Document ID: chunk:federal_register_of_legislation:F2024C01107:body:0:p43
Version: federal_register_of_legislation:F2024C01107
Segment Type: other
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Character Range: 114153–116970

the time the transaction is executed until the time the transaction is settled, even if the time until settlement date is greater than 31 days;
(iv)      is not the clearer for that transaction, the Market Participant must calculate a counterparty risk amount on its exposure to the client from the time that the clearer seeks recourse from the Market Participant for a client failing to settle its obligations with the Clearing Participant.
           Note: Under Rule A4.1.3, a Market Participant that acts as underwriter of an initial public offering or placement of new shares will also be required to calculate a counterparty risk amount in respect of that activity in accordance with this Annexure 1.
(11) For the purposes of determining a Client Balance when dealing with a Fund Manager, the Market Participant's Counterparty is determined as follows:
(a)        if the Market Participant is immediately provided with the underlying client details by the Fund Manager, or if the Market Participant has a standing instruction for the underlying client details to be provided, the Market Participant must treat the underlying client as the Counterparty;
(b)       if the Market Participant books trades directly to the Fund Manager or its nominee company and the Fund Manager does not provide details of the underlying client, the Market Participant is entitled to treat the Fund Manager as the Counterparty.

A1.2.3 Free Delivery method
(1) For a Free Delivery in a Financial Instrument, the counterparty risk amount for the Counterparty is:
(a)        8% of that part of the contract value subject to a Free Delivery, where payment or delivery of the Financial Instrument which is the subject of a Free Delivery remains outstanding for less than two Business Days following the settlement date; and
(b)       100% of that part of the contract value subject to a Free Delivery, where payment or delivery of the Financial Instrument remains outstanding for greater than two Business Days following the settlement date.
For the purposes of this subrule, settlement date means the date that the Market Participant makes the Free Delivery (that is, the day that the Market Participant settles with the client or Counterparty) and not the market settlement date.
(2) A Market Participant may reduce the contract value by the amount of 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 not the securities underlying the client purchase;
(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)