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7.04.1B Trades matched on Connect Market

7.04.1B.1 Trades matched on Connect Market cleared by two Clearing Members

When a Connect Contract matched on a Connect Market is to be cleared by two Clearing Members of the Clearing House, upon matching of the Connect Contract on the Connect Market, two separate and distinct Contracts will be created as described below, both of which based on the same terms as the original Connect Contract:
a. the Clearing Member who assumes the position of the buyer shall enter into a Contract with the Clearing House, which assumes the position of the seller, and
b. the Clearing Member who assumes the position of the seller shall enter into a Contract with the Clearing House, which assumes the position of the buyer.
7.04.1B.2 Clearing Members shall at all times be solely liable to the Clearing House in respect of all clearing and settlement obligations arising out of the Contracts created in Rule 7.04.1B.1.
7.04.1B.3 Trades matched on Connect Market cleared by a Clearing Member and where only one of the counterparties to the trade is a Clearing Member

When a Connect Contract matched on a Connect Market is to be cleared by a Clearing Member and where only one of the counterparties to the trade is a Clearing Member, upon matching of the Connect Contract on the Connect Market, two separate and distinct Contracts will be created as described below, both of which based on the same terms as the original Connect Contract:
a. a Contract between the Clearing Member and Clearing House, wherein:
i. the Clearing House assumes the position of the buyer if the Clearing Member assumes the position of the seller, and conversely,
ii. the Clearing House assumes the position of the seller if the Clearing Member assumes the position of the buyer; and
b. a Contract between the Connect Broker and the Clearing House, wherein:
i. the Connect Broker assumes the position of the buyer if the Clearing House assumes the position of the seller, and conversely,
ii. the Connect Broker assumes the position of the seller if the Clearing House assumes the position of the buyer.
7.04.1B.4 Clearing Members and the Connect Broker shall at all times be solely liable to the Clearing House in respect of all clearing and settlement obligations arising out of the Contracts created in Rule 7.04.1B.3.
7.04.1B.5 The events described under Rule 7.04.1B shall be deemed not to have taken place if the Clearing House has received corrupt or unreadable data in respect of the original contract, or if the original contract is based on a series that is not eligible for clearing, or such trades are cancelled by the Connect Exchange or not cleared by the Connect Counterparty. Clearing Members will be notified in such instances.

Added on 29 July 2022.