Examples of Defaulting SCM in a sentence
When an SCM defaults, SCMs are required to supply impartial expertise through the Rates Service DMG and to bid for the Auction Portfolios of the Defaulting SCM, as laid out in this Annex.
For example, porting of SwapClear Contracts and associated collateral from a Defaulting SCM to a Backup Clearing Member may be less likely to succeed in respect of an OSA compared with an ISA, or in respect of an Indirect Net Account compared with an Indirect Gross Account.
For the avoidance of doubt, the Clearing House will utilise the resources available to it pursuant to Rule 15 of the Default Rules for the purposes of making such a payment notwithstanding that other OTC Auction Portfolios and/or Basis Portfolios of the Defaulting SCM may not yet have been auctioned and that the loss attribution process provided for by Rule 2.6 of this Annex has not yet occurred.
All such registrations shall be made in a way that recognises the Collateral paid or received in respect of variation margin and any amounts paid or received in respect of settlement in relation to the Rates Service Contracts of the Defaulting SCM representing such new positions.
Where a Rule 26 Certificate is to be issued in respect of the Default of an SCM, the Clearing House may assume that no further recoveries will be made in respect of obligations of the Defaulting SCM beyond the value of its SwapClear Contribution.
The Clearing House will, in consultation with and with the assistance of the SwapClear DMG, reduce the market risk associated with a Defaulting SCM's obligations to the Clearing House so far as is reasonably practicable by hedging the Clearing House's exposure in open SwapClear Contracts to which the Defaulting SCM is party.
For example, the choice of an OSA may make it more difficult for Contracts and associated collateral to port from a Defaulting SCM to a Backup Clearing Member.