§ 4.—(1) The rules may make the same or similar provision in relation to designated non-members as in relation to members of the exchange.
§ (2) If such provision is made, the exchange must have adequate procedures—
- (a) for designating the persons, or descriptions of person, in respect of whom action may be taken,
- (b) for keeping under review the question which persons or descriptions of persons should be or remain so designated, and
- (c) for withdrawing such designation.
§ (3) The procedures shall be designed to secure that a person is not or does not remain designated if failure by him to meet his obligations in respect of one or more market contracts would be unlikely adversely to affect the operation of the market, and that a description of persons is not or does not remain designated if failure by a person of that description to meet his obligations in respect of one or more market contracts would be unlikely adversely to affect the operation of the market.
§ (4) The exchange must have adequate arrangements—
- (a) for bringing a designation or withdrawal of designation to the attention of the person or description of persons concerned, and
- (b) where a description of persons is designated, or the designation of a description of persons is withdrawn, for ascertaining which persons fall within that description.'.
§
No. 175, in page 287, line 23, leave out sub-paragraph (1) and insert—
'(1) The clearing house must have default rules which, in the event of a member of the clearing house appearing to be unable to meet his obligations in respect of one or more market contracts. enable action to he taken to close out his position in relation to all unsettled market contracts to which he is a party.'.
§ No. 176, in page 287, line 40, after `by' insert 'or on behalf of'.
§ No. 177, in page 287, line 44, after `by' insert 'or on behalf of'.
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§
No. 178, in page 288, line 16, at end insert—
'(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.'.
§ No. 179, in page 288, line 32, leave out paragraph 14 and insert—
§ '14.—(1) The rules of the clearing house must provide that, in the event of a default, margin provided by the defaulter for his own account is not to be applied to meet a shortfall on a client account.
§ (2) This is without prejudice to the requirements of any relevant regulations under section 55 of the Financial Services Act 1986 (clients' money).'.
§
No. 180, in page 289, line 3, leave out paragraph 15 and insert—
`15.—(1) The rules and practices of the body, together with the law of the country in which the body's head office is situated, must be such as to provide adequate procedures for dealing with the default of persons party to market contracts connected with the body.
§ (2) The reference in sub-paragraph (1) to default is to a person being unable to meet his obligations.'.—[Mr. Redwood.]