Content of rules
9(1)The rules must provide for all rights and liabilities of the defaulter under or in respect of unsettled market contracts to be discharged and for there to be paid by or to the defaulter such sum of money (if any) as may be determined in accordance with the rules.
(2)The rules must further provide—
(a)for the sums so payable by or to the defaulter in respect of different contracts to be aggregated or set off so as to produce a net sum;
(b)for that sum—
(i)if payable by the defaulter to the clearing house, to be set off against any property provided by or on behalf of the defaulter as cover for margin (or the proceeds of realisation of such property) so as to produce a further net sum, and
(ii)if payable by the clearing house to the defaulter to be aggregated with any property provided by or on behalf of the defaulter as cover for margin (or the proceeds of realisation of such property); and
(c)for the certification by or on behalf of the clearing house of the sum finally payable or, as the case may be, of the fact that no sum is payable.
10(1)The reference in paragraph 9 to the rights and liabilities of a defaulter under or in respect of an unsettled market contract includes (without prejudice to the generality of that provision) rights and liabilities arising in consequence of action taken under provisions of the rules authorising—
(a)the effecting by the clearing house of corresponding contracts in relation to unsettled market contracts to which the defaulter is a party;
(b)the transfer of the defaulter’s position under an unsettled market contract to another member of the clearing house;
(c)the exercise by the clearing house of any option granted by an unsettled market contract.
(2)A “corresponding contract” means a contract on the same terms (except as to price or premium) as the market contract, but under which the person who is the buyer under the market contract agrees to sell and the person who is the seller under the market contract agrees to buy.
This sub-paragraph applies with any necessary modifications in relation to a market contract which is not an agreement to sell.
(3)The reference in paragraph 9 to the rights and liabilities of a defaulter under or in respect of an unsettled market contract does not include, where he acts as agent, rights or liabilities of his arising out of the relationship of principal and agent.