The final section of the Rulebook is the default rules (procedures). Where a member firm is not able to fulfil its on Exchange market contracts and is deemed to be in default, the Exchange will apply its default rules accordingly.
The operation of the Exchange's default procedures, in accordance with the provisions of the Companies Act 1989, is designed to produce a net sum calculation of the liabilities owed to and by the defaulter acting as principal with respect to each of its counterparties to unsettled non CCP on-Exchange trades.
Where the defaulter was acting in an agency capacity the Exchange will contact the defaulter's customer or counterparty and the non-defaulting member firm and will require them to settle the contract as dealt.
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