Detailed aspects of Abaxx Clearing’s default management procedures are set out in Rule 612 of the Abaxx Clearing Rulebook.

In the extreme event of default declaration, the clearinghouse may, subject to the relevant provisions of the SFA, take immediate action to exercise its rights in relation to the following to satisfy the defaulting Clearing Member’s obligations on a best endeavors basis:

• Act to neutralise portfolio risk, by transferring customer positions to non-defaulting Clearing Members to close out defaulted member’s positions; 
• Auction and/or liquidate the portfolios to protect the integrity of the clearinghouse and mitigate potential exposure to non-defaulting Clearing Members.