Abaxx Clearing has established its rules in accordance with the obligations and protections set out in the Securities and Futures Act (SFA), Division 4 of Part 3, which applies specifically to Approved and Recognised Clearing Houses.

In the unlikely occasion where an Event of Default is declared by Abaxx Clearing, the defaulting member shall be deemed to be in breach of its obligations to Abaxx Clearing.

Detailed procedures are set out in Rule 612 of the Abaxx Clearing Rulebook. 

Default Declaration Circumstances

• Failure to meet financial or payment obligations
• Notification that the Clearing Member has lost, or is at risk of losing, required licenses
• Notification of insolvency or similar proceedings

Default Management Procedures

In the extreme event of a default declaration, and subject to the relevant provisions of the SFA, Abaxx Clearing may take immediate action to exercise its rights to satisfy the obligations of the defaulting Clearing Member on a best-efforts basis. These actions include:

• Neutralising portfolio risk by transferring customer positions to non-defaulting Clearing Members or otherwise closing out the defaulting member's positions
• Auctioning or liquidating portfolios to protect the integrity of the clearinghouse and mitigate potential exposure to non-defaulting Clearing Members