Document ID: chunk:federal_register_of_legislation:F2024C01109:reg:4:p8
Version: federal_register_of_legislation:F2024C01109
Segment Type: reg
Provision Reference: reg 4 (pt 8/34)
Character Range: 141282–144065

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 period, Close Out to the extent necessary to counter the Call, all or any existing Open Positions in any market held by the Trading Participant on account of the Client.

(2) A Trading Participant's Client agreement must provide that the Trading Participant shall not be liable to the Client for any loss sustained by the Client as a result of the Trading Participant Closing Out in accordance with subrule (1).

(3) A Trading Participant shall not be obliged to Close Out futures positions in accordance with subrule (1) where the Trading Participant exercises a reasonable discretion to not Close Out having regard to:
 1.         the expertise and financial status of the Client;
 2.        any genuine attempts by the Client to meet the Call within the time prescribed; and
 3.         whether relevant actions or omissions of third parties resulted in the Client failing to pay the Call.

7.2.9 Margin requirements—Trading on financial markets other than Markets operated by the Market operator, Margin Action Book and Margin Default Register

(1) Where a Trading Participant of a Market is dealing in Contracts on behalf of Clients on a market other than the relevant Market, the Trading Participant must comply with any margin obligations contained in the rules of that market.

(2) Where the rules of a market referred to in subrule (1) do not contain any margin obligations, the Trading Participant must comply with the margin obligations set out in this Part when dealing in Contracts on behalf of Clients on that market as if it were dealing in Contracts on behalf of Clients on the relevant Market.
(3) A Trading Participant must ensure that it has procedures in place to determine the Initial Margin and Variation Margin Calls are being made as soon as possible after the execution of the Client's instructions on a Market, including, but not limited to, the maintenance of a Margin Action Book and a Margin Default Register for the relevant Market.
(4) For the purposes of subrule (3), a Margin Action Book is a document recording, without limitation, the following information about action taken in relation to Margin Calls:
(a)        Client name;
(b)       amount of Call required;
(c)        time and date Client contacted;
(d)       Client response; and
(e)        date funds received.
(5) For the purposes of subrule (3), a Margin Default Register is a document recording, without limitation, the following information in relation to non-receipt of Margin payments:
(a)        Client name;
(b)       amount of the Call;
(c)