Chapters
Rule 815

Application of Funds

In the event of a Clearing Member default, all such Clearing Member's segregated customer accounts shall be auctioned according to Clearinghouse procedures. The financial amounts, if any, resulting from such auction shall be applied as follows to reduce or any eliminate any financial shortfall:

  1. Defaulting Clearing Member. First, the financial amounts generated from the auction shall be applied to cover the shortfall. The Clearinghouse may make immediate demand upon any guarantor of the defaulting Clearing Member.

  2. Clearinghouse. Second, the Clearinghouse Guaranty Fund contribution shall be applied to cover any remaining shortfall.

  3. Non-Defaulting Clearing Members. Third, each non-defaulting Clearing Member's guaranty fund contribution, if any, shall be assessed up to a maximum of $1,000,000 of the remaining shortfall and Guaranty Fund replenishment based on each Clearing Member's pro rata share of Margin requirements in relation to the Clearinghouse's aggregate Margin requirements. A Clearing Member that does not satisfy any such assessment shall be in default.

  4. Contract Extinguishment. Fourth, the Clearinghouse may partially or fully extinguish of Contracts.

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