into this offering1

. ForexClear 

will introduce certain controls to implement the new functionality, and any trades that do not meet 

the required conditions for automatic acceptance will continue to be subject to the existing 

incremental risk check process. Trades will be accepted or rejected depending on the outcome of 

this process. 

1 The new functionality will support the launch of a new LSEG trading platform, NDF Matching, scheduled for Q3 20231, which 

plans to offer execution for NDFs traded with the intention to be cleared at LCH. The functionality will also be available to any 

other eligible trading venues directly connected to ForexClear, upon LCH approval. 
Controls

The automatic acceptance of eligible NDFs will be subject to ForexClear clearing members holding 

certain levels of collateral in the relevant account, as well as based on the clearing member’s 

Internal Credit Score (ICS)2 as assigned by LCH. A separate risk check will be applied to the 

automatically accepted trades once registered for clearing, in order to identify any collateral shortfall 

to be covered. ForexClear will monitor collateral usage on all clearing members’ accounts in real 

time to assess whether clearing members continue to have sufficient buffer resources to clear 

eligible NDFs under the enhanced workflow. An automated feature will also be introduced to 

prevent ineligible clearing members participating in the enhanced workflow. 

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. 

A number of definitions have been added in the General Regulations, such as ‘Over-25 NDF 

Transaction’ on p56, and ‘Sub-25 NDF DTV Transaction’ and ‘Sub-25 NDF Transaction’ on p74. 

These definitions set out whether a ForexClear NDF transaction has a notional amount greater or 

less than USD25mm, the amount by which trades will qualify for registration under the enhanced 

model. The same definitions have been replicated for the FCM Clearing Members in the FCM 

Regulations on pages 19 and 21. 

The Procedures Section 2I for non-FCM Clearing Members, Section 1.3 “Trade Validation and 

Registration”, and further sub-section (a) “Process Flow Description” (see p8) have been updated 

to include changes to the trade flow that can occur when eligible trades are automatically accepted 

for clearing. Two new sections, d) “Automatic Rejection” on p13, and 1.3.16 on “Risk Status” on 

p31, have been added to describe the additional features introduced with the enhanced workflow. 

The same amendments have been replicated for the FCM Clearing Members in the FCM 

Procedures Section 2.2.8 “Trade Validation and Registration” on pages 165-169 and Section 2.2.9 

Risk Status on p176.

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 B (§39.11) (Financial Resources) and Core 

Principle C (§39.12) (Participant and Product Eligibility) under the CFTC regulations.

2 LCH calculates and assigns an ICS for each clearing member to which it has an exposure, based on a qualitative and quantitative 

assessment. The ICS is set between 1 and 10, whereby 1 represents low default probability in line with the AAA public rating, and 10 

is equivalent to defaulting counterparty.
Changes described in this filing will not impact LCH’s ability to meet the objectives of Core Principle 

B (§39.11) on Financial Resources, as ForexClear will continue to maintain an appropriate amount 

of financial resources to manage its exposures to Clearing Members.

In addition, changes described in this filing will not impact the LCH’s ability to meet the objectives 

of Core Principle C (§39.12) on Participant and Product Eligibility, 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. 

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 the ForexClear On-venue trade 

workflow. 

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

- iJuneFebruary 2023

GENERAL REGULATIONS OF

LCH LIMITED
Clearing House: General Regulations

- 2-

JuneFebruary 2023

"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

"Alternative Data" 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

"Automatic Rejection"

"Applicable Law"

has the meaning assigned to it in Procedure 2I

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.
Clearing House: General Regulations

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JuneFebruary 2023

"delivery contract" means a Cleared Exchange Contract or Listed Interest Rates 

Contract between the Clearing House and a Member:

(a) for the immediate sale and purchase of a reference 

asset or commodity arising on the exercise of an 

option pursuant to these Regulations; or

(b) for the sale and purchase of a reference asset or 

commodity for delivery on the date specified in the 

contract or on the date agreed between the parties, in 

either case being an open contract under which 

tender is not required to be given

"delivery month" means in respect of an exchange contract, the meaning 

ascribed to it in the Exchange Rules governing such contract, 

or in respect of a Listed Interest Rates Contract, the meaning 

ascribed to such Contract in the Listed Interest Rates 

Contract Terms

"Depository" means a collateral agent, custodian, central securities 

depository, securities settlement system or other similar 

entity

"Designated Group Member" has the meaning assigned to it in Chapter XIV(k)

"Designated Rates Exchange" has the meaning assigned to it in Regulation 100(a)

"Designated Listed Interest 

Rates Contract "

has the meaning assigned to it in Regulation 100(b)

"Designated Rates Exchange" has the meaning assigned to it in Regulation 100(a)

"Designated Trading Venue" means a Trading Venue that is of a type designated by the 

Clearing House to qualify as a Designated Trading Venue

"Determination Date" means the date for calculation of a Contribution other than 

an Unfunded Contribution or a Supplementary Contribution, 

as provided for in a Supplement, and includes an Equities 

Determination Date, a ForexClear Determination Date, a 

Listed Interest Rates Determination Date, a RepoClear 

Determination Date and a SwapClear Determination Date

"Determined Omnibus Net 

Segregated Clearing Clients"

has the meaning assigned to it in the Client Clearing Annex 

to the Default Rules
Clearing House: General Regulations

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JuneFebruary 2023

"OTC Service" means a service provided by the Clearing House for the 

clearing of a category of OTC Contract

"OTC Transaction" means a transaction being a SwapClear Transaction, 

RepoClear Transaction, RepoClear Term £GC Transaction, 

Repo Trade, Bond Trade or Term £GC Trade, or ForexClear 

Transaction

“Overnight Funding Account”

“Overnight Funding 

Collateral”

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”. .

(iii)(ii)

"Over-25 NDF Transaction" means a ForexClear NDF Transaction that has a notional 

amount greater than USD 25 million

"Own Resources Provision" 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

“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
Clearing House: General Regulations

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JuneFebruary 2023

"Rejection Election"

"Rejecting Compression 

Clearing Member”

has the meaning assigned to it in Procedure 2I

has the meaning assigned to it in Regulation 56

"Related Contract" means: (i) in relation to the SwapClear Service, a Related 

SwapClear Contract (as such term is defined in the 

Procedures); (ii) in relation to the RepoClear Service, a 

Related RepoClear Contract (as such term is defined in the 

Procedures); (iii) in relation to the ForexClear Service, a 

Related ForexClear Contract (as such term is defined in the 

Procedures); (iv) in relation to the EquityClear Service, a 

Related EquityClear Contract (as such term is defined in the 

Procedures); (v) in relation to the Listed Interest Rates

Service, a Related Listed Interest Rates Contract (as such 

term is defined in the Procedures)

"Relevant Auction Contract" has the meaning given to the term in the Client Clearing 

Annex

"Relevant Business" has the meaning as described in Default Rule 15(c)

"Relevant Client Clearing 

Business"

means the Client Clearing Business conducted by a 

particular Clearing Member in a particular Service

"Relevant Contract" has the meaning assigned to it in the Client Clearing Annex

"Relevant Default" has the meaning ascribed to it in Rule S1 of Part A of the 

Rates Service Default Fund Supplement - SwapClear, Rule 

F2 of the ForexClear Default Fund Supplement or Rule R2 

of the RepoClear Default Fund Supplement, as applicable

"Relevant FX Amounts" means, in respect of a ForexClear Option Clearing Member 

and a day, all amounts that are due to be received by

such ForexClear Option Clearing Member on such day 

under a ForexClear Option Contract, ForexClear Swap 

Contract, ForexClear Deliverable Forward Contract and/or 

ForexClear Spot Contract in any ForexClear Currency

"Relevant FX Liability" has the meaning assigned to it in Regulation 101

"re-opening contract" means a contract arising pursuant to Regulation 30(b) or 

30(c)

"RepoClear Additional 

Payments Cap"

means, in respect of a RCM on any date, an amount equal to 

the Clearing Member Current Collateral Balance of that 

RCM in connection with its RepoClear Business as at the 

date of the Default causing losses leading to an Insufficient 

Resources Determination (or, where such an Insufficient 

Resources Determination is made following concurrent 

Defaults, the date of the earliest Default)
Clearing House: General Regulations

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"Revised Limits" has the meaning assigned to it in Regulation 100

"Risk Neutralisation" has the meaning assigned to it in the Default Rules

"Risk Status" means a status that the Clearing House designates an 

FXCCM based on (i) the Clearing House’s assessment of the 

FXCCM’s collateral and liabilities in respect of the 

ForexClear service, and its creditworthiness, and (ii) whether 

the FXCCM is a Defaulter.

"Rule 19 Certificate" has the meaning assigned to it in Rule 19 of the Default Rules

"Rulebook" means the Regulations, Default Rules, Settlement Finality 

Regulations, Procedures, and such other rules of the Clearing 

House, as published and amended from time to time

"Rules Change Committee" means the decision-making body that will oversee and 

implement all material alterations, amendments or 

extensions to the Rulebook or the Clearing Membership 

Agreement in accordance with its terms of reference

"Rules of the Clearing House" means the Rulebook of the Clearing House including the 

General Regulations, Default Rules, Settlement Finality 

Rules and Procedures

"SC Regulations" means the rules and regulations of the Clearing House 

denoted as such

"SCM Branch" means a branch or part of a SwapClear Clearing Member, 

not being a different legal person from the SwapClear 

Clearing Member, which is authorized by the Clearing 

House to submit to the Clearing House, in the name of that 

SwapClear Clearing Member, SwapClear Transactions for 

registration, subject to these Regulations and the Procedures, 

by the Clearing House as SwapClear Contracts

"Securities Collateral" means Collateral that is in the form of securities

"Security Deed" means a security deed entered into by a Clearing Member in 

favour of its Clearing Clients in the form prescribed by the 

Clearing House from time to time and published on the 

Clearing House's website

"segregated client" means a person whose monies are held by a Member 

separately from the Member’s own monies with whom the 

Member has agreed (or in respect of which the Member is 

required) not to use such person’s monies for the Member’s 

own account
Clearing House: General Regulations

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JuneFebruary 2023

"seller" means a Member (or the Clearing House where the context 

so requires) who is a seller under the terms of an exchange 

contract, a Cleared Exchange Contract, a RepoClear 

Transaction, a RepoClear Term £GC Transaction, a 

RepoClear Contract, a RepoClear Term £GC Contract, an 

EquityClear ATP Match, an EquityClear Novation 

Transaction, an EquityClear Contract, a Rates Exchange 

Match, or a Listed Interest Rates Novation Transaction, as 

the case may be

"Service" means any one of the services made available by the Clearing 

House: (i) to an Exchange; (ii) under the SwapClear 

Regulations and under the FCM Regulations in respect of 

FCM SwapClear Contracts; (iii) under the RepoClear 

Regulations; (iv) under the EquityClear Regulations; (v) 

under the ForexClear Regulations and under the FCM 

Regulations in respect of FCM ForexClear Contracts; or (vi) 

under the Listed Interest Rates Regulations and under the 

FCM Regulations in respect of FCM Listed Interest Rates 

Contracts

"Separate Risk Check" has the meaning assigned to it in Procedure 2I

"settlement contract" means a contract between the Clearing House and a Member 

arising pursuant to Regulation 23(b) or Regulation 110(a)

“Settlement Cycle Failure” has the meaning assigned to it in Regulation 101(h)

"Settlement Exposure

Amount"

has the meaning assigned to it in Regulation 100

"Settlement Exposure Limit" means, with respect to a ForexClear Option Clearing 

Member and a given ForexClear Currency, the "Settlement 

Exposure Limit" determined in accordance with the 

Procedures and made available from time to time by the 

Clearing House to that ForexClear Option Clearing Member, 

being the maximum permitted net deliverable or payable 

value in such currency on any given day arising from all 

ForexClear Contracts (other than ForexClear NonDeliverable Contracts) that have a Settlement Date falling 

more than two business days after such day

"Settlement Exposure Limit 

Cap"

means, with respect to a given ForexClear Option Clearing 

Member and a given ForexClear Currency, 

USD5,000,000,000 (as amended from time to time in 

accordance with the Regulations)

"Settlement Position Amount" has the meaning assigned to it in Regulation 100
Clearing House: General Regulations

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JuneFebruary 2023

“Standard Collateral”

"Standard Terms"

means the amount of Collateral recorded to the Proprietary 

Account of a SwapClear Clearing Member, which is not 

Client Buffer and Overnight Funding Collateral

means that part of the SwapClear Contract Terms, the 

RepoClear Contract Terms, the ForexClear Contract Terms, 

or, in respect of a Designated Listed Interest Rates Contract, 

the Listed Interest Rates Contract Terms designated as 

Standard Terms by the Clearing House from time to time

"STM Conversion Contracts" has the meaning assigned to it in Regulation 57A

"STM Conversion Date" has the meaning assigned to it in Regulation 57A

"STM Conversion Request" has the meaning assigned to it in Regulation 57A

"strike price" means the price specified in an option contract which 

becomes the price of the reference asset or commodity under 

a contract for the future sale and purchase of that reference 

asset or commodity for future delivery or, as the case may 

be, under a delivery contract, in either case on the exercise 

of the option the subject of such option contract, in 

accordance with Exchange Rules, these Regulations and the 

Procedures, as applicable

"Sub-25 NDF DTV 

Transaction"

means, in respect of a Designated Trading Venue, a Sub-25 

NDF Transaction that is executed on such Designated 

Trading Venue

"Sub-25 NDF Transaction" means a ForexClear NDF Transaction that has a notional 

amount of equal to, or less than, USD 25 million

"Sub-Block Trading Venue 

Transaction"

means a transaction, identified by the Clearing House as 

having been executed on a Trading Venue, the notional 

amount of which is below the minimum block size 

determined by the Clearing House in its sole and absolute 

discretion and published on the Clearing House’s website in 

respect of the particular transaction and in effect as of the 

date of presentation of such transaction to the Clearing 

House for registration

"Supplement" means a supplement specific to a particular Service and 

includes the Equities Default Fund Supplement, the 

ForexClear Default Fund Supplement, the Rates Service

Default Fund Supplement – Listed Interest Rates, the 

RepoClear Default Fund Supplement and the Rates Service 

Default Fund Supplement – SwapClear 
Appendix II: Procedure Section 2I 

ForexClear Clearing Service
CORPORATE

LCH LIMITED 

PROCEDURES SECTION 2I 

FOREXCLEAR CLEARING SERVICE
Clearing House Procedures ForexClear Service 

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Individual Segregated Account of the FXCCM will map onto 

one such segregated sub-account in the client "C" positionkeeping account and one such segregated sub-account in the 

client "C" collateral account, each Indirect Gross Account of 

the FXCCM will map onto one such segregated sub-account in 

the client "C" position-keeping account and one such 

segregated sub-account in the client "C" collateral account, and 

each Omnibus Segregated Account will map onto one such 

segregated sub-account in the client "C" position-keeping 

account and one such segregated sub-account in the client "C" 

collateral account. 

In the case of Omnibus Gross Segregated Accounts, the relevant 

segregated sub-accounts of the "C" position-keeping account and 

the client "C" collateral account will be further segregated into 

sub-accounts for each Omnibus Gross Segregated Clearing Client 

or, where applicable, a group of Combined Omnibus Gross 

Segregated Clearing Clients together.

In the case of Indirect Gross Accounts, the relevant segregated 

sub-accounts of the client "C" position-keeping account will be 

further segregated into position-keeping sub-accounts for each 

Indirect Gross Sub-Account (relating to each Indirect Clearing 

Client).

1.2.4 Branches

(a) Submission of a static data form to LCH's Onboarding department by 

an FXCCM will also allow an FXCCM to be provided with one or 

more sub-accounts for any branch of that FXCCM (for positionkeeping purposes) within that FXCCM's "H" position-keeping account.

(b) Because the single account reflects the consolidated balances and 

liabilities of the FXCCM, the balances and liabilities associated with 

ForexClear Transactions submitted by FXDs and/or per branch will be 

provided as an estimate (if applicable).

(c) Where a ForexClear Transaction is presented for clearing by a branch 

of an FXCCM, it is deemed to have been presented by, and in the name 

of, the relevant FXCCM.

1.2.5 Novation and Registration

(a) A ForexClear Transaction must satisfy the applicable ForexClear 

Eligibility Criteria (set out in the Product Specific Contract Terms and 

Eligibility Criteria Manual as published on the Clearing House's 

website from time to time) at the Registration Time. Upon a 

ForexClear Transaction being submitted to the Clearing House for 

registration, the Clearing House will determine whether to accept or 

reject the ForexClear Transaction within the required timeframe under 

Applicable Law. Where the Clearing House determines to accept the 
Clearing House Procedures ForexClear Service 

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ForexClear Transaction, registration shall occur immediately and the 

ForexClear Transaction shall be automatically replaced with two 

separate ForexClear Contracts or one ForexClear Contract and one 

FCM ForexClear Contract (as applicable).

(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 or Separate Risk Check (each 

as defined herein), whereas applicable, then, subject to Section 

1.3.3(b)(iii)(A) in respect of the Incremental Risk Check, 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 any relevant FXCCMs has not 

provided sufficient Collateral with respect to its Liabilities or estimated 

Liabilities prior to registration, each such the FXCCMs shall be bound 

by the terms of its the relevant ForexClear Contract(s), and (ii) if the

Clearing House rejects a ForexClear Transaction for reasons of 

insufficient Collateral, the Clearing House shall not be liable to any 

FXCCM or any other person in connection with the rejection of such 

ForexClear Transaction.

(e) Once a ForexClear Transaction has passed the Validation Checks (as

defined in Section 1.3.3(a)) and the Clearing House has determined to 

accept the ForexClear Transaction for registration, the Clearing House 

will send a message confirming the registration of the ForexClear 

Transaction as two ForexClear Contracts or one ForexClear Contract 

and one FCM ForexClear Contract (as applicable), including a 

datestamp of the relevant registration time, in accordance with Section 

1.3.3(a)(iii). For the purpose of the ForexClear Regulations, the time of 

dispatch of such message shall be the "Registration Time" of such 

ForexClear Contracts.

(f) The definitive report of a registered ForexClear Contract will be shown 

on the "All Open Contracts" report issued by ForexClear Reporting.

(g) If an FXCCM is declared a Defaulter, the Clearing House will not 

register any ForexClear Contract in the name of such Defaulter (except 

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

Non-Defaulting FXCCMs will continue to be registered in accordance 

with, and subject to, the Rulebook.
Clearing House Procedures ForexClear Service 

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1.3 Trade Management; Trade Registration Facilitation

1.3.1 Trade Capture: After the execution of a ForexClear Transaction (a "trade"), 

each FXP who is a party to the trade will submit individual instructions to the 

ForexClear Approved Trade Source System for matching and clearing of the 

trade. FXPs are not required to submit a confirmation of any trade presented to 

the Clearing House for registration. Presentation of the matched trade terms 

through the ForexClear Approved Trade Source System will ensure that the 

agreed terms of the trade are recorded.

Once the ForexClear Approved Trade Source System receives the trade 

instructions from the FXPs who are parties to the trade, the ForexClear 

Approved Trade Source System matches both instructions. The ForexClear 

Approved Trade Source System validates the trade using the applicable 

ForexClear Eligibility Criteria and will, if appropriate, present a single 

message containing the names of the FXPs who are parties to the trade and the 

terms of the trade to the Clearing House for registration and clearing (such 

matched trade, a "ForexClear Transaction").

The Clearing House will determine whether to accept or reject the ForexClear 

Transaction within the required timeframe under Applicable Law. In respect 

of a ForexClear Transaction which is:

(a) a Trading Venue Transaction, the Clearing House will notify the 

ForexClear Clearing Members, Trading Venue and, if the originating 

ForexClear Approved Trade Source System is different to the Trading 

Venue, the originating ForexClear Approved Trade Source System of 

registration or rejection of the ForexClear Transaction; or

(b) not a Trading Venue Transaction, the Clearing House will notify the 

ForexClear Clearing Members (via the originating ForexClear 

Approved Trade Source System or ClearLink API) of registration or 

rejection of the ForexClear Transaction,

in each case within the required timeframe under Applicable Law.

1.3.2 The ForexClear Approved Trade Source Systems 

FXCCMs must not submit instructions to the Clearing House for trades which 

will not meet the ForexClear Eligibility Criteria. The Clearing House will 

register a ForexClear Transaction on the basis of the data provided to it by the 

ForexClear Approved Trade Source System and has no obligation to verify 

that the details received from the ForexClear Approved Trade Source System

in respect of a ForexClear Transaction properly reflect the trade entered into 

by the relevant FXPs.

Application for ForexClear Approved Trade Source System status shall be 

made in accordance with the policies published from time to time on the 

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 
Clearing House Procedures ForexClear Service 

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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 

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 Trade Validation and Registration

(a) Process Flow Description

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

submitted to it for registration as two ForexClear Contracts or 

as one ForexClear Contract and one FCM ForexClear Contract 

(as applicable) by FXPs 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) with respect to 

each required for ForexClear Transaction, except a Sub-Block 

Trading Venue Transaction and a Sub-25 NDF DTV 

Transactions and, with respect to each ForexClear Deliverable

Transaction, a Settlement Exposure Limit Checks (as described 

hereindefined below) with respect to each ForexClear 

Deliverable Transaction and Separate Risk Checks (as defined 

below) with respect to each Sub-25 NDF DTV Transaction

(collectively, the "Validation Checks").
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(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:

(A) one for the ForexClear Contract between the Clearing 

House and the relevant FXCCM; and

(A)(B) the other for the ForexClear Contract between the 

Clearing House and the same or another relevant

FXCCM or for the FCM ForexClear Contract between 

the Clearing House and an FCM Clearing Member (as 

applicable).

(ii)(iii) 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 (as applicable); 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 all Applicable 

Law. 

(iii)(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.

(iv)(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. The BIC links to the FXCCM reference data.

(v)(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) Checks

(vi)(i) “Counterparty Technical Validation Check” The 

counterparties to each ForexClear Transaction trade must be

those specified under the ForexClear Eligibility Criteria in 
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respect of such ForexClear Transaction and (a) the parties 

submitted in trade particulars FXPs, (b) are each a NonDefaulting FXCCM clearing the ForexClear Transaction must 

be and (c) approved by the Clearing House to clear the relevant 

trade type (the “Counterparty Technical Validation Check”). 

(ii) Valuation Date and Settlement Date: Iin 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

(iii) The Clearing House will apply:

(A) an "Incremental Risk Check" to each ForexClear 

Transaction, except which is not a Sub-Block Trading 

Venue Transaction and a Sub-25 NDF DTV 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; 

(B) . 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; and.

(C) a “Separate Risk Check” to each Sub-25 NDF DTV 

Transaction. The Separate Risk Check is to determine

whether, in relation to any FXCCM clearing the Sub-25 

NDF DTV Transaction:

2 As amended from time to time as per relevant EMTA Template.
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(i) its available Collateral (taking into account 

ForexClear Tolerance and/or MER Buffer made 

available by the Clearing House, if any) compared 

with its Liabilities (excluding the new Sub-25 NDF

DTV Transaction) is sufficient, taking into account 

the Clearing House’s internal credit rating for such 

FXCCM;

(ii) the Clearing House’s Risk Department has 

requested the Clearing House to reject such Sub-25 

NDF DTV Transaction.; and

(iii) such FXCCM, which is clearing such Sub-25 NDF 

DTV Transaction for a ForexClear Clearing Client, 

has requested the Clearing House to reject such 

Sub-25 NDF DTV Transaction.

(iv) 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.

(v) Both Each relevant FXCCMs to the ForexClear Transaction

must pass the Incremental Risk Check, and Settlement 

Exposure Limit Check and Separate Risk Check (in each case, 

if applicable) in order for the Clearing House to register two 

ForexClear Contracts or one ForexClear Contract and one FCM 

ForexClear (as applicable)in those FXCCM's names.

(vi) If any relevant either (or both) FXCCM(s) to a ForexClear 

Transaction fail(s) the Incremental Risk Check(s), and/or 

Settlement Exposure Limit Check(s) and/or Separate Risk 

Check (in each case, if applicable), or the ForexClear 

Transaction is subject to Automatic Rejection pursuant to 

Section 1.3.3(d), then the ForexClear Transaction will be 

rejected immediately and a notification sent in accordance with 

Section 1.3.3(a)(iii).

(b)(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 
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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.

(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 
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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

1.3.3(c)(ii).

(d) Automatic rejection 

(i) A Designated Trading Venue may elect, in the manner and by 

the time determined by the Clearing House, that each Over-25 

NDF Transaction executed on such Designated Trading Venue 

and presented to the Clearing House for registration as two 

ForexClear Contracts (or one ForexClear Contract and one 

FCM ForexClear Contract) is automatically rejected by the 

Clearing House (“Rejection Election”). If the Clearing House 

receives a Rejection Election from a Designated Trading Venue

(in the manner and by the time determined by the Clearing

House), it will, on and from the time and date determined by it, 

reject each Over-25 NDF Transaction that is executed on such 

Designated Trading Venue and presented to it for registration

(“Automatic Rejection”).

(ii) If a Designated Trading Venue has provided a Rejection 

Election to the Clearing House, but subsequently determines 

that it no longer wishes Over-25 NDF Transactions executed on 

such Designated Trading Venue to be subject to Automatic 

Rejection, it may withdraw such Rejection Election by 

providing notice to Clearing House in the manner and by the 

time determined by the Clearing House, after which the 

Clearing House will, on and from the time and date determined 

by the Clearing House, cease to apply Automatic Rejection to 

Over-25 NDF Transactions that are executed on such 

Designated Trading Venue and presented to the Clearing House
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for registration, and will, instead, accept or reject each such 

Over-25 NDF Transaction in accordance with the Rulebook. 

(c)(e) 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 

ForexClear Contracts (or one ForexClear Contract and one 

FCM ForexClear Contract (as applicable)) 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 

1.3.3(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 and that Automatic Rejection is deemed to not 

apply. 

1.3.4 Trade Rejection

Trades presented for registration that do not meet the ForexClear Eligibility 

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

are subject to Automatic Rejection, including a trade:

(a) (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) , (b) presented by or on behalf of an FXCCM that 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) , (c) whichthat contains invalid or incomplete message data; and

(d) , 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.
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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.

1.3.5 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 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 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.

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

1.3.3(a)(iii) of such rejection or registration (as applicable); and

(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”.

1.3.7 Trade Cancellation

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

both non-novated trades (ForexClear Transactions) (other than Sub-25 

NDF DTV Transactions) and novated trades (ForexClear Contracts

(other than ForexClear Contracts arising from the clearing of Sub-25 

NDF DTV 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
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(i) The Clearing House accepts trade cancellation instructions 

from the ForexClear Approved Trade Source System for 

ForexClear Transactions (other than Sub-25 NDF DTV 

Transactions) or ForexClear Contracts (other than ForexClear 

Contracts arising from the clearing of Sub-25 NDF DTV 

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 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.

1.3.8 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 NonDeliverable Contracts using the following criteria:

(a) Settlement Rate Option source; and
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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.

1.3.14 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 1.3.13 and (ii) optedout of MER Buffer (the form and manner of such “opt-out” 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.

1.3.15 Completion Margin. The Clearing House shall calculate and call each 

FXCCM for “completion margin.” Completion margin is a component of 

each 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 

next-day 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 
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and its initial margin obligations in relation to ForexClear Contracts due to fix 

or settle the next business day, as applicable.

1.3.16 Risk Status 

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

FXCCM is, or has ceased to be, subject to Risk Status (as applicable) 

and may:

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

is subject to Risk Status, require such FXCCM to transfer

additional Collateral (equal to the value determined by the 

Clearing House) to the Clearing House; and

(ii) notify each Designated Trading Venue of such determination in 

respect of Risk Status, in the manner and at the time determined 

by the Clearing House. 

(b) Without limitation to General Regulation 52, and subject to General 

Regulation 52(e), neither the Clearing House nor any other member of 

the LCH Group shall have any liability whatsoever to any FXCCM or 

any other person in contract, tort (including, without limitation, 

negligence), trust, as a fiduciary or under any other cause of action in 

respect of any damage, loss, cost or expense of whatsoever nature 

suffered or incurred in connection with:

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

ceased to be, subject to Risk Status; 

(ii) any delay in notifying, or failure to notify, a Designated 

Trading Venue of the Clearing House’s determination that an 

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

(i)(iii) a Designated Trading Venue’s use, non-use or transmission of

the information in Section 1.3.16(b)(i), or its delay in 

transmitting, or failure to transmit, such information to any 

person. 

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”);
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The Clearing House will open operational accounts in respect of an FX FCM, 

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

Contributions. The Clearing House may open and close such operational 

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

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

upon request.

2.2.7 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 2.2.18) (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 or 

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

Section 2.2.8(b)(iii)(A) in respect of the Incremental Risk Check, 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)), 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 2.2.25).
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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 suchthe trade, the 

FCM Approved Trade Source System matches both instructions (a 

“trade”). The FCM Approved Trade Source System validates the 

trade using the applicable FCM ForexClear Product Eligibility Criteria 

and will, if appropriate, present a single message containing the names 

of the FXPs 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:

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

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

originating FCM Approved Trade Source System is different to 

the FCM Trading Venue, the originating FCM Approved Trade 

Source System of the registration or rejection of the FCM 

ForexClear Transaction; or

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

will notify the FX FCMs (via the originating FCM Approved 

Trade Source System or ClearLink API) of registration or 

rejection of the FCM ForexClear Transaction,

in each case within the required timeframe under Applicable Law.

(b) ForexClear FCM Approved Trade Source Systems

Application for approved trade source system status shall be made in 

accordance with the policies published from time to time on the 

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

Systems currently approved by the Clearing House is available on the 

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

additional FCM Approved Trade Source System, it will notify FCM 

Clearing Members via member circular.

FCM ForexClear Transactions presented through an FCM Approved 

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

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

of the source of any details of any FCM ForexClear Transaction 

reported to it for registration by an FCM Approved Trade Source 

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

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

into a system of an FCM Approved Trade Source System.

Notwithstanding the designation by the Clearing House of any system 

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

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

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

any FCM Approved Trade Source System or the timeliness or 

otherwise of the delivery of any FCM ForexClear Transaction details 

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

Such matters form part of the relationship between the FCM Clearing 

Members and that FCM Approved Trade Source System and the terms 

of such relationship may entitle the FCM Approved Trade Source 

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

from time to time.

FX FCMs must not submit instructions to the Clearing House for 

trades which will not meet the FCM ForexClear Eligibility Criteria. 

The Clearing House will process any FCM ForexClear Transaction 

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

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

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

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

approved by the relevant FCM Clearing Member. The Clearing House 

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

trade entered into by the relevant Executing Parties.

The Clearing House accepts no liability for any error within or 

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

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

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

the event that the Clearing House registers any FCM ForexClear 

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

FCM Approved Trade Source System and accepted by an FCM 

Clearing Member, the FCM Clearing Member concerned shall be 

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

ForexClear Contract is subsequently cancelled in accordance with 

FCM Regulation 49 (Cancellation of FCM ForexClear Contracts).

FCM Clearing Members shall ensure that transaction details accepted 

for registration are accepted by appropriately authorized personnel. 

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

and will not, verify the authorization of the source of any details of any 

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.
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2.2.8 Trade Validation and Registration

(a) Process flow description

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

submitted to it for registration as two FCM ForexClear 

Contracts or as one Non-FCM ForexClear Contract and one 

FCM ForexClear Contract (as applicable) presented by FXPs to 

ensure that each such trade meets the applicable (A) : (A) the 

applicable FCM ForexClear Product Eligibility Criteria and

Counterparty Technical Validation Check (as defined below),;

(BB) Incremental Risk Checks (as defined below); with respect 

to each FCM ForexClear Transaction, except a Sub-B lock 

Trading Venue Transaction and a Sub-25 NDF DTV 

Transaction, and (CC) Acceptance Validation Checks (as 

defined below), in each case, required for FCM ForexClear 

Transactionsand (D) Separate Risk Checks (as defined below) 

with respect to each FCM Sub-25 NDF DTV Transaction

(collectively, the “Validation Checks”).

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

ForexClear Transaction that passes the Validation Checks and 

is accepted for clearing by the Clearing House: 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 (as applicable).

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

(A) an FCM Trading Venue Transaction, the Clearing 

House will notify the FX FCMs, FCM Trading Venue 

and, if the originating FCM ForexClear Approved 

Trade Source System is different to the FCM Trading 

Venue, the originating FCM ForexClear Approved 

Trade Source System of registration or rejection of the 

FCM ForexClear Transaction ; and

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

House will notify the FX FCMs (via the originating 

FCM ForexClear Approved Trade Source System or 

ClearLink API) of registration or rejection of the FCM 

ForexClear Transaction,

in each case within the required timeframe under Applicable 

Law.

(iv) As provided in Section 2.2.7, in respect of messages confirming 

registration, the time of dispatch of such message shall be the 
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Registration Time of that FCM ForexClear Contract.

(v) 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.

(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) Checks

(vii)(i) “Counterparty Technical Validation Check.” The

counterparties to each FCM ForexClear Transaction trade 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 and (c) clearing the FCM 

ForexClear Transaction must be approved by the Clearing 

House to clear the relevant trade type (the “Counterparty

Technical Validation Check)”..

(viii) 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.

(ii)

(ix) Incremental Risk Checks

(iii) The Clearing House will apply:

(A) an “Incremental Risk Check” to each FCM 

ForexClear Transaction, except that is not a SubBlock Trading Venue Transaction and a FCM Sub-25 

NDF DTV 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. 
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(B) .a “Separate Risk Check” to each FCM Sub-25 NDF 

DTV Transaction. The Separate Risk Check is to 

determine whether, in relation to any FX FCM

clearing the FCM Sub-25 NDF DTV Transaction: 

(1) its available Margin (taking into account

ForexClear Tolerance and/or MER Buffer made 

available by the Clearing House, if any) 

compared with its Liabilities (excluding the new 

FCM Sub-25 NDF DTV Transaction) is 

sufficient, taking into account the Clearing 

House’s internal credit rating for such FX FCM;

(2) the Clearing House’s Risk Department has 

requested the Clearing House to reject such FCM 

Sub-25 NDF DTV Transaction;

(1)(3)such FX FCM, which is clearing such FCM Sub25 NDF DTV Transaction for a FCM Client, has 

requested the Clearing House to reject such FCM 

Sub-25 NDF DTV Transaction.

(x)(iv) Each relevant FX FCM must pass the Incremental Risk Check

and Separate Risk Check (in each case, if applicable) 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).

(xi)(v) If any relevant either (or both) FX FCM(s) fail(s) the 

Incremental Risk Check(s), or Separate Risk Check (in each 

case, if applicable), or the ForexClear Transaction is subject to 

Automatic Rejection pursuant to Section 2.2.8(d), then the 

FCM ForexClear Transaction will be rejected immediately and 

a notification sent in accordance with Section 2.2.8(a)(iiiiii).

(b)(c) FCM Acceptance

(i) 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 
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Applicable Law. In all other cases, no FCM Notification will be 

provided to any FX FCM.

(ii) In respect of an FCM ForexClear Transaction that is not an

FCM Trading Venue Transaction, following receipt of an FCM 

Notification, an FX FCM may choose to grant or refuse consent 

to register the ForexClear Transaction. It is a condition for 

registration of such an FCM ForexClear Transaction that an FX 

FCM grants a separate consent (each, an "FCM Acceptance") 

in respect of each FCM Notification received by it in relation to 

the registration of such FCM ForexClear Transaction. The 

Clearing House has an automated system that it operates on 

each business day for the purposes of rejecting FCM 

ForexClear Transactions presented for clearing, but in respect 

of which the relevant FX FCM did not provide an FCM 

Acceptance to the Clearing House prior to the LCH Cut-off 

Time. The "LCH Cut-off Time" in respect of an FCM 

ForexClear Transaction will be the expiry of the timeframe 

determined by the Clearing House. If an FX FCM has not 

provided the Clearing House of an FCM Acceptance by the 

LCH Cut-off Time, it will be deemed to have rejected the 

relevant FCM ForexClear Transaction. Any FCM Acceptance 

of an FCM ForexClear Transaction provided by an FX FCM to 

the Clearing House prior to the LCH Cut-off Time is 

irrevocable. Any FCM Acceptance provided by an FX FCM to 

the Clearing House after the LCH Cut-off Time shall be invalid.

(iii) In circumstances where the registration of an FCM ForexClear 

Transaction is conditional upon one or more FCM 

Acceptance(s) being notified by the applicable FX FCM(s), the 

relevant FCM ForexClear Transaction shall be deemed to have 

been "submitted" to the Clearing House by each such FX FCM 

at the time when it notifies the Clearing House of its FCM 

Acceptance. In all other circumstances, an FCM ForexClear 

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

applicable FX FCM upon being presented to the Clearing 

House for clearing by or on behalf of such FX FCM.

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

a hedging FCM ForexClear Transaction, which is:

(A) not an FCM Trading Venue Transaction, with a 

Hedging ForexClear Service Clearing Member for the 

purpose of Risk Neutralisation, and such FCM 

ForexClear Transaction is presented for clearing to the 

Clearing House, the Defaulting ForexClear Service 

Clearing Member shall be deemed to have received an 

FCM Notification, in respect of such FCM ForexClear 

Transaction, and to have notified an FCM Acceptance, 

in respect of such FCM ForexClear Transaction, to the 
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Clearing House before the relevant LCH Cut-off Time; 

and

(B) a FCM Trading Venue Transaction, with a Hedging 

ForexClear Service Clearing Member for the purpose 

of Risk Neutralisation, and such FCM ForexClear 

Transaction is presented for clearing to the Clearing 

House, the FCM Trading Venue on which such FCM 

ForexClear Transaction was executed shall be deemed 

to be an FCM Eligible Trading Venue, in respect of the 

Defaulting ForexClear Service Clearing Member, at 

the time of execution of such FCM ForexClear 

Transaction and such FCM ForexClear Transaction 

shall be deemed to be an FCM Eligible Trading Venue 

Transaction, in respect of the Defaulting ForexClear 

Service Clearing Member.

(v) The Clearing House will (where applicable) apply an

“Acceptance Validation Check” in respect of an FCM 

ForexClear Transaction presented for clearing that is not an 

FCM Trading Venue Transaction in order to ensure that the 

Clearing House has received all required FCM Acceptances, in 

accordance with this Section 2.2.8(d).

(d) Automatic rejection

(i) A FCM Designated Trading Venue may elect, in the manner 

and by the time determined by the Clearing House, that each 

FCM Over-25 NDF Transaction executed on such FCM 

Designated Trading Venue and presented to the Clearing House 

for registration as two FCM ForexClear Contracts (or one NonFCM ForexClear Contract and one FCM ForexClear Contract) 

is automatically rejected by the Clearing House (“Rejection 

Election”). If the Clearing House receives a Rejection Election 

from a FCM Designated Trading Venue (in the manner and by 

the time determined by the Clearing House), it will, on and 

from the time and date determined by it, reject each FCM Over25 NDF Transaction that is executed on such FCM Designated 

Trading Venue and presented to it for registration (“Automatic 

Rejection”).

(ii) If a FCM Designated Trading Venue has provided a Rejection 

Election to the Clearing House, but subsequently determines

that it no longer wishes FCM Over-25 NDF Transactions 

executed on such FCM Designated Trading Venue to be subject 

to Automatic Rejection, it may withdraw such Rejection 

Election by providing notice to Clearing House in the manner 

and by the time determined by the Clearing House, after which 

the Clearing House will, on and from the time and date 

determined by the Clearing House, cease to apply Automatic 

Rejection to FCM Over-25 NDF Transactions that are executed 
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on such FCM Designated Trading Venue and presented to the 

Clearing House for registration, and will, instead, accept or 

reject each such FCM Over-25 NDF Transaction in accordance 

with the Rulebook. 

(c)(e) Registration

(i) Once it is confirmed that an FCM ForexClear Transaction has 

passed the applicable Validation Checks for the relevant FX

FCMs, and the Clearing House has determined to the accept the 

FCM ForexClear Transaction for registration, the Clearing 

House:

(A) registers the FCM ForexClear Transaction as two FCM 

ForexClear Contracts (or one FCM ForexClear Contract 

and one Non-FCM ForexClear Contract, (as applicable) 

and changes the status for the FCM ForexClear 

Transaction to “NOVATED”; and

(B) acknowledges the FCM ForexClear Contract status and

sends a notification in accordance with Section 

2.2.8(a)(iii) that the FCM ForexClear Transaction is 

“NOVATED”.

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

a hedging FCM ForexClear Transaction with a Hedging 

ForexClear Service Clearing Member for the purpose of Risk 

Neutralisation, and such FCM 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 FCM ForexClear 

Transaction are deemed to have been passed and that

Automatic Rejection is deemed to not apply.

(d)(f) Trade Rejection

Trades presented for registration that do not meet the FCM ForexClear 

Product Eligibility Criteria or any other requirement for registration 

under the FCM Rulebook, or that are subject to Automatic Rejection,

including a trade:

(i) (i) presented by or on behalf of an FX FCM ForexClear 

Clearing Member i in respect of a third party Executing Party 

where such trade was executed on an FCM Trading Venue that 

was not at the time of execution of such trade an FCM Eligible 

Trading Venue in respect of such FX FCM ForexClear 

Clearing Member;,

(ii) (ii) presented by or on behalf of an FX FCM ForexClear 

Clearing Member that was executed on a trading venue or 

facility that had not at the time of the execution of such trade 
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been approved by the Clearing House as an FCM Trading 

Venue;

(iii) (iii) that contains invalid or incomplete message data; and, or

(iv) (iv) that is not a Sub-Block Trading Venue Transaction and 

with respect to which the Clearing House has not received 

sufficient Margin (taking into account MER Buffer and/or 

ForexClear Tolerance, if any),

will, in each case, be rejected.

If an FCM ForexClear Transaction is presented to the Clearing House 

for registration and rejected, such FCM ForexClear Transaction may 

be re-presented for registration in the form of a new FCM ForexClear

Transaction but with the same economic terms in accordance with, and 

subject to, the FCM Rulebook and Applicable Law, and such FCM 

ForexClear Transaction will, for the purposes of the FCM Rulebook 

and upon such re-presentation, constitute a new FCM ForexClear

Transaction.

(e)(g) Manual Trade Rejection, Novation and Cancellation (Exceptional 

Event)

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 an FCM ForexClear Transaction, or (iii) accept or reject a 

cancellation request for an FCM ForexClear Contract or an FCM 

ForexClear Transaction, in each case, manually prior to a Margin Run 

(e.g. in the case of a Default, when an FCM ForexClear Transaction 

needs to be registered immediately to expedite the hedging and auction 

process or to reject an FCM ForexClear Transaction received from an

FX FCM which is a Defaulter).

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 

2.2.8(a)(iii) of such rejection or registration (as applicable); and

(ii) in respect of trades being manually cancelled, by sending a 

message to the FCM Approved Trade Source System that it is 

“CANCELLED”.

(f)(h) Trade Cancellation

The Clearing House accepts cancellation messages from Executing 

Parties against both FCM non-novated trades (FCM ForexClear 

Transactions) (other than FCM Sub-25 NDF DTV Transactions) and

and novated trades (FCM ForexClear Contracts )(other than FCM 

ForexClear Contracts arising from the clearing of FCM Sub-25 NDF 

DTV Transactions).
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With respect to any FCM ForexClear Contract, cancellation messages 

may be submitted via the FCM Approved Trade Source System until 

(i) such FCM ForexClear Contract is “fixed” (i.e., when its Settlement 

Rate has been determined on the relevant Valuation Date), or (ii) the 

end of the day on the Business Day preceding the relevant Expiration 

Date of the FCM ForexClear Contract, as applicable.

A successful cancellation message results in a “CANCELLED” status 

message if the FCM ForexClear Transaction or the FCM ForexClear 

Contract (as the case may be) is cancelled during the Opening Hours. 

The status messages are sent from the Clearing House to the FX FCM 

via the FCM Approved Trade Source System.

(g)(i) Process flow description

The Clearing House accepts trade cancellation instructions from the 

FCM Approved Trade Source System for FCM ForexClear 

Transactions (other than FCM Sub-25 NDF DTV Transactions) or 

FCM ForexClear Contracts (other than FCM ForexClear Contracts 

arising from the clearing of FCM Sub-25 NDF DTV Transactionsas), 

as the case may be,) that have previously been submitted to the FCM 

ForexClear Service. Cancellation instructions must include the 

ForexClear ID.

The Clearing House checks that the cancellation instruction contains a 

valid ForexClear ID which relates to: (a) an FCM ForexClear 

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

not been previously cancelled; and (b) in the case of an FCM 

ForexClear NDF Contract , an FCM ForexClear NDF Contract with 

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

Where a trade has already been rejected (as a result of having failed a 

Counterparty Technical Validation Check), the FCM ForexClear 

Service sends a “CANCEL REJECTED” message to the FCM 

Approved Trade Source System for the relevant FXPs.

All trade cancellation instructions must pass the Incremental Risk 

Check. If an FX FCM does not have sufficient Margin for its 

Liabilities or estimated Liabilities (taking into account MER Buffer 

and/or ForexClear Tolerance, if any) at the time of the relevant 

Incremental Risk Check, then a 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 FX FCM's Liabilities) will 

always pass the Incremental Risk Check, even if the FX FCM does not 

have sufficient Margin for its Liabilities.

(h)(j) Trade Amendment

No amendment of the financial terms of an FCM ForexClear 

Transaction or FCM ForexClear Contract is permitted. FX FCMs who 
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wish to change the FCM Client information on a ForexClear

Transaction should contact ForexClear Business Operations at 0207 

426 3729 for further information.

(i)(k) 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 FCM

ForexClear Contract.

On the Valuation Date with respect to each FCM ForexClear Contract, 

the Settlement Rate will be retrieved as set forth in the relevant FCM 

ForexClear Contract Terms. The Market Data provider for Settlement 

Rates is Reuters.

The FCM ForexClear Service applies the relevant Settlement Rate to 

FCM ForexClear Contracts using the:

(i) Settlement Rate Option source code; and

(ii) Valuation Date.

The Clearing House applies the Settlement Rate to all relevant FCM 

ForexClear Contracts at a predefined time following its publication or 

as otherwise provided for in the relevant FCM ForexClear Contract 

Terms.

The Clearing House calculates the Settlement Currency Amount in the 

Settlement Currency per FCM ForexClear Contract. FX FCMs can 

retrieve the Settlement Rate and Settlement Currency Amount in the 

Settlement Currency via ForexClear Reporting on the ForexClear 

Service Portal and on MemWeb, which are internet services onto 

which information is loaded and can be accessed by FX FCMs.

(j)(l) FX Package Transactions

In certain circumstances an FCM Approved Trade Source System may 

present to the Clearing House, in a single submission, a group of two 

or more FCM ForexClear Transactions for simultaneous registration 

(such group of FCM ForexClear Transactions, an “FX Package 

Transaction”). An FX 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 FX Package Transaction is not 

presented in the prescribed format, each constituent FCM ForexClear 

Transaction within the FX Package Transaction will be rejected.

Where the Clearing House receives an FX Package Transaction for 

registration it shall treat each FCM ForexClear Transaction that forms 

part of the FX Package Transaction as a new FCM ForexClear 

Transaction in accordance with the FCM Rulebook and, where each 

constituent FCM ForexClear Transaction within the FX Package 

Transaction meets the registration requirements as set out in the FCM 
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Rulebook (including the provision of sufficient Margin, where 

applicable), the Clearing House will simultaneously register all of the 

FCM ForexClear Transactions within that FX Package Transaction. 

Where one or more of the constituent FCM ForexClear Transactions 

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

the constituent FCM ForexClear Transactions of the FX Package 

Transaction shall be rejected.

Where a constituent FCM ForexClear Transaction of a Package 

Transaction is an FCM Eligible Trading Venue Transaction, it is a 

condition of registration that all of the constituent FCM ForexClear

Transactions of such Package Transaction be FCM Eligible Trading 

Venue Transactions. Where such condition is not met, all constituent 

FCM ForexClear Transactions of the Package Transaction will be 

rejected. In respect of a Package Transaction comprising FCM 

ForexClear Transactions that are not executed on an FCM Trading 

Venue, the Clearing House will send an FCM Notification to the 

relevant FCM Clearing Member(s) for the acceptance of each such 

constituent FCM ForexClear Transaction.

In respect of an FX Package Transaction presented in an FX FCM’s 

name, such FX FCM’s Margin requirement and other Required 

Registration Amounts will be assessed on a net basis based on all of 

the constituent FCM ForexClear Transactions of such FX Package 

Transaction. 

The Clearing House may limit the number of FCM ForexClear 

Transactions that may be included in an FX Package Transaction by 

way of member circular.

(k)(m) Valuation Date Event Management: Process flow description

After the Registration Time for an FCM ForexClear Contract, the FCM 

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.

On the Valuation Date, the Clearing House uses the Settlement Rate 

for the Currency Pair for the FCM ForexClear Contract when it is 

published by Reuters, and calculates the Settlement Currency Amount 

for each FCM ForexClear 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. 

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 Contract 

Template, as applicable. Notwithstanding the foregoing, in the event
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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.

(l)(n) Settlement

With respect to each FCM ForexClear Contract, the Clearing House 

calculates a Settlement Currency Amount by applying of the Settlement 

Rate to the Notional Amount in accordance with the applicable FCM 

ForexClear Contract.

With respect to each FCM ForexClear Contract, on the Business Day 

immediately preceding the Settlement Date, the Clearing House nets

the Settlement Currency Amount against the Cumulative Variation 

Settlement of the FCM ForexClear Contract, the remainder after which 

is the Net Settlement Amount (“NSA”), which will be reflected in the 

FX FCMs' cash accounts with the Clearing House on the Settlement 

Date. As such, with respect to each FCM ForexClear Contract, the 

payment in full of all the Variation Settlement required during the term 

of such FCM ForexClear Contract shall satisfy the relevant party's 

obligation to pay the Settlement Currency Amount on the Settlement 

Date of such FCM ForexClear Contract. For the purpose of providing 

Nostro reconciliation, to the relevant parties, the Clearing House will 

provide Reporting (as below) which will reflect an entry for the 

“Settlement Currency Amount” and a separate entry for the 

Cumulative Variation Settlement of the FCM ForexClear Contract. 

This paragraph applies even if the Settlement Date was adjusted in 

accordance with the relevant FCM ForexClear Contract Terms.

(m)(o) Premiums

Premiums on FCM ForexClear NDO Contracts shall be paid on the spot 

date or Settlement Date in an eligible currency for the given Currency Pair 

(such currency(ies) to be determined by the Clearing House from time to 

time, and notified to FX CCMs).

(n)(p) Reference Data

Holiday Event Calendar:

The FCM ForexClear Service uses the SwapsMonitor Financial 

Calendar (as published by Swaps Monitor Publications, Inc.) 

(“SwapsMonitor Financial Calendar”) in order to determine 

holidays. All FCM ForexClear Participants must be licensees of the 

SwapsMonitor Financial Calendar. 

If a change is declared that affects the SwapsMonitor Financial 

Calendar that is referenced on FCM ForexClear, then a corresponding 

calendar adjustment will be made to the FCM ForexClear system, 

unless the Clearing House informs FXCCMs by notice on its website 

(at https://www.lch.com/services/forexclear, or such other web page as 
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the Clearing House determines) that the relevant change will not apply 

to FCM ForexClear Contracts.

The Clearing House may temporarily close the FCM ForexClear 

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

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

duration of such closure.

Date Adjustment:

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

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

ForexClear Contracts will automatically be adjusted in accordance 

with the provisions of the Relevant EMTA Template, relevant LCH 

Non-EMTA Contract Template or ISDA definitions as applicable.

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

the Clearing Member Reporting as to any FCM ForexClear Contracts 

affected and the date adjustments made.

2.2.9 Risk Status

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

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

and may:

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

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

additional Collateral (equal to the value determined by the 

Clearing House) to the Clearing House; and

(ii) notify each FCM Designated Trading Venue of such 

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

time determined by the Clearing House. 

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

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

the LCH Group shall have any liability whatsoever to any FX FCM or 

any other person in contract, tort (including, without limitation, 

negligence), trust, as a fiduciary or under any other cause of action in 

respect of any damage, loss, cost or expense of whatsoever nature 

suffered or incurred in connection with:

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

ceased to be, subject to Risk Status; 

(ii) any delay in notifying, or failure to notify, a FCM Designated 

Trading Venue of the Clearing House’s determination that an FX

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

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

of the information in Section 2.2.9(b)(i), or its delaying in 
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transmitting, or failure to transmit, such information to any 

person. 

2.2.92.2.10 Market Data

(a) Sources used by FCM ForexClear Service

The FCM ForexClear Service collates instrument quotes for the 

following from multiple market sources (as detailed in 

Section 2.2.10(b)) in relation to each Currency Pair:

(i) FX spot rates (“FX Spot Rates”);

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

(iii) Settlement Rate Option;

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

Rate Curves”);

(v) Price Alignment Amount rates (“Price Alignment Amount

Rates”); and

(vi) Country credit spreads (see Section 2.2.10(f) below) (“Country 

Credit Spreads”),

together, “Market Data”.

FX Spot Rates and FX Swap Points are received by the Clearing House 

via a live link from all eligible FXCCMs (including FX FCMs) during 

the Opening Hours.

(b) Market Data Sources and Frequencies

The Clearing House receives the following updated raw prices:

FX Spot Rates:

(i) Source – FXCCMs.

(ii) Frequency - every time updated by FXCCMs up to a 

maximum rate of once every five minutes.

FX Swap Points:

(i) Source - all FXCCMs.

(ii) Frequency - every time updated by FXCCMs up to a 

maximum rate of once every five minutes.

(iii) Tenors – as shown in the table below.
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Tenor

O/N

T/N

S/N

1 week

1 month

2 months

3 months

6 months

9 months

12 months

24 months

36 months 

48 months 

60 months 

Settlement Rate Options:

(i) Source - Reuters.

(ii) Frequency - when published (as referenced in the Relevant 

ETMA Template or given LCH Non-EMTA Contract 

Template, as applicable).

Interest Rate Curves:

(i) Source - internal Clearing House

(ii) Frequency - at each SwapClear margin run.

Country Credit Spreads:

(i) Source - Bloomberg.

(ii) Frequency - when published.

USD secured overnight financing rate curve:

(i) Source - SwapClear.

(ii) Frequency - at each SwapClear margin run.

Price Alignment Amount rates:

(i) Source - LCH Treasury.

(ii) Frequency - Daily.

(c) [Not Used]
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(d) Market Data Provision to FX FCMs

Market Data used in a Margin Run is made available to FX FCMs via 

ForexClear Reporting (as defined in Section 2.2.25).

(e) Curve Building in ForexClear

FX Curve (Zero Coupon/Market Rate Curve):

The Clearing House builds for each Currency Pair an FX curve (zero 

coupon/market rate curve) using the FX Spot Rates, FX Swap Points 

and the USD secured overnight financing rate curve based on 

interpolation techniques agreed through the ForexClear Risk & 

Trading Working Group (a group comprising the Clearing House's and 

FXCCM's (including FX FCM) risk and trading representatives) 

(“RTWG”). The USD secured overnight financing rate curve is used 

for discounting; the FX curve is used for capitalization of forward cash 

flows.

Interest Rate Curve:

The Clearing House applies the linear interpolation method to build the 

Interest Rate Curve. Linear interpolation is applied on zero coupon 

curves.

Curve Use:

End of day is defined as 22.00 hours, London time (“EOD”). The 

following EOD data is used in the calculation of risk analytics for an 

EOD Margin Run (as defined in Section 2.2.17(b)):

(i) FX Spot Rates; and

(ii) FX Swap Points.

(f) Country Credit Spreads

The Clearing House takes country credit spreads (in relation to Brazil, 

Russia, India, China, Chile, South Korea, Colombia, Indonesia, 

Malaysia, Philippines and Taiwan) from Bloomberg for use in risk 

multiplier calculations.

2.2.102.2.11 FCM ForexClear Contract Valuation

(a) Net Present Value (“NPV”)

From (and including) the Registration Time to the EOD Margin Run

on the business day preceding the Valuation Date, each FCM 

ForexClear Contract is valued in USD using the current market rates 

and discounted from the future Settlement Date to its present value.
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On the Valuation Date, the Settlement Rate is used to value the FCM 

ForexClear Contract.

If Valuation Postponement applies, the FCM ForexClear Contract is 

valued using the current forward price to (and including) the date on 

which the Settlement Rate is determined in accordance with the FCM 

ForexClear Contract Terms.

In the event a Settlement Rate or market rate is unavailable, as

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

House will determine an alternative Settlement Rate or market rate.

(b) Variation Settlement (“VS”)

VS for each FCM ForexClear Contract is calculated at EOD as the 

change from the preceding business day in its NPV. With respect to 

each FX FCM, the net sum of the VS for all open FCM ForexClear 

Contracts is, subject to the netting provisions of FCM Regulation 47,

credited to or debited from such FX FCM once a day, following the 

EOD Margin Run.

VS will, subject to the netting provisions of FCM Regulation 47, be 

paid each business day by or to each FX FCM in respect of all of its 

open FCM ForexClear Contracts. The VS will be calculated in, and 

must be paid in, USD.

With respect to each FCM ForexClear Contract, VS is calculated every 

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

including) the EOD on the business day immediately preceding the 

Settlement Date.

Separate Variation Settlement calculations are performed in respect of 

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

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

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

make or receive a separate Variation Settlement payment with respect 

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

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

(c) Reporting Breakdown

ForexClear margin reports show the portfolio of open FCM ForexClear 

Contracts of each FX FCM by Currency Pairs and in the Settlement 

Currency (i.e., USD).

(d) Price Alignment Amount

The effect of daily cash VS movements results in the need for Price 

Alignment Amounts. Without this adjustment, the pricing of FCM 

ForexClear Contracts would differ from identical uncleared trades, as 

cash earned from favorable daily price moves would be priced into the 

product.
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(e) Price Alignment Amounts Calculation Methodology

Price Alignment Amounts are calculated at EOD on each business day

from (and including) the first business day after the Trade Date to (and 

including) the business day immediately preceding the Settlement 

Date.

In this Section 2.2.11(e), “T” means any given business day; “T-1” 

means the business day immediately preceding T; “T+1” means the 

business day immediately following T; and “Cumulative Variation 

Settlement” or “CVS” means, in respect of a Swap Product, a value 

equal to the aggregate of the amounts of Variation Settlement that have 

become owing from the FCM Clearing Member to the Clearing House 

in respect of such Swap Product minus the aggregate of the amounts of 

Variation Settlement that have become owing from the Clearing House 

to the FCM Clearing Member in respect of such Swap Product;

provided that any such amounts shall only be counted to the extent the 

FCM Clearing Member or Clearing House, as applicable, has 

discharged its obligation to transfer such amounts in accordance with 

FCM Regulation 47. The Clearing House calculates Price Alignment 

Amounts in USD once a day at EOD.

Principles:

(i) CVS is calculated at EOD on T-1.

(ii) Variation Settlement in respect of an FX FCM's portfolio of 

open ForexClear Contracts) is paid/ received, subject to the 

netting provisions of FCM Regulation 47, on the morning of T.

(iii) The Price Alignment Amount Rate for T to be applied is known 

at EOD T.

(iv) The Price Alignment Amount is calculated on the night of T, 

for CVS of T-1 for FCM ForexClear Contracts up to the 

business day before their Settlement Date.

(v) The Price Alignment Amount is paid or received on morning of 

T+1 via PPS.

Components:

(vi) Price Alignment Amount Rate.

(vii) Cumulative Variation Settlement of the FX FCM’s portfolio

open FCM ForexClear Contracts.

(viii) Accrual Factor (factor used to convert the Price Alignment 

Amount Rate from an annual rate to a daily rate, on a basis of a 

year of 360 days).
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So:

(ix) Price Alignment Amount T = Price Alignment Amount T Rate 

x CVS T--1 x Accrual Factor.

The Clearing House uses the Price Alignment Amount Rate from the 

relevant EOD overnight index swap curves, which is sourced from the 

Clearing House.

2.2.112.2.12 Initial Margin (“IM”)

The Clearing House will require FX FCMs to furnish it with IM. This amount 

will be calculated intraday and at EOD on each business day as part of each 

Margin Run. Each FX FCM’s IM requirement, is calculated for the portfolio of 

open FCM ForexClear Contracts and FCM ForexClear Transactions using 

ForexClear's Portfolio Analysis and Risk (“FxPAR”) margining model. 

FxPAR is based on a modified filtered historical simulation value-at-risk 

methodology. All open FCM ForexClear Contracts and FCM ForexClear 

Transactions in each Currency Pair are re-valued under a series of cross 

portfolio yield curve scenarios to estimate the potential portfolio profit and 

loss and therefore the IM requirement.

These scenarios will be continually monitored and reviewed periodically or on 

an ad hoc basis according to market conditions. FX FCMs will usually be

notified by the Clearing House of alterations to margin parameters no later 

than the day before calls are made based on the new parameters. Further 

details of this method are available upon request from the ForexClear Risk 

team.

FxPAR uses the historical (5 year) data submitted by FXCCMs pursuant to 

Section 2.2.9, which is adapted to current market prices.

Separate Initial Margin calculations are performed for an FX FCM's house 

“H” and client “C” accounts and, within a “C” account, separately in respect 

of each FCM Client Sub-Account therein. No offset between the “C” and “H” 

accounts is permitted.

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

from a specific FX FCM or from all FX FCMs in accordance with FCM 

Regulation 14 (Margin and Collateral).

(a) Credit Risk Multiplier (“CRiM”)

The CRiM applied will consider the FX FCM's credit worthiness, 

Initial Margin level and/or stress testing exposures in accordance with 

LCH Credit Risk Policy.

(b) Liquidity Risk Multiplier (“LRMM”)

Where an FXCCM has an exposure above set thresholds in a particular 

Currency Pair or tenor of FCM ForexClear Contracts, the LRMM is 

applied and additional IM is charged. The LRMM is calculated in 
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accordance with parameters set by the ForexClear Default 

Management Group (the “FXDMG”) according to tenor and notional 

concentration. The thresholds are reviewed quarterly and use 

prevailing perceptions of market conditions as seen by the FXDMG.

LRMM increases IM called due to concentrated Currency Pair 

exposure by tenor of FCM ForexClear Contracts. Additional IM is 

called to mitigate the risk of a position not being closed out in seven 

days and/or the extra hedging costs that may be incurred.

The Clearing House calculates and applies LRMM as part of each 

Margin Run, based on the IM for each Currency Pair in the FX FCM's 

house position-keeping account.

(c) Sovereign Risk Multiplier (“SRM”)

SRM reflects the additional risk related to a potential country default or a 

change in a country's currency regime, including risk relating to a 

country’s external debt or level of foreign exchange reserves, which 

would impact FCM ForexClear Contracts transacted in certain Reference 

Currencies. The SRM calculation considers the probability of sovereign 

default occurring and the depreciation or appreciation risk of the 

Reference Currencies

(d) Default Fund Additional Margin

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

transfer Collateral to the Clearing House to meet the default fund 

additional margin requirement as determined and notified by the 

Clearing House to such FX FCM (“DFAM”). The methodology by 

which the Clearing House determines DFAM is available on the secure 

area of the Clearing House website. The Clearing House will record 

any Collateral an FX FCM has provided to meet its DFAM obligation

to the FX FCM’s Proprietary Account.

2.2.122.2.13 Additional Margin, ForexClear Tolerance, MER Buffer, Completion 

Margin and Intraday Margin Calls

(a) Additional Margin

The Clearing House may require an FX FCM to furnish additional 

amounts of Margin (in addition to Initial Margin) as security for the 

performance by an FX FCM of its obligations to the Clearing House in 

respect of FCM ForexClear Contracts to which such FX FCM is a 

party in accordance with FCM Regulation 14 (Margin and Collateral). 

This may be required from time to time where, in the opinion of the 

Clearing House, the risk inherent in FCM ForexClear Contracts to 

which such FX FCM is a party is not adequately covered by Initial 

Margin. This may cover instances where stress testing losses under 

various scenarios provided in the ForexClear Default Fund Supplement 

have increased.
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(b) Minimum Excess Requirement Buffer (“MER Buffer”)

To facilitate the intraday registration of FCM ForexClear Contracts, at 

each EOD Margin Run, the Clearing House will call from each FX 

FCM, separately in respect of its Proprietary Account and each of its 

FCM Client Sub-Accounts, an amount of IM in respect of its and its 

FCM Clients' potential intraday Liabilities (as defined below in Section 

2.2.18) for the following day (“MER Buffer”), provided that the 

Clearing House shall not call MER Buffer from an FX FCM that (i) 

opted-in to ForexClear Tolerance in accordance with paragraph (c) 

below and (ii) opted-out of MER Buffer (the form and manner of such

“opt-out” notice shall be prescribed by the Clearing House from time 

to time). MER Buffer is part of the FX FCM's Required Margin. An 

FCM's MER Buffer is calculated in respect of an FCM's Proprietary 

Account and each of its FCM Client Sub-Accounts, and Margin 

furnished in respect of MER Buffer is credited to each account (as 

applicable) as IM. Notwithstanding the foregoing, for purposes of 

calculating a given FCM’s MER Buffer, the Clearing House may from 

time to time, and in its sole discretion, exclude an FX FCM’s given 

FCM ForexClear Suspension Sub-Accounts from such calculation.

The required amount of MER Buffer for each applicable account of an 

FX FCM is expressed as a percentage of start-of-day portfolio IM for 

such account. The MER Buffer for each account is calibrated daily 

based on recent activity within the relevant account such that higher 

levels of intraday trade volumes lead to a proportionally higher MER 

Buffer requirement and vice versa. The MER Buffer percentage is 

calculated as a given percentile of intraday peak relative IM changes 

over a given number of historical business days.

The parameters of MER Buffer are: MER percentile, MER look-back 

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

parameters are calibrated based on the quantitative analysis of the FX 

FCM's IM history across the ForexClear Service.

As FCM ForexClear Contracts are registered in an FX FCM's relevant 

accounts, the Clearing House will, in accordance with the Margin Run 

process, calculate the FX FCM's intraday Liabilities (or, in the case of 

an Incremental Risk Check, the FX FCM's estimated Liabilities), 

taking into account any IM posted as MER Buffer in the applicable

account.

At each EOD Margin Run, the Clearing House will recalculate and call 

the FCM's Required Margin, which includes MER Buffer for all 

accounts.

(c) ForexClear Tolerance

In order to facilitate the registration of FCM ForexClear Contracts by 

FX FCMs, the Clearing House may, in its sole discretion, provide FX 

FCMs with temporary “tolerance” in the form of initial margin 
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forbearance (“ForexClear Tolerance”). In the event an FX FCM 

wishes to utilize ForexClear Tolerance, it must provide notice to the 

Clearing House (the form and manner of such notice shall be 

prescribed by the Clearing House from time to time). FX FCMs who 

are approved to utilize ForexClear Tolerance may choose not to utilize 

MER Buffer in connection with the registration of FCM ForexClear 

Contracts (for the avoidance of doubt, the utilization of MER Buffer is 

compulsory for FX FCMs that do not opt-in to ForexClear Tolerance). 

The Clearing House may apply ForexClear Tolerance between Margin 

Runs in an amount equal to the value of the Collateral that would have 

been required to be transferred by the FX FCM to the Clearing House 

to cover the relevant Liabilities (or estimated Liabilities) to facilitate 

the registration of FCM ForexClear Contracts. For the avoidance of 

doubt, ForexClear Tolerance is provided in the form of temporary 

initial margin forbearance and an FX FCM’s utilization of ForexClear 

Tolerance does not give rise to any payment or transfer of Collateral by 

the Clearing House or result in any use of default fund resources 

(except following a Default).

The Clearing House will determine, in its sole discretion, the

maximum value of the ForexClear Tolerance (which may be zero) that 

it will make available to an FX FCM from time to time ("ForexClear 

Tolerance Limit"). The Clearing House will notify each FX FCM of 

its ForexClear Tolerance Limit and will, as soon as reasonably 

practicable, notify an FX FCM following any adjustment to the amount 

of its ForexClear Tolerance Limit. Except where the Clearing House 

exercises its right to reduce an FX FCM’s ForexClear Tolerance Limit 

in accordance with the foregoing, each FXCCM utilizing ForexClear 

Tolerance shall have an equal ForexClear Tolerance Limit. 

The Clearing House may require an FX FCM to transfer Collateral to 

the Clearing House in respect of any utilization of ForexClear 

Tolerance at any time and without prior notice to the FX FCM. 

Without limiting the foregoing, the Clearing House will call for 

Collateral to replenish the ForexClear Tolerance utilized by an FX 

FCM at (i) the last ITD/Ad-hoc Day Margin Run and EOD Margin 

Run of each Business Day and (ii) in the event an FX FCM utilizes at 

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

next relevant ITD/Ad-hoc Day Margin Run. Any failure of an FX 

FCM to satisfy a call for Collateral relating to ForexClear Tolerance 

may give rise to a Default by such FX FCM.

The Clearing House will not apply ForexClear Tolerance for FCM 

ForexClear Contracts with a Trade Date earlier than the previous 

Business Day.

(d) Completion Margin

The Clearing House shall calculate and call each FX FCM for

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

an FX FCM’s initial margin obligations due to position changes

resulting from next-day fixing. Completion margin is calculated as the

incremental difference between an FX FCM’s aggregate initial margin

obligations on its FCM ForexClear Contracts and its initial margin

obligations in relation to FCM ForexClear Contracts due to fix the next

Business Day.

(e) Intra-day Margin Calls

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

Clearing House is entitled to make additional margin calls for 

furnishing of Margin on the same day (intra-day margin calls) where it 

is considered necessary. Intra-day margin calls may be called at any 

time throughout the business day (08:30 to 21:00 hours, London time). 

Intra-day margin calls will usually be made via the Protected Payments 

System (PPS) (see Section 2.2.26(c)).

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

for additional Margin after the UK PPS cut-off time of 08:00 hours

(New York time). In this event, the Clearing House will require 

payment of additional funds through PPS facilities in the USA (see 

Section 3.2). Members must ensure, in these circumstances, that they 

are in a position to fund such calls through their nominated US PPS 

account within one hour of the call.

2.2.132.2.14 Initial Margin Management Events Service (“IMMES”)

IMMES aims to find risk and IM reducing FCM ForexClear Contracts and 

ForexClear Contracts among participating FXCCMs. IMMES can be run on 

all Currency Pairs that are cleared through the FCM ForexClear Service, 

although the primary focus will be on those Currency Pairs that contribute to

the largest IM requirement. IMMES is available in respect of an FX FCM's 

house account only.

FX FCMs who wish to obtain further information about, or to participate in, 

IMMES should contact ForexClear Business Operations at 0207 426 7527. To 

be eligible to participate in IMMES, an FX FCM must enter into an IMMES 

agreement with the Clearing House (the “IMMES Agreement”).

(a) Step-by-step details

The Clearing House usually conducts the IMMES at least monthly.

A reminder that there is an IMMES run taking place is sent out the 

week before to each FXCCM which is a party to an IMMES 

Agreement with LCH and each FXCCM is asked to confirm their 

participation.

On the day of the scheduled IMMES run, the Clearing House analyses 

all participating FXCCMs' profiles to find FCM ForexClear Contracts 
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and ForexClear Contracts with equivalent and opposite delta values by 

tenor and Currency Pair to compile a list of offsetting suggested trades 

that are mutually beneficial in terms of IM reduction (the “IMMES 

Trades”).

The Clearing House then analyses the relevant FX FCM's FCM 

ForexClear Contract portfolios with the IMMES Trades and 

determines the change in NPV, IM, delta and zero yield sensitivity 

from the IMMES Trades.

The FXCCMs on either side of the trades are advised of the economic 

details of the IMMES Trades.

If the two FXCCMs agree to undertake the IMMES Trades, the 

Clearing House will then put them in touch with each other. The 

FXCCMs will enter into the bilateral IMMES Trades and submit them 

to the Clearing House through the FCM Approved Trade Source 

System for registration.

2.2.142.2.15 Intra-Day Margin Call: Collateral Management

(a) General – Intra-day Margining

Following an intra-day margin call (except as notified otherwise by an 

FX FCM at the time of an intra-day margin call), the Clearing House 

will deduct cash, in the appropriate currency, directly from the relevant 

FX FCMs PPS account to cover that intra-day margin call.

Cash payments in respect of intra-day Margin are accepted only in 

USD by the Clearing House.

Each FCM Clearing Member must ensure that it has sufficient cash 

funds in place with their PPS bank(s) in order to avoid any intra-day 

liquidity issues.

2.2.152.2.16 General Margining Process

A “Margin Run” is the process by which the Clearing House calculates an 

FX FCM's Initial Margin requirement (if any) and, during an EOD Margin 

Run, its Variation Settlement and Price Alignment Amount requirements

(together, its “Transfer Requirements”) and applies that FX FCM's Margin 

to satisfy the Transfer Requirements for that FX FCM in respect of the FCM

ForexClear Contracts within that FX FCM's portfolio.

2.2.162.2.17 Types of Margin Runs

There are three types of Margin Run:

(a) ITD / Ad Hoc – Day Margin Run

ITD/Ad-hoc London daytime Margin Runs are initiated as and when 

dictated by the schedule published by the Clearing House and notified 
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to FX FCMs from time to time (the “Schedule”) or as necessary, and 

are performed in the time period during which a PPS call can be made 

(the “ITD/Ad-hoc Day Margin Run”), which PPS time period is 

available from the Clearing House on request. 

ITD/Ad-hoc Margin Runs are calls in respect of Initial Margin only. 

Variation Settlement and Price Alignment Amounts are not included in 

ITD/Ad-hoc Margin Runs.

(b) EOD Margin Run

The EOD Margin Run is the final ITD/Ad-hoc Day Margin Run that 

completes by 24:00 hours, London time, on that business day (the 

“EOD Margin Run”).

EOD Margin Runs are calls in respect of Initial Margin as well as 

Variation Settlement, NSA and Price Alignment Amounts.

(c) ITD / Ad Hoc - Night Margin Run

ITD/Ad-hoc London overnight Margin Runs are initiated as and when 

dictated by the Schedule or as necessary, and are performed in the time 

period during which a PPS call cannot be made (the “ITD/Ad-hoc 

Night Margin Run”).

ITD/Ad-hoc Night Margin Runs are calls in respect of Initial Margin 

only. Amounts that are anticipated to be owed in respect of Variation 

Settlement, NSA and Price Alignment Amounts may be considered in 

the determination of the amount of Initial Margin called in such

ITD/Ad-hoc Night Margin Run.

2.2.172.2.18 Margin Run Process

Margin Runs cover all registered FCM ForexClear Contracts with the status 

“NOVATED”.

Margin runs will be carried out for each FCM ForexClear Contract and FCM 

ForexClear Transaction (as the case maybe) until (and including) the later of:

(a) EOD Margin Run on the Settlement Date; or

(b) EOD Margin Run after the Settlement Rate is published.

During every Margin Run the Clearing House calculates the Initial Margin 

required and (where applicable) the Variation Settlement and Price Alignment 

Amounts required to cover each FX FCM's relevant open FCM ForexClear 

Contracts and FCM ForexClear Transactions (each a “Liability” and together 

the “Liabilities”).

Each FX FCM's Liability is offset against that FX FCM's non-cash Collateral 

account (being a sub-account of the FX FCM's financial account) (for IM 

only) or funds in that FX FCM's cash account (being a sub-account of the FX 
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FCM's financial account) (for VS/Price Alignment Amounts/IM). Initial 

Margin will always be a Liability (payable to the Clearing House) and 

Variation Settlement, NSA and Price Alignment Amounts may be a cash 

posting or a Liability (payable by, or to, the Clearing House, respectively).

FX FCMs are informed via email of their Liabilities as a percentage of their 

current total cover (such percentage being shown as a percentage of the 

aggregate cover in their cash and non-cash Collateral account(s)) and are 

directed to the ForexClear Services portal (being a secure website made 

available to FXCCMs) (the “ForexClear Service Portal”) which provides 

reports (at the times specified in Section 2.2.24) informing FX FCMs of their 

(i) total Liabilities under the FCM ForexClear Service; (ii) current total cover 

posted with the Clearing House for the FCM ForexClear Service (including 

MER Buffer and/or ForexClear Tolerance, if any); and (iii) Liabilities as a 

percentage of their current total cover (such percentage being shown as a 

percentage of the aggregate cover in their cash and non-cash Collateral 

account(s)).

If following a Margin Run an FX FCM is required to provide additional 

Collateral or funds, this is also indicated by email and via the ForexClear 

Service Portal. In the case of ITD/Ad-hoc Margin Runs, where an FX FCM's 

Liabilities exceed its available cover and any MER Buffer and/or ForexClear 

Tolerance, then the Clearing House will issue a margin call for the amount of 

the shortfall plus 50 per cent. of the FX FCM's MER Buffer amount.

2.2.182.2.19 Compression

(a) An FCM Clearing Member may compress Eligible FCM ForexClear

Compression Contracts in accordance with FCM Regulation 49(o) 

and this Section 2.2.19. There are two options available to an FCM

Clearing Member that wishes to compress Eligible FCM ForexClear

Compression Contracts:

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

ForexClear Compression Contracts entered into (i) on behalf of

a designated FCM Client and in respect of a particular FCM

Client Sub-Account (including an FCM ForexClear Suspension 

Sub-Account), or (ii) on such FCM Clearing Member's own

behalf, be considered for compression by the Clearing House.

Such a request shall be reconsidered by the Clearing House 

automatically each day (and the results notified to the FCM

Clearing Member after the applicable scheduled compression

run) until the FCM Clearing Member notifies the Clearing

House to discontinue the compression of Eligible FCM

ForexClear Compression Contracts. FCM Clearing Members

should contact the Clearing House's Membership Department

to request such a compression of Eligible FCM ForexClear

Compression Contracts; or

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

through the ClearLink API specifying the Eligible FCM
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ForexClear Compression Contracts it wishes to be compressed.

The FCM Clearing Member will be notified after the

applicable scheduled compression run whether compression

has occurred and the Clearing House will not automatically

reconsider such compression request on subsequent days

regardless of whether compression has occurred.

(b) In order to compress an Eligible FCM ForexClear Compression 

Contracts, an FCM Clearing Member must follow the process for

compression as set out above and must, at the time of compression,

have in its applicable FCM Client Sub-Account (or FCM 

ForexClear Suspension Sub-Account, if applicable) or Proprietary

Account two or more FCM ForexClear Contracts with the same

compression identifier (being an identifier applied by the 

Clearing House which indicates that such FCM ForexClear

Contracts are eligible for compression).

(c) In respect of each compression run, the Clearing House will notify 

Clearing Members of the cut-off time by which the FC M 

C l e a r i n g M e m b e r s m u s t n o t i f y t h e Clearing House of 

the requested Eligible FCM ForexClear Compression Contracts to

be compressed in order for such Eligible FCM ForexClear

Compression Contracts to be included in the relevant compression

run. The Clearing House shall process the compression of all

Eligible FCM ForexClear Compression Contracts notified to it

prior to such cut-off time and shall notify the applicable FCM

Clearing Member after the applicable compression run of the result

of such compression procedure. A notification received after the

relevant cut-off time shall be treated as if such notification was 

submitted on the following day.

(d) Following the compression process described above and as further

set out in FCM Regulation 49(o) (Registration of FCM 

ForexClear Contracts; Compression; ForexClear Accounts), the

applicable FCM Clearing Member shall promptly notify the

Clearing House if it believes that any errors have occurred in the

compression process or if its books and records do not reconcile

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

ForexClear Contracts as notified to the FCM Clearing Member by

the Clearing House.

2.2.192.2.20 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 associated Collateral.

For transfers other than Permitted Transfers (as defined below), please contact

the Clearing House’s Risk Management Department.
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Permitted Transfers

Any transfer that meets the criteria in any of (a) through (g) below shall be a

“Permitted Transfer” for purposes of Regulation 49(r) and this Section 

2.2.20. In certain circumstances, a Permitted Transfer may be effected for all 

or part of the notional amount associated with the Transferring ForexClear 

Contracts. Notwithstanding the foregoing, but subject to Applicable Law, the 

Clearing House may reject any Permitted Transfers in its sole discretion.

(a) a transfer of one or more Transferring ForexClear Contracts where: 

(A) the Transfer Account of the Eligible Transferor is a Client 

Account; (B) the Transfer Account of the Eligible Transferee is a 

Client Account; and (C) the Receiving Clearing Member and the 

Carrying Clearing Member are separate legal entities;

(b) a transfer of one or more Transferring ForexClear Contracts where: 

(A) the Transfer Account of the Eligible Transferor is a Client 

Account; (B) the Transfer Account of the Eligible Transferee is a 

Client Account; and (C) the Receiving Clearing Member and the 

Carrying Clearing Member are the same legal entity;

(c) a transfer of one or more Transferring ForexClear Contracts where: 

(A) the Transfer Account of the Eligible Transferor is a Client 

Account; (B) the Transfer Account of the Eligible Transferee is a 

Proprietary Account; and (C) the Receiving Clearing Member and 

the Carrying Clearing Member are separate legal entities;

(d) a transfer of one or more Transferring ForexClear Contracts where: 

(A) the Transfer Account of the Eligible Transferor is a Proprietary 

Account; (B) the Transfer Account of the Eligible Transferee is a 

Client Account; and (C) the Receiving Clearing Member and the 

Carrying Clearing Member are separate legal entities;

(e) a transfer of one or more Transferring ForexClear Contracts where: 

(A) the Transfer Account of the Eligible Transferor is a Proprietary 

Account; (B) the Transfer Account of the Eligible Transferee is a 

Client Account; and (C) the Receiving Clearing Member and the 

Carrying Clearing Member are the same legal entity;

(f) a transfer of one or more Transferring ForexClear Contracts where: 

(A) the Transfer Account of the Eligible Transferor is a Client 

Account; (B) the Transfer Account of the Eligible Transferee is a 

Proprietary Account; and (C) the Receiving Clearing Member and 

the Carrying Clearing Member are the same legal entity; and

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

discretion.

Other than pursuant to FCM Regulation 13(d), an FCM Clearing Member,

acting for its own account or for the account of an FCM Client, may not effect

Permitted Transfers in accordance with paragraphs (d) or (e) above.
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Transfer Requests

Each transfer request (“Transfer Request”) pursuant to Regulation 49(r) and

this Section 2.2.20 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 FCM ForexClear Contracts from the Transfer Account of an

Eligible Transferor (with or without the transfer of associated Collateral), 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 FCM ForexClear Contracts in the Transfer Account of the Eligible

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

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

associated Collateral, if applicable) is effected, fails or is rejected in

accordance with Regulation 49(r) and these FCM Procedures.

Transfer Notice Period

The timing for Transfer Requests pursuant to Regulation 49(r) and this Section

2.2.20 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 from the Transfer Account of an

Eligible Transferor to the Transfer Account of an Eligible Transferee pursuant 

to Regulation 49(r) and this Section 2.2.20 that:

(h) the transfer is a Permitted Transfer;

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

with:

a Transfer Request in the form and manner prescribed by the Clearing House, 

which may be submitted by an FCM Client on its behalf; and

such evidence of the authorization of the Permitted Transfer by the Eligible 

Transferor, Eligible Transferee and the FCM Client, as applicable, as the 

Clearing House may require in its sole discretion;

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

Client, as applicable, has become insolvent (each Eligible 

Transferor, Eligible Transferee and FCM 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);
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(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 or regulation, including:

(i) the authorization, 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 FCM 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;

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

available) Required Margin to the Clearing House in respect of its 

current FCM ForexClear Contracts and the Transferring ForexClear 

Contracts;

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

accordance with this Section 2.2.20 (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

accordance with this Section 2.2.20 or as otherwise reasonably

determined by the Clearing House); and

(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.

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, and shall promptly notify the Receiving
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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 FCM 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 49(r) and this Section 2.2.20, including a

request submitted by 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:

(r) 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 crossmargining, cross-netting or other similar arrangements with respect 

to the Transferring ForexClear Contracts of that Eligible Transferor 

that are being transferred or that Eligible Transferor’s related 

collateral;

(s) 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

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

this Section 2.2.20 will include the transfer of associated Collateral to the 

Transfer Account of the Eligible Transferee:

(u) upon completion of the transfer, (x) the Clearing House shall have

satisfied and discharged all of its obligations under the FCM 

Clearing Membership Agreement and the FCM Rulebook to repay 

or return to the Carrying Clearing Member any amounts in respect 

of such associated Collateral and (y) the associated Collateral 

furnished to the Clearing House by the Carrying Clearing Member 

and held by the Clearing House in respect of the Transferring 

ForexClear Contracts shall be deemed to have been delivered by the

Receiving Clearing Member to the Clearing House (aa) where the 

Receiving Clearing Member is not an FCM Clearing Member, in the 

case of cash Collateral, by way of title transfer and, in the case of 

non-cash Collateral, shall be held by the Clearing House on behalf 

of the Receiving Clearing Member and such Receiving Clearing 

Member’s rights in such non-cash Collateral shall become subject to 

the relevant Deed of Charge of the Receiving Clearing Member, or 

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

Member, by way of a first-priority security interest granted by the 

Receiving Clearing Member to the Clearing House under the FCM 

Clearing Membership Agreement and the FCM Rulebook; 

furthermore, and 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 associated Collateral transferred;

(v) where all or a portion of the associated Collateral has been accepted 

by the Receiving Clearing Member, LCH shall promptly transfer the 

Transferring ForexClear Contracts and the accepted associated 

Collateral, and the transfer of the Transferring ForexClear Contracts 

shall be conditioned on the transfer of the accepted associated 

Collateral, and vice versa; and

(w) if the transfer of all Transferring ForexClear Contracts and (if 

applicable) all accepted associated Collateral is not completed for 

any reason, then any actual transfer of associated Collateral or 

Transferring ForexClear Contracts that has occurred, as the case 

may

(x) be, shall be deemed not to have occurred, and any actual transfer of 

associated Collateral or Transferring ForexClear Contracts that has 

occurred shall be immediately unwound.

Verification and Reliance

Subject to the following paragraph, but otherwise notwithstanding anything to

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

Transfer Request in accordance with Regulation 49(r) and this Section 2.2.20,

the Clearing House shall be authorized and entitled to rely conclusively on the

instructions of, and information provided by, the Receiving Clearing Member
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and the Carrying Clearing Member, which shall be solely responsible for all

such instructions and information.

The Clearing House shall verify that the Transferring ForexClear Contracts 

identified to it by a Receiving Clearing Member as being the subject of such 

Transfer Request correspond to FCM ForexClear Contracts that, according to 

its records, are registered in the Transfer Account of the Carrying Clearing 

Member on behalf of the Eligible Transferor. In the event that the Clearing 

House identifies a discrepancy, it will notify the Receiving Clearing Member 

and the Carrying Clearing Member and no transfer will occur until such time 

as the Transferring ForexClear Contracts identified to the Clearing House can 

be verified to the Clearing House.

Fees

Any Permitted Transfer effected pursuant to Regulation 49(r) and in 

accordance with these FCM Procedures will be subject to such fees as are 

established by the Clearing House from time to time in its sole and absolute 

discretion, and notified to FXCCMs via a member circular.

2.2.202.2.21 Actions in Respect of an FCM Client Default

This Section describes certain transfers and registrations that, under certain

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

Client Default with respect to a given Defaulting FCM Client.

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

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

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

Section 2.2.20.

Notwithstanding anything to the contrary contained in this Section 2.2.20, the

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

provisions of the CEA and the CFTC Regulations.

(a) Transfers between Proprietary Accounts and FCM Client Accounts

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

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

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

House transfer one or more FCM ForexClear Contracts (including 

those submitted for registration pursuant to Section 2.2.20(c)) or 

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

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

the Proprietary Account of a ForexClear Clearing Member or an FCM 

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

Proprietary Account of a ForexClear Clearing Member or FCM 

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

addition to any other generally applicable provisions of the FCM

Rulebook): neither the FCM Clearing Member nor any ForexClear 
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Clearing Member or FCM Clearing Member to or from which the 

ForexClear Contracts are being transferred pursuant to this Section 

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

completion of the transfer).

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

Clearing House will not require that the Defaulting FCM Client 

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

House effect a transfer requested by the FCM Clearing Member 

pursuant to Regulation 13(d)(i).

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

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

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

documents as the Clearing House requested in accordance with the 

foregoing.

(b) Proprietary Account Position Transfers

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

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

to the extent permitted by Applicable Law (including all applicable 

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

that the Clearing House transfer an FCM ForexClear Contract from its 

Proprietary Account to the Proprietary Account of a ForexClear 

Clearing Member or other FCM Clearing Member pursuant to FCM 

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

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

FCM Rulebook): the transferor FCM Clearing Member is permitted 

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

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

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

such transfer.

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

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

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

House requested in accordance with the foregoing.

(c) Registration of FCM ForexClear Contracts in Defaulting FCM 

Client’s FCM Client Sub-Account

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

Defaulting FCM Client, an FCM Clearing Member may submit FCM

ForexClear Contracts to the Clearing House for registration in such

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

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

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

FCM ForexClear Contracts is effected via an Approved Trade Source 

System or other method such method as the Clearing House shall 
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instruct for such purpose, and on such terms and including such details 

as the Clearing House shall require.

(d) Representations

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

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

shall in every case be deemed a representation by the FCM Clearing 

Member to the Clearing House that:

(i) an FCM Client Default has occurred;

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

applicable) any required notices to the Defaulting FCM Client 

in respect of (i) such FCM Client Default and (ii) any of the 

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

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

with the Defaulting FCM Client and has authority to effect the 

transfers and/or registrations specified in the FCM Clearing 

Member’s requests to the Clearing House in respect of the 

Defaulting FCM Client;

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

the Clearing House are in compliance with Applicable Law; 

and

(v) the individual making such request or submission (or issuing 

any related instructions to the Clearing House) is authorized to 

do so on behalf of the FCM Clearing Member.

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

Clearing House to carry out any of the actions described in paragraphs

(a) to (c) above:

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

(i) satisfactory evidence of the occurrence of the FCM Client

Default and (ii) all other documentation required by the 

Clearing House, which shall include an indemnity from the 

FCM Clearing Member in favor of the Clearing House, the 

form and manner of which shall be determined by the Clearing 

House in its sole discretion. For purposes of this paragraph,

“satisfactory evidence” may be, to the extent permitted by the 

Clearing House in its sole discretion, the FCM Clearing 

Member’s instruction to effect the relevant transfer under 

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

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

House shall be entitled to request additional evidence and/or 

documentation for legal, regulatory or risk management reasons; 

and
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(vii) the relevant FCM Clearing Member shall transfer (or make

available) Required Margin into its Proprietary and/or the

applicable FCM Client Sub-Account, taking into account that 

an FCM Clearing Member may not request the transfer of an

Associated Collateral Balance in connection with a transfer of 

an FCM ForexClear Contract from an FCM Client SubAccount to a Proprietary Account.

2.2.212.2.22 Automatic Exercise of FCM ForexClear NDO Contracts

If, at the Expiration Time on the Expiration Date, the In-the-Money Amount 

of an FCM ForexClear NDO Contract equals or exceeds the product of:

(a) the number of basis points as published by the Clearing House from 

time to time as being applicable to the ForexClear Currency Pair 

referenced in that FCM ForexClear NDO Contract; and

(b) the Call Currency Amount or the Put Currency Amount, as

appropriate,

in each case as calculated at or immediately prior to the Expiration Time on 

the Expiration Date of the given FCM ForexClear Contract, such FCM 

ForexClear NDO Contract shall be deemed exercised as of such time.

For the purposes of this Section 2.2.19, the Clearing House may change the 

number of basis point applicable to any ForexClear Currency Pair by giving 

three business days’ prior notice to affected FX CCMs (or such shorter notice 

period as determined by the Clearing House following consultation with the 

affected FX CCMs).

The "In-the-Money Amount" in relation to an FCM ForexClear NDO Contract 

shall, in respect of the Exercise Date, be equal to:

(c) in the case of a Call, the excess of the FX Spot Reference Price over 

the Strike Price, multiplied by the Call Currency Amount, where

both the Strike Price and the Settlement Rate are quoted in terms of 

the amount of Put Currency to be paid per one unit of Call Currency; 

and

(d) in the case of a Put, the excess of the Strike Price over the FX Spot 

Reference Price, multiplied by the Put Currency Amount, where 

both the Strike Price and the Settlement Rate are quoted in terms of 

the amount of Call Currency to be paid per one unit of Put Currency.

Capitalised terms used in this Section 2.2.19 and not otherwise defined shall have 

the meanings specified for such terms in (i) the FCM ForexClear Contract Terms 

applicable to the given FCM ForexClear NDO Contract or, if not defined therein, 

(ii) the 1998 FX and Currency Options Definitions (including Annex A thereto) 

as published by the International Swaps and Derivatives Association, Inc., the 

Emerging Markets Trade Association and The Foreign Exchange Committee.
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2.2.222.2.23 Proprietary Account Position Transfers

The FCM ForexClear Clearing System provides functionality for the transfer 

of positions from an FCM Clearing Member's Proprietary Account. Any such 

transfer may only occur if the Receiving Clearing Member is an affiliate of the 

Carrying Clearing Member.

Before the completion of a portfolio transfer, the Clearing House will perform 

a margin impact analysis of the transfer to the source and destination 

portfolios. The Clearing House will advise the relevant FX FCM regarding 

any additional collateral that may be required in order to complete the 

portfolio transfer. An FCM Clearing Member who wishes to effect a position 

transfer to another FCM Clearing Member should contact the Clearing 

House's Risk Management Department. Transfers will only be effected once 

adequate cover has been provided by both parties to the transfer.

2.2.232.2.24 FCM Clearing Member's Client Fund Transfer

The FCM ForexClear Clearing System provides functionality for the transfer 

of FCM ForexClear Contract whereby an FCM Client has incorrectly booked 

the FCM ForexClear Contract to a fund, and wishes to re-locate the FCM 

ForexClear Contract to an alternative fund within the accounts of the same 

FCM Clearing Member.

Transfers can only occur based upon the below rules:

(a) A valid request has been received by the Clearing House from the 

applicable FCM Clearing Member on behalf of the FCM Client, as 

per Schedule 2.2B.

(b) The FCM ForexClear Contract is registered by the Clearing House, 

and sufficient Margin has been furnished to cover the FCM 

ForexClear Contract.

(c) Transfers are only handled within the accounts of a single FCM

Clearing Member (i.e., not a transfer between two FCM Clearing 

Members).

Transfer requests received by FCM ForexClear Operations prior to 15:00 

London time will be managed and included in the 18:00 London time margin 

run. The transfer of the FCM ForexClear Contract will occur provided that

sufficient Margin is held for the FCM Clearing Member and outstanding 

payments of Variation Settlement and other obligations have been made as 

necessary.

2.2.242.2.25 ForexClear Reporting

For purposes of reporting obligations to the CFTC, FXCCMs may only report

details of FCM ForexClear Contracts, including terminations and

modifications to an FCM ForexClear Contract, to an Approved LCH SDR. A

list of Approved LCH SDRs is available on the Clearing House's website. In

the event an FXCCM wishes to report details of FCM ForexClear Contracts to
FCM Procedures FCM ForexClear

LCH Limited © 2023 - 201 - June 2023

a swap data repository that is not an Approved LCH SDR, the FXCCM must

provide the Clearing House with reasonable prior notice of the date on which

it wishes to report to such swap data repository.

FXCCMs must inform their respective FCM Clients of the list of Approved

LCH SDRs, and inform such FCM Clients that the Clearing House is only

able to report details of an FCM ForexClear Contract to an Approved LCH

SDR.

The Clearing House produces a suite of treasury reports for members across 

each of the Clearing House services. Some of these reports are cross-service 

reports and others are specific to the ForexClear Service (including the FCM 

ForexClear Service), thus an FX FCM will receive reports in respect of the 

FCM ForexClear Service and may also receive cross-service reports where it 

is a member of another service. The terminology used in a report in respect of 

Margin, Variation Settlement or Price Alignment Amount may reflect 

terminology commonly used in the industry. Such terminology shall not affect 

the interpretation or construction of any provisions or terms of the FCM 

Regulations or FCM Procedures.

In respect of the FCM ForexClear Service, on each business day the Clearing 

House will provide two sets of reports to FX FCMs: (1) Banking Reports; and 

(2) reports direct from the FCM ForexClear Service (together “ForexClear 

Reporting”). These Procedures reference the FCM ForexClear Service 

specific reports. Each day's report will remain available for download by FX 

FCMs from the FCM ForexClear Service Portal for five days.

The Clearing House (acting, where applicable, through the entity to which it 

has elected to delegate the relevant reporting obligations) shall, to the extent 

required by (and in line with the requirements of) Applicable Law (including 

Parts 43 and 45 of the CFTC Regulations, and applicable requirements under 

English law), report to one or more data or trade repositories (including swap 

data repositories) or similar body the details of all FCM ForexClear 

Transactions and FCM ForexClear Contracts, including any modifications or 

terminations without duplication and no later than the working day following

the conclusion, modification or termination of such contract. In order to avoid 

any such duplication of reports, each FX FCM acknowledges and agrees that it 

will not report the details referred to in this paragraph to the bodies referred to 

in this paragraph, unless otherwise agreed with the Clearing House.

(a) Margin Liability Reports

Reports detailing Liabilities are provided to FX FCMs following every 

scheduled Margin Run in accordance with Section 2.2.18 and where 

additional Collateral or other payment has been called by the Clearing 

House. Additionally, a report, including sensitivities, is provided at 

ForexClear Contracts level. A report will also be provided detailing an 

FX FCM's Margin utilization level. If an FX FCM's Liabilities exceed 

its total available Margin, ForexClear will alert the FX FCM.
FCM Procedures FCM ForexClear

LCH Limited © 2023 - 202 - June 2023

(b) Market Data Reports

Reports detailing Market Data are provided to FX FCMs following 

every scheduled Margin Run. They include reports of Market Data 

and Settlement Rate used in the valuation of FCM ForexClear 

Contracts and reports of Market Data shifts for each historic scenario 

used in IM calculations.

(c) Trade Reports

Reports are provided that enable FX FCMs to monitor their firms' 

trading events and positions in respect of ForexClear. Reports on open 

FCM ForexClear Contracts and on cancelled FCM ForexClear 

Transactions and FCM ForexClear Contracts are generated at EOD and 

reports on transferred FCM ForexClear Contracts are made on an ad 

hoc basis.

(d) Trade Fixing and Settlement Reports

Reports are published on each business day detailing the FCM 

ForexClear Contracts to which the Settlement Rate has been applied on 

that business day (the “NDF Fixings” report), FCM ForexClear 

Contracts that have been settled during that current business day (the 

“Settlements Today” report) and FCM ForexClear Contracts that will 

settle the next business day (the “NDF's Fixed with Settlement 

Tomorrow” report).

(e) Fees Reports

Reports on trading volumes on a daily and monthly basis are provided 

to FX FCMs. Monthly reports are provided on the last business day of 

each month. They include the full trading volumes on which the 

monthly transaction fees will be charged to those FX FCMs choosing 

to have tariffs levied per transaction.

(f) Banking Reports

Reports relating to an FX FCM’s Collateral are available from the 

Clearing House portal at https://clearingservices.lch.com/portal/login. 

(g) Real-time Reporting

A near real-time view of member liabilities, Collateral pledged, 

Margin and credit utilization will be available from the ForexClear 

Service Portal (referred to in Section 2.2.17).

In accordance with CFTC Part 45 requirements (where the FX FCM 

has a reporting obligation), FX FCMs must provide the Clearing House 

(i) the USI of the original swap that is submitted to the Clearing House 

for registration and (ii) the LEI of the original swap SDR (i.e., 

“OriginalSwapRepository” or equivalent field) to enable the Clearing 
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LCH Limited © 2023 - 203 - June 2023

House to accurately report the termination of the original swap to the 

appropriate SDR.

2.2.252.2.26 Treasury Operations & Collateral Management

(a) Cover Distribution

The Clearing House nets each FX FCM's Liabilities (i.e., margins, 

settlements, Price Alignment Amounts and multipliers) and then the 

total of Cash collateral and non-cash Collateral are applied to offset 

those net Liabilities. This process is known as cover distribution 

(“Cover Distribution”). FX FCMs can choose whether cash or noncash Collateral should be applied first. At the end of this process, if an 

FX FCM has a shortfall, a PPS (as defined in Section 2.2.26(c) below) 

call for additional Collateral, settlement amounts or Price Alignment

Amounts is made. Conversely, any excess cash remaining after the 

final overnight Margin Run can, if requested before 09:30 hours be 

repaid to the FX FCM.

(b) Cover Distribution Notification

FX FCMs are informed via email of their: Liabilities as a percentage 

of their current total cover (such percentage being shown as a 

percentage of the aggregate cover in their cash and non-cash Collateral 

account(s)) and are directed to the ForexClear Service Portal which 

provides reports (at the times specified in Section 2.2.25) informing 

FX FCMs of their (i) total Liabilities under the ForexClear Service; 

(ii) current total cover posted with the Clearing House for ForexClear; 

and (iii) Liabilities as a percentage of their current total cover (such 

percentage being shown as a percentage of the aggregate cover in their 

cash and non-cash Collateral account(s)).

The reports accessed via the ForexClear Service Portal will enable FX 

FCMs to log in and examine the underlying data.

(c) Protected Payment System

The Clearing House operates the protected payments pystem (“PPS”) 

for transferring funds to and from its FX FCMs to cover their Transfer

Requirements. This is similar to a direct debit arrangement where the 

PPS bank confirms that any Clearing House-specified call is met.

FX FCMs are obliged to hold an account with a UK PPS bank in USD, 

as well as a USD account with a PPS bank in the USA.

The list of PPS banks operating in the UK and US is available from the 

Clearing House on request.

(d) Acceptable Forms of Collateral Cover

A detailed description of acceptable collateral and applicable

processes is available from the Clearing House on request.
FCM Procedures FCM ForexClear

LCH Limited © 2023 - 204 - June 2023

(e) Interest and Accommodation

Interest is payable to or by FX FCMs on cash Collateral with respect to 

the ForexClear Service held by the Clearing House. The rate to be 

applied will be either LDR – London Deposit Rate, or CDR – Client 

Deposit Rate, as further described in Section 1.6.3 of Section 3 of the 

Procedures and as prescribed by the Clearing House from time to time 

by publication on its website.

A utilization fee, known as an accommodation charge, is charged on 

securities lodged at the Clearing House to cover liabilities. For an 

overview of interest and accommodation charges, please contact the 

Clearing House's Treasury Operations.

The Clearing House shall notify FX FCMs of any change to the LDR 

for the ForexClear Service via member circular.

2.2.262.2.27 Default Management

(a) Portfolio Splitting

As part of the ForexClear DMP (contained in the ForexClear DMP 

Annex to the Default Rules), the Clearing House may divide an 

Auction Portfolio into two or more individual Auction Portfolios. In 

circumstances where such portfolio splitting is adopted, the Clearing 

House will, in consultation with the ForexClear DMG (as defined in 

the ForexClear DMP Annex to the Default Rules), seek to create:

(i) one or more individual Auction Portfolios which have 

comparatively greater levels of risk associated with them, 

thereby isolating such Auction Portfolios from those which are 

more risk neutral; and

(ii) one or more individual Auction Portfolios which are more risk 

neutral.

(b) Acceptance of Bids

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

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

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

in its reasonable discretion that accepting the bid may:

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

of its being a Recognised Clearing House or a Derivatives 

Clearing Organization;

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

harm;

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

Clearing House; or
Appendix IV: FCM Regulations
CORPORATE

FCM REGULATIONS OF THE CLEARING HOUSE 

LCH LIMITED 
FCM Regulations

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JuneDecember 20232

SwapClear Contracts in accordance with Regulation 46 and 

relevant Compression Documentation

“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.

“Approved LCH SDR” means any swap data repository approved by the Clearing 

House from time to time for the submission of swap data 

by FCMs. 

“Assumed Allocation” has the meaning assigned to it in FCM Regulation 

15(d)(iii).

“Auction Portfolio” has the meaning assigned to it in either (i) the Rates Service

DMP Annex of the Default Rules or (ii) the ForexClear 

DMP Annex of the Default Rules, as applicable.

“Authorised Compression 

Client”

means an FCM Client that is party to relevant Compression 

Documentation and in respect of which the relevant 

Compression Clearing Member is authorised to provide 

and receive instructions (including the acceptance of a 

Compression Proposal) on behalf of such FCM Client and 

in respect of which the relevant ACSP notified the Clearing 

House that such FCM Clearing Member acts for such FCM 

Client.

“Automatic Rejection” has the meaning assigned to such term in the FCM

Procedures.

“Available FCM Buffer” means, at any given time, (i) with respect to FCM Buffer 

held in the FCM Buffer Sub-Account of an FCM Omnibus 

Swaps Client with LCH that is subject to the Without Client 

Excess Model, FCM Buffer credited therein that is not 

Encumbered FCM Buffer (as described in FCM Regulation 

15(c)(ii)(A)), and (ii) with respect to FCM Buffer held in 

the FCM Buffer Sub-Account of an FCM Omnibus Swaps 

Client with LCH that is subject to the With Client Excess 

Model, FCM Buffer credited therein that is not being used 

by the Clearing House to offset Margin deficits in the 

relevant FCM Client Sub-Accounts (as described in FCM 

Regulation 15(d)(iv)).

“Backload Registration 

Cycle”

has the meaning assigned to such term in the FCM 

Procedures.

“Backloaded Trade” has the meaning assigned to such term in the FCM 

Procedures.
FCM Regulations

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JuneDecember 20232

FCM Contracts registered to such sub-account and carried 

for such FCM Client by its FCM Clearing Member, based 

on information provided by the applicable FCM Clearing 

Member and/or an FCM Approved Trade Source System 

to the Clearing House. Each FCM Client will have an FCM 

Client Sub-Account in the relevant FCM Omnibus Swaps 

Client Account with LCH for each Business Category of 

FCM Contracts in which such FCM Client clears Swap 

Products.

“FCM Client Sub-Account 

Balance”

means, at any given time, the legally segregated value of 

the Margin balance attributable to an FCM Client SubAccount of the relevant FCM Client as determined by the 

Clearing House in accordance with the FCM Rulebook. 

For the avoidance of doubt, an FCM Client Sub-Account 

Balance at no time reflects the value of any FCM Buffer 

(including any Encumbered FCM Buffer) or the value of 

any Unallocated Excess.

“FCM Contract” means an FCM SwapClear Contract, an FCM ForexClear 

Contract, an FCM Exchange Contract, or an FCM Listed 

Interest Rates Contract. “FCM Contracts” means FCM 

SwapClear Contracts, FCM ForexClear Contracts, FCM 

Exchange Contracts and FCM Listed Interest Rates

Contracts, collectively.

“FCM Contract Subject to 

Delivery Notice”

means a Physically-Settled FCM Contract in respect of which 

a Delivery Notice has been given, and which has not been 

closed out, settled or invoiced back, in accordance with the 

FCM Rulebook. 

“FCM Contract Terms” means the FCM SwapClear Contract Terms, the FCM 

ForexClear Contract Terms and the FCM Listed Interest 

Rates Contract Terms, collectively.

“FCM Default Fund 

Agreement”

means an agreement in a form prescribed by the Clearing 

House, entered into between an FCM Clearing Member 

and the Clearing House relating to the “default funds” of 

the Clearing House.

“FCM Designated Trading 

Venue”

means a FCM Trading Venue that is of a type designated 

by the Clearing House to qualify as a FCM Designated 

Trading Venue.

"FCM Eligible Trading 

Venue"

means:

(i) in respect of an FCM Rates Service Clearing 

Member, an FCM Trading Venue for which the 

Clearing House’s records reflect that such FCM 

Rates Service Clearing Member has completed the 

Clearing House’s process for enabling the FCM 

Rates Service Clearing Member to be eligible to 
FCM Regulations

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JuneDecember 20232

Client Account with LCH will not have attributed to it any 

FCM Contracts or Margin other than in connection with 

FCM Listed Interest Rates Contracts. Each FCM Omnibus 

Listed Interest Rates Client Account with LCH is a bookentry account, the associated Collateral of which is held in 

the LCH Foreign Futures Client Depository Account.

“FCM Omnibus SwapClear 

Client Account with LCH”

means an omnibus account maintained on the books of the 

Clearing House in the name of an FCM Clearing Member 

for the benefit of its FCM Clients, in which all FCM 

SwapClear Contracts cleared by such FCM Clearing 

Member on behalf of such FCM Clients, and all associated 

Collateral and Margin, will be reflected on the books of the 

Clearing House. Such FCM Omnibus SwapClear Client 

Account with LCH will not have attributed to it any FCM 

Contracts or Margin other than in connection with FCM 

SwapClear Contracts. Each FCM Omnibus SwapClear 

Client Account with LCH is a book-entry account, the 

associated Collateral of which is held in the LCH Swaps 

Client Segregated Depository Account. The Clearing 

House will establish FCM Client Sub-Accounts within 

each FCM Omnibus SwapClear Client Account with LCH.

“FCM Omnibus Swaps 

Client Account with LCH”

means either an FCM Omnibus SwapClear Client Account 

with LCH or an FCM Omnibus ForexClear Client Account 

with LCH.

“FCM Option Contract” means an FCM Exchange Contract or an FCM Listed 

Interest Rates Contract that is a contract for an Option.

“FCM Over-25 NDF 

Transaction”

means a FCM ForexClear NDF Transaction that has a 

notional amount greater than USD 25 million.

“FCM Portfolio Margined 

Contract” 

has the meaning assigned to it in the FCM Procedures. 

“FCM Portfolio Margining 

Arrangements” 

has the meaning assigned to it in the FCM Procedures. 

“FCM Portfolio Margining 

Calculation Tool” 

has the meaning assigned to it in the FCM Procedures. 

“FCM Portfolio Margining 

Eligibility Criteria” 

has the meaning assigned to it in the FCM Procedures. 

“FCM Portfolio Margining 

Eligible FCM Listed 

Interest Rates Contract” 

means those FCM Listed Interest Rates Contracts meeting 

the eligibility criteria to be FCM Portfolio Margined 

Contracts as set out from time to time in the FCM Product 

Specific Contract Terms and Eligibility Criteria Manual. 
FCM Regulations

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JuneDecember 20232

“FCM Rulebook” means the FCM Regulations, the Other Specific 

Regulations, the FCM Procedures and such other rules of 

the Clearing House, which are applicable to FCM Clearing 

Services, as published and amended from time to time.

“FCM Sub-25 NDF DTV 

Transaction”

means in respect of a FCM Designated Trading Venue, a 

Sub-25 NDF Transaction that is executed on such FCM 

Designated Trading Venue.

“FCM Sub-25 NDF 

Transaction”

means a FCM ForexClear NDF Transaction that has a 

notional amount of equal to, or less than, USD 25 million.

“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 presented to 

the Clearing House via an FCM Approved Trade Source 

System for the 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), 

regardless of whether (a) such transaction is an existing 

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

clearing, and (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 
FCM Regulations

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JuneDecember 20232

modified by FCM Regulation 46(q) or FCM Regulation 

49(r).

“Reference Currency 

Buyer”

has the meaning assigned to it in the UK General 

Regulations or FCM Contract Terms, as applicable.

“Reference Currency 

Seller”

has the meaning assigned to it in the UK General 

Regulations or FCM Contract Terms, as applicable.

“Reference Price” means a price (howsoever called) by reference to which an 

FCM Contract is marked to market or valued in accordance 

with the FCM Regulations and FCM Procedures.

“Registration Time” means, in respect of an FCM Contract, the applicable time 

at which the Clearing House registers such FCM Contract, 

as prescribed in the FCM Procedures.

“Regulatory Body” means the Secretary of State, The Financial Services 

Authority or professional body designated under Part 20 of 

the Financial Services and Markets Act 2000 or other body 

given regulatory powers under that Act, the Bank of 

England, the CFTC or any department, agency, office, 

court or tribunal of a nation, state, province or any other 

body or authority which exercises a regulatory or 

supervisory function under the laws of the United Kingdom 

or under any foreign law.

“Rejecting Compression 

Clearing Member”

has the meaning assigned to it in Regulation 46(n).

“Rejection Election” has the meaning assigned to it in the FCM Procedures.

“Required Margin” means, with respect to a particular account or accounts of 

an FCM Clearing Member with the Clearing House, the 

amount of Initial Margin required by the Clearing House 

(in accordance with the FCM Rulebook) to be held in such 

account or accounts from time to time.

“Resignation Effective 

Date”

means the date on which the termination of a Resigning 

Member's FCM Clearing Member status in respect of a 

specific FCM Clearing Service becomes effective as 

specified in FCM Regulation 5(a).

“Resigning Member” means at any time any FCM Clearing Member: (i) who has 

given notice to the Clearing House for the purposes of 

resigning from a particular FCM Clearing Service; or (ii) in 

respect of whom the Clearing House has given notice for 

the purposes of requiring such FCM Clearing Member to 

resign from a particular FCM Clearing Service.
FCM Regulations

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JuneDecember 20232

“Retirement Effective 

Date”

means the date on which the termination of a Retiring 

Member's FCM Clearing Member status becomes effective 

in accordance with Section 17 of the FCM Clearing 

Membership Agreement and the FCM Procedures as 

specified in FCM Regulation 5(e).

“Retiring Member” means at any time any FCM Clearing Member or, as the 

context may require, any former FCM Clearing Member: 

(i) who has given notice to terminate its FCM Clearing 

Member status to the Clearing House; or (ii) in respect of 

whom the Clearing House has terminated or given notice 

to terminate its FCM Clearing Member status, in each case 

in accordance with Section 17 of the FCM Clearing 

Membership Agreement and the FCM Procedures.

“Risk Neutralisation” has the meaning assigned to it in either (i) the Rates Service 

DMP Annex of the Default Rules or (ii) the ForexClear 

DMP Annex of the Default Rules, as applicable.

“Risk Status” means a status that the Clearing House designates an FX 

FCM based on (i) the Clearing House’s assessment of the 

FX FCM’s collateral and liabilities in respect of the 

ForexClear service, and its creditworthiness, and (ii) 

whether the FX FCM is a Defaulter.

“Rules Change Committee” means the decision-making body of the Clearing House 

that will oversee and implement all material alterations, 

amendments or extensions to the FCM Rulebook or the 

FCM Clearing Membership Agreement in accordance with 

its terms of reference

“Second Listed Interest 

Rates Clearing Member”

has the meaning assigned to it in FCM Regulation 54(c)(ii).

“Securities Collateral” means Collateral that is in the form of securities.

“Seller” means an FCM Clearing Member (or the Clearing House 

where the context so requires) who is a seller under the 

terms of, as applicable, an FCM Option Contract, a 

Physically-Settled FCM Contract or an FCM Contract 

Subject to Delivery Notice.

“Separate Risk Check” has the meaning assigned to it in the FCM Procedures.

“Settlement Finality 

Regulations”

means the Clearing House's Settlement Finality 

Regulations from time to time in force.

“Settlement Payment” has the meaning assigned to it in FCM Regulation 47(d).