Document ID: chunk:federal_register_of_legislation:F2024C01107:body:0:p46
Version: federal_register_of_legislation:F2024C01107
Segment Type: other
Provision Reference: 
Character Range: 121997–124866

trading halt, the last market value may be used; and
(b)       a suspension, the market value should be taken as nil on the basis that the security is not Liquid.

A1.2.5 Margined Financial Instruments method
(1) For trades in Financial Instruments which are margined, other than unsettled trades in margined Equities, Debt Instruments and Warrants, the counterparty risk amount for a Counterparty:
(a)        is the full value of the outstanding settlement amount, premium, deposit or margin call that the Counterparty is required to pay to the Market Participant, regardless of whether or not the Market Participant is required to pay that amount to an exchange, clearing house or other entity;
(b)       is the full value of the outstanding settlement amount, premium, deposit or margin call that is due from an entity with respect to client or house trades cleared by that entity; and
(c)        commences at the time that amounts are normally scheduled for payment to the relevant exchange or clearing house.
(2) A Market Participant may reduce the unpaid settlement amount, premium, deposit or margin call by the amount of cash paid by the Counterparty or collateral held by the Market Participant on behalf of the Counterparty if:
(a)        the collateral is Liquid and only to the extent that it is Liquid;
(b)       the collateral is unrelated to a particular or specific transaction and is different to any cash or collateral paid to the relevant exchange or clearing house in respect to specific transactions;
(c)        the collateral is under the control of the Market Participant, able to be accessed by the Market Participant without the approval of a third party and not otherwise encumbered;
(d)       the collateral is valued at the mark-to-market value; and
(e)        the collateral arrangement is evidenced in writing by a legally binding agreement between the Market Participant and the client or Counterparty in circumstances where:
(i)         the Market Participant has established that the client or Counterparty and the persons signing the agreement have the legal capacity to enter into the agreement and provide the nominated collateral; and
(ii)       the agreement provides for the Market Participant to deal with that collateral in the event that the client or Counterparty defaults on its settlement of the relevant transactions to recover any amounts owed to the Market Participant,
and the Market Participant may only apply such collateral in accordance with the conditions specified in the collateral agreement.
(3) For the purposes of paragraph (1)(a):
(a)        the obligation to calculate a risk amount for amounts owing from "normal agency clients" excluding other participants in the relevant market will be deemed to be from the time that amounts are normally scheduled for payment to the relevant exchange or clearing house,