Document ID: chunk:federal_register_of_legislation:F2024C01109:reg:4:p7
Version: federal_register_of_legislation:F2024C01109
Segment Type: reg
Provision Reference: reg 4 (pt 7/34)
Character Range: 138779–141521

for Margin
(1) A Trading Participant's Client agreement must provide that Calls for Initial Margin and Variation Margin must be satisfied by payment unless the Trading Participant agrees to accept and receives, in lieu of payment, Approved Securities.
(2) A Trading Participant's Client agreement must provide that:
(a)        if the Trading Participant receives Approved Securities in accordance with subrule (1), such Approved Securities shall be retained by the Trading Participant until such time as the liability of the Client is extinguished either by the relevant contracts being Closed Out or payment being made by a Buyer or delivery in accordance with the Rules being effected by a Seller; and
(b)       if the liability of the Client is not extinguished, as set out in paragraph (a), then the Approved Securities may be realised by the Trading Participant and the proceeds applied against that liability.
(3) A Trading Participant must ensure liability of a Client for Initial Margin is Covered at all times.

7.2.6 Time for payment of Margins
(1) Where a Call is made for Initial or Variation Margin, the Trading Participant must stipulate the time for payment or lodgement of Approved Securities, which must not be greater than:
(a)        24 hours if the Client's address is within Australia; or
(b)       48 hours if the Client's address is outside Australia.
(2) Subject to subrule (4) and Rule 7.2.10, a Trading Participant must not provide credit for a Client beyond the periods specified in paragraphs (1)(a) and (b).
(3) A Trading Participant's Client agreement must provide that time shall be of the essence in respect of payment or lodgement under this Part 7.2.

(4) A Trading Participant will not be in breach of subrule (2) where the Trading Participant exercises a reasonable discretion to not Close Out in accordance with subrule 7.2.8(3).

7.2.7 Spread margins

(1) Where a Trading Participant holds a spread position executed on a Market on behalf of a Client, the Trading Participant must Call an Initial Margin of not less than the amount for that spread determined by the Clearing Facility for that Market.

(2) When one leg of a spread position executed on a Market is in the first delivery (spot) month, the Initial Margin required on that leg must not be less than the amount required by the Clearing Facility for that Market on the first delivery (spot) month, and the other leg of the spread must attract the normal Initial Margin requirements.

7.2.8 Obligation of Close Out

(1) Subject to subrule (3), where a Client is in default by failing to pay a Call (or lodge Approved Securities) within the time stipulated under subrule 7.2.6(1), a Trading Participant must, immediately upon expiry of that time