Chapter 04 · Section 4.1

Protection Against Default

Let us now establish how the protection against default works. The clearing fund is only used to settle clearing members'claims if other funds available were not sufficient.

Which of the following will be used (if available) before the clearing fund?

a) The defaulting clearing member's margin deposit.
• b) Other clearing member's margin deposits.
  No. Other members margin deposits are only used if the clearing fund is not enough.

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