7A.01A.2F Application of the Connect Layer upon the declaration of Trigger Event
7A.01A.2F.1 The Connect Layer shall be applied in the following order of priority, with each source of funds to be exhausted before the next source is applied, to meet losses suffered by the Clearing House arising out of the management, including termination or liquidation, of the Connect Broker’s positions in the Connect Contract, when a Trigger Event has been declared, provided the Connect Counterparty’s collateral has been fully applied in accordance with Rule 7A.05.1.6:
a. first, the Clearing House Connect Layer First Loss Contribution;
b. second, the Clearing Member Connect Layer Contribution Requirement, in the manner set out in Rule 7A.01A.2G; and
c. third, any other Clearing House contribution to the Connect Layer.
7A.01A.2F.2 Where the Connect Layer has been exhausted and there are residual losses remaining, the Clearing Fund shall be applied in accordance with Rule 7A.01A.2B.2.
Added on 29 July 2022.