CLEARING RULES FOR FX MARKET AND PRECIOUS METALS MARKET OF CJSC JSCB NATIONAL CLEARING CENTRE

Transcription

1 APPROVED BY Resolution of the Supervisory Board of CJSC JSCB National Clearing Centre dated 25 April 2014 (Minutes No. 17) Chairman of the Supervisory Board of CJSC JSCB National Clearing Centre S.P. Lykov CLEARING RULES FOR FX MARKET AND PRECIOUS METALS MARKET OF CJSC JSCB NATIONAL CLEARING CENTRE Moscow, 2014

2 CONTENTS SECTION I GENERAL PROVISIONS 4 Article 1. Terms and definitions 4 Article 2. General Provisions 9 Article 3. Rights and obligations of the Clearing Members and the Clearing Centre 12 Article 4. Confidentiality 13 Article 5. Procedure for use of the Equivalent Handwritten Signature 13 Article 6. Clearing Registers 15 SECTION II. REQUIREMENTS FOR THE CLEARING MEMBERS 16 Article 7. Requirements to the Clearing Members 16 Article 8. Terms of Clearing Service. Procedure for admission to Clearing Service 17 Article 9. Procedure for registration of the Clearing Members and assignment to the Clearing Members of the Settlement Codes and Clearing Identifiers 20 Article 10. Procedure for suspension and cessation of admission to Clearing Service 24 SECTION III. CLEARING RISK MANAGEMENT MEASURES 27 Article 11. Clearing Risk Management Measures 27 Article 12. Single Limit and Risk Parameters 27 Article 13. Procedure for submission and fulfillment of the Risk Management Orders 31 SECTION IV. PROCEDURE AND TERMS OF ACCEPTANCE OF OBLIGATIONS FOR CLEARING 33 Article 14. Procedure for interaction with the Exchange during placement of orders and execution of the Trades 33 SECTION V. CLEARING PROCEDURE 37 Article 15. Collateral deposit and refund procedure 37 Article 16. Procedure for making and refund of the contributions to the Risk Covering Fund 40 Article 17. Procedure for holding of the clearing sessions 41 Article 18. Variation margin and Collateral Deposits 43 Article 19. Procedure for performance / cessation of the Trade Obligations and the obligations to refund Collateral Deposit 46 Article 20. Procedure for settlement of cases of non-performance or improper performance by the Clearing Members of the Trade Obligations and the Margin Calls 51 Article 21. Procedure for use and reimbursement for the guarantee funds 58 SECTION VI. SERVICE PAYMENT PROCEDURE. REPORTS ON CLEARING RESULTS 63 Article 22. Procedure for payment for services of the Clearing Centre, the Exchange, and the Technical Centre 63 Article 23. Procedure for submission of reports on clearing results 67 SECTION VII. OTHER TERMS AND CONDITIONS 69 2

3 Article 24. Transfer of obligations and collateral from one Clearing Member to another Clearing Member 69 Article 25. The order of the Clearing Member s inclusion in the list of organizations, which have been noticed to be related to the extremist activities or terrorism 72 Article 26. Procedure for settlement of the obligations in case of cessation of admission to Clearing Service 73 Article 27. Interaction with the Exchange in any circumstances that can affect trading 83 Article 28. Emergencies 83 Article 29. Dispute settlement procedure 85 Appendix No Appendix No Appendix No Appendix No Appendix No Appendix No

4 SECTION I GENERAL PROVISIONS These Clearing Rules for FX Market and Precious Metals Market of CJSC JSCB National Clearing Centre regulate any relations associated with settlement of the trades in FX and precious metals executed during the trading organized by OJSC Moscow Exchange. In case of changes to these Clearing Rules, including the adoption of the Clearing Rules in the new wording, the relevant changes from the day of coming into effect apply to the relations under the above trades executed prior to the enactment of relevant changes (new wording), and not fulfilled (terminated) by the day of entry into force of the amendments to the Clearing Rules. Article 1. Equivalent Handwritten Signature / EHS - Authentication - EurAsEC Bank - Non-Resident Bank - Exchange - Exchange Certificate - Collateral Deposit - State Corporation - Terms and definitions details of any electronic message sent using the Clearing System that identify a sender of such message, integrity and invariability of electronic messages based on the use of specialized hardware and software and organizational measures. The Equivalent Handwritten Signature is a Clearing Identifier that enables to explicitly identify the Clearing Member or the Clearing Centre sending the electronic message and reliably determine that it belongs to the Clearing Member or the Clearing Centre with such Clearing Identifier. a procedure used to confirm that the EHS belongs to the Clearing Member / Clearing Centre. a Non-Resident Bank registered in the Member State of the Eurasian Economic Community which has signed a Cooperation Agreement in the field of organization of an integrated currency market of the member states of the Eurasian Economic Community (hereinafter the International Treaty), which, in accordance with the International Treaty is entitled to conduct interbank conversion operations in the Russian Federation. a legal entity which is a Non-Resident, which, by virtue of a special permit (license or other document) issued by the competent authority of its registration country is authorized to conduct banking operations stipulated by the domicile law of the Non-Resident Bank. a trade organizer rendering services for organization of trading in foreign currency and precious metals pursuant to the Trading Rules. The Exchange is the Open Joint-Stock Company Moscow Exchange MICEX-RTS. a document provided by the Clearing Centre to the Clearing Member, which contains information on the Total Net Obligations and/or the Total Net Claims, and the obligation / claim of the Clearing Member regarding repayment of Collateral Deposits. a collateral of the Clearing Member or the Clearing Centre calculated in accordance with the procedure stipulated in the Clearing Rules and constituting the guarantee of performance of the obligations under the Trades executed between that Clearing Member and the Clearing Centre. a state corporation which, in compliance with the effective legislation 4

5 Settlement Date - Non-Defaulting Clearing Member - of the Russian Federation, has the right to carry out banking operations in the Russian Federation, including foreign currency purchase and sale. a date on which the Trade Obligations shall be performed in conformity with the terms of the Trade. a Clearing Member that properly performs its Total Net Obligations to the Clearing Centre. Cooperation Agreement - an Agreement of Cooperation at the Trading and Additional Sessions of the Unified Trading Session concluded between the Bank of Russia, the Exchange, and the Clearing Centre. Additional Collateral - an amount in Russian roubles by which the Single Limit of the Clearing Member is decreased; it is equal to the potential sum of costs of the Clearing Member in case of non-performance of its Total Net Obligations and conclusion of Swap Trades at the Additional Session of the second type between such Clearing Member and the Clearing Centre. Single Limit - a value calculated by the Clearing Centre in Russian roubles for each Clearing Member and limiting any market risks associated with the Trades executed between the Clearing Centre and the Clearing Member for which such Single Limit is calculated. Debt - outstanding obligations of the Clearing Member, including obligations under the Trades, obligations to pay commission fees, obligations to pay variation margin, obligations to pay the Collateral Deposits and/or other obligations specified in the Clearing Rules. Law on Clearing - Federal Law No.7-FZ On Clearing and Clearing Activities dated 07 February Total Net Obligation of the Clearing Member - Total Net Claim of the Clearing Member - Client - Clearing with full collateral - Clearing with partial collateral - Clearing System - obligations of the Clearing Member to the Clearing Centre in relevant currency or precious metal, not terminated by set-off during clearing in accordance with the Clearing Rules. claims of the Clearing Member against the Clearing Centre in relevant currency or precious metal, not terminated by set-off during clearing in accordance with the Clearing Rules. a legal entity or individual registered by the Exchange as a client of the Trading Participant. clearing of the Trade, which is conditioned on the presence of the Clearing Member s Collateral and/or claim of the Clearing Member for receipt of foreign currency / Russian roubles / precious metal with the Settlement Date of no later than the date of fulfillment of obligations under the executed trade, in the amount necessary to fulfill obligations under such Trade in full. clearing under the Trade, which is conditioned upon sufficiency of the Single Limit of the Clearing Member. a subsystem of the software and hardware complex of the Technical Centre that is a set of software and hardware tools, databases, telecommunication facilities, other equipment and software used by the Clearing Centre to perform clearing. 5

6 Clearing Broker - Clearing Identifier - Clearing Centre - Credit Organization - Limit Collateralized with the Fund s Resources - Margin Call - International Organization - Methods of Limitation of FX Market and Precious Metals Market Operations - Methods of Determination of FX Market and Precious Metals Market Risk Parameters - Defaulting Clearing Member - Non-Credit Organization - Non-Resident Non-Credit Organization - Non-Resident - Net Obligation of the Clearing Member - Net Claim of the Clearing Member - The Clearing Member performing the functions of the clearing broker in accordance with the Clearing Law and the Clearing Rules. a symbol explicitly defining the Clearing Member / Clearing Centre. CJSC JSCB National Clearing Centre acting under the clearing license and in compliance with the Law on Clearing. a Credit Organization which is a Resident. an amount in Russian roubles which increases the Single Limit of the Clearing Member, which is the Party to the Risk Covering Fund, and which is calculated in conformity with the Methods of Limitation of FX Market and Precious Metals Market Operations. a requirement of the Clearing Centre to the Clearing Member to post collateral for the obligations under the Trades executed by the Clearing Centre with the Clearing Member submitted in accordance with the procedure and in the cases determined in the Clearing Rules. a legal entity established in accordance with the International Treaty of the Russian Federation with the right to conduct banking operations, including currency operations, in the Russian Federation in accordance with the International Treaties of the Russian Federation and the legislation of the Russian Federation. an internal document of the Clearing Centre, which establishes the procedure for determination of the Limits Collateralized with the Fund s Resources, for the Clearing Members that are Risk Covering Fund members, and the Trading Limits of the Clearing Members determined by resolution of the Clearing Centre. an internal document of the Clearing Centre, which establishes the procedure for determination of Risk Parameters of the FX Market and Precious Metals Market of OJSC Moscow Exchange and price parameters of swap trades executed at the Additional Sessions. a Clearing Member that failed to perform or improperly performed its Total Net Obligations and/or Margin Call and/or that has an outstanding Debt to the Clearing Centre. a legal entity which is a resident and is not a Credit Organization. a legal entity which is a Non-Resident and has no right to conduct banking operations. a person which is a non-resident in accordance with the legislation of the Russian Federation on currency regulation and currency control. amount of cash in relevant currency / amount of the relevant precious metal, constituting an excess of obligations of the Clearing Member in this currency / in this precious metal under the Trades over its claims against the Clearing Centre in this currency / in this precious metal under the Trades, as determined for each Settlement Date. amount of cash in relevant currency / amount of the relevant precious metal, constituting an excess of claims of the Clearing Member in this currency / in this precious metal under the Trades over its obligations to the Clearing Centre in this currency / in this precious 6

7 Collateral - Password - NCC EDM Subsystem - Procedure for Presentation of Information and Reports - EDC Regulations - Trading Rules - Clearing Rules - Derivatives Market Clearing Rules - metal under the Trades, as determined for each Settlement Date. individual clearing collateral of the Clearing Member in Russian roubles (Collateral of the Clearing Member in Russian roubles) and/or cash of the Clearing Member in foreign currency and/or precious metals of the Clearing Member (Collateral of the Clearing Member in foreign currency and/or precious metals), which are used to secure performance of obligations of the Clearing Member under the Trades. Collateral is used to perform obligations of the Clearing Member under the Trades, and other obligations of the Clearing Member, specified in the Clearing Rules. a sequence used for authentication of the Clearing Member or the Clearing Centre. a Subsystem of the Electronic Document Management System of OJSC Moscow Exchange (hereinafter referred to as the EDMS of OJSC Moscow Exchange) the organizer of which is the Clearing Centre and which is used by the Clearing Centre to interact with the NCC EDM Subsystem members and the EDMS Organizer. The NCC EDM Subsystem is a totality of software, information and hardware of the Clearing Centre, the EDMS Organizer, and the NCC EDM Subsystem members. an internal document of the Clearing Centre that specifies composition, terms, and forms of presentation of information and reports by the Clearing Members to the Clearing Centre. Regulations for the Electronic Documents Management of CJSC JSCB National Clearing Centre effective Rules of Organized Trading at OJSC Moscow Exchange for the FX market and precious metals market. these Clearing Rules for FX Market and Precious Metals Market of CJSC JSCB National Clearing Centre. current Clearing Rules of CJSC JSCB National Clearing Centre for the derivatives market. Business Day - a day, including a day off or a public holiday, when the Exchange holds trading in foreign currencies and/or precious metals. Settlement Organization - NCO CJSC NSD and/or Bank of Russia, where the Clearing Centre has opened the clearing bank account to record the Collateral in Russian roubles and/or the clearing bank account to record the collective clearing collateral. Settlement Price - price used to calculate the variation margin under the swap contract / futures contract, determined in accordance with the Clearing Rules. Settlement Bank - a bank or a non-bank Credit Organization, including a foreign Credit Organization, where the Clearing Centre opened the correspondent account to record the Collateral in foreign currency. Operating Day - a day which is a Business Day and also a business day in the country of foreign currency issue, and a day, including a day off or a public holiday under the legislation of the Russian Federation, when the Settlement Organization makes settlement. The day when the 7

8 Position closing mode - Resident - Website of the Clearing Centre - Trade - Client Clearing Bank System - Refund Account - Collateral Account - Technical Centre - Trading Limit - Authorized Trading Participant - Exchange does not conduct trading for any instrument in such currency / precious metal with the Obligations Settlement Date falling onto the trading day does not constitute the Operating Day. limitation of the Settlement Code(s) set by the Clearing Centre in respect of the Clearing Member, where trades may be concluded by the Clearing Member, leading only to an increase in the Single Limit of such Clearing Member. a legal entity which is a resident in accordance with the RF legislation on currency regulation and currency control. a website where the Clearing Centre places its information. each of the trades in foreign currency / precious metal executed at the trading at the Exchange, including the spot transaction, swap transaction, swap contract, or futures contract. an automated remote banking and clearing service system designed to perform electronic document interchange between the Clearing Members and the Clearing Centre. account registered in the Clearing Centre and intended for receipt of cash in relevant currency / the relevant precious metals in order to perform the obligations of the Clearing Centre in respect of refunding of cash / precious metals to the Clearing Member. The Account for Cash Refund may be the account of the Clearing Member / Client opened with the bank in the Russian Federation or in the bank outside the Russian Federation. The Account for return of precious metals may be the numbered metal account opened in the Clearing Centre by the Clearing Member bank having a license to attract and invest deposits in precious metals, or the numbered metal account of the Clearing Member in the bank which opened in the Clearing Centre the numbered metal account and has a license to attract and invest deposits in precious metals. numbered metal account of the Clearing Member, opened in the Clearing Centre and intended to record the Collateral of the Clearing Member in the relevant precious metal. Open Joint-Stock Company Moscow Exchange MICEX-RTS that provides the Clearing Members with technical access to the Clearing System under the relevant agreement. an amount (in Russian roubles) limiting the funds of the Clearing Member taken into account in calculation of the Single Limit of the Clearing Member; it is determined upon request of the Clearing Member or by resolution of the Clearing Centre in the cases and in accordance with the procedure stipulated in the Clearing Rules. the Clearing Member providing cash to the Clearing Centre by executing between itself and the Clearing Centre the swap trades at the Additional Session of the second type in accordance with the Clearing Rules for the purpose of performance by the Clearing Centre of its obligations under the Trades to the Non-Defaulting Clearing 8

9 Clearing Member - Risk Covering Fund - Members, and for the purpose of performance by the Clearing Centre of its obligations at other markets where the Clearing Centre performs functions of a clearing organization and/or central counterparty. a legal entity to which the Clearing Centre renders clearing services under the Clearing Agreement concluded with the former. collective clearing collateral (Guarantee Fund), formed by the Clearing Centre out of contributions of the Clearing Members, received into the Risk Covering Fund by resolution of the Clearing Centre. Any term not expressly defined in these Clearing Rules shall have the meaning determined by other internal documents of the Clearing Centre, including the Derivatives Market Clearing Rules, Methodology for Determination of Risk Parameters of the FX Market and Precious Metals Market, internal documents of the Exchange, Trading Rules, Specifications, laws, regulatory acts of the Bank of Russia in the financial markets field, and other regulatory legal acts of the Russian Federation. Article 2. General Provisions 2.1. The Clearing Centre performs clearing acting as a central counterparty for all Trades whereunder the party is a Clearing Member The Clearing Centre performs clearing with partial collateral and clearing with full collateral The Clearing Centre is entitled to issue resolution on performance of clearing solely with full collateral for certain instruments The Clearing Centre performs clearing with partial collateral under the Trades executed by the Category B Clearing Members for the instruments in whose respect the Clearing Centre did not issue resolution on performance solely of the clearing with full collateral The Clearing Centre performs clearing with full collateral for the lot currency and mated currency: under the Trades executed by the Category C Clearing Members; under the Trades executed by the Category B Clearing Members for the instruments in whose respect the Clearing Centre issued resolution on performance solely of the clearing with full collateral The Clearing Centre is entitled to set for a certain foreign currency / precious metal the attribute "Ban on Short Selling". Setting of the attribute "Ban on Short Selling" means that under the Trades with such foreign currency / precious metal only clearing with full collateral for such foreign currency / precious metal is performed To ensure performance of the obligations accepted for clearing, the Clearing Centre shall use the individual Clearing Collateral of the Clearing Members in Russian roubles, the collective Clearing Collateral (guarantee fund), and the Collateral of the Clearing Members in foreign currency and precious metals. 9

10 2.8. The Collateral of the Clearing Member in foreign currency and precious metals is the property transferred by the Clearing Member to the Clearing Centre to ensure performance of the Trade Obligations of the Clearing Member to the Clearing Centre in accordance with the Clearing Rules, to perform the obligations of the Clearing Member to the Clearing Centre under the Trades, and to ensure performance of the Net Obligations of the Clearing Member in accordance with the procedure and in the cases stipulated in Article 24 hereof The maximum proportion of foreign currency accepted as Collateral of the Clearing Member shall be 100%. The maximum proportion of precious metals accepted as Collateral of the Clearing Member shall be 100% The individual Clearing Collateral in Russian roubles (Collateral of the Clearing Members in Russian roubles) shall be kept on the clearing bank account of the Clearing Centre opened with the Settlement Organization and designed to record the individual Clearing Collateral The collective Clearing Collateral (guarantee fund) shall be kept on the clearing bank account of the Clearing Centre opened with the Settlement Organization and designed to record the collective Clearing Collateral The Collateral of the Clearing Members in foreign currency shall be kept on the correspondent accounts of the Clearing Centre opened with the Settlement Banks Collateral of the Clearing Member in precious metals is recorded at the Collateral Accounts of the Clearing Members Registration of obligations and Collateral of the Clearing Member in precious metals is performed in grams The information on the details of clearing accounts of the Clearing Centre designed to record the individual or collective Clearing Collateral and the details of correspondent accounts of the Clearing Centre opened with the Settlement Banks and designed to record the Collateral in foreign currency shall be placed on the Website of the Clearing Centre. The Clearing Centre shall notify the Clearing Members of any changes in the details of such accounts by sending new details in form of electronic document and by placing relevant information on the Website of the Clearing Centre not later than 3 (three) business days prior to putting those changes into effect, if other time period for notification about the change of details of the specified accounts has not been set by resolution of the Clearing Centre The Clearing Centre shall be entitled to use for its own benefit any funds constituting individual and collective Clearing Collateral and the Collateral of the Clearing Members in foreign currency, subject to the limitations stipulated in the internal document of the Clearing Centre that determines the criteria for allocation of temporarily available cash of the Clearing Centre. Any profit from such use of the funds constituting individual and collective Clearing Collateral and the Collateral of the Clearing Members in foreign currency shall not be included in the individual and collective Clearing Collateral. 10

11 2.16. Electronic documents shall be exchanged between the Clearing Member and the Clearing Centre via the EDM NCC Subsystem and/or the Client Clearing Bank System and/or SWIFT System (in the cases stipulated in the Clearing Rules). The procedure for drawing up and sending electronic documents via the EDM NCC Subsystem is provided by the EDM Procedure and the Agreement on Exchange of Electronic Documents concluded between the Clearing Member and the Clearing Centre. The procedure for drawing up and sending electronic documents via the Client Clearing Bank System is provided by the Agreement of Participation in the Client Clearing Bank System of CJSC JSCB National Clearing Centre concluded between the Clearing Member and the Clearing Centre. The electronic documents sent via the NCC EDM Subsystem shall be drawn up in the format determined in accordance with the EDM Procedure. The electronic documents sent via the Client Clearing Bank System shall be only drawn up by means of the Client Clearing Bank System in the format supported by the software of the Client Clearing Bank System. The electronic documents sent via SWIFT System shall be drawn up in the formats determined by SWIFT standards subject to any features stipulated in internal documents of the Clearing Centre. In case of any discrepancies in the information contained in the electronic document sent via the EDM NCC Subsystem, the electronic document sent via the Client Clearing Bank System, and the electronic document sent via SWIFT System, the Clearing Member and the Clearing Centre shall be primarily guided by the information contained in the electronic document sent via the EDM NCC Subsystem, secondly via the Client Clearing Bank System, and thirdly via SWIFT System The documents sent by the Clearing Member to the Clearing Centre via the Clearing System constitute electronic messages signed with the EHS of the Clearing Member. The documents and the information received by the Clearing Member from the Clearing System constitute electronic messages signed with the EHS of the Clearing Centre. The procedure for use of the EHS is determined in Article Ошибка! Источник ссылки не найден. hereof Formats of electronic documents submitted by the Clearing Members to the Clearing Centre in accordance with the Clearing Rules and by the EDM Procedure, and the forms of any hard-copy documents submitted by the Clearing Members to the Clearing Centre in accordance with the Clearing Rules are stipulated in the document Forms and formats of the documents submitted by the Clearing Members in accordance with the Clearing Rules for FX Market and Precious Metals Market of CJSC JSCB National Clearing Centre placed on the Website of the Clearing Centre The Clearing Centre interacts with the Exchange in accordance with the concluded agreement, determining the procedure and terms of cooperation in case of organization by the Exchange of the trading in foreign currency and precious metals, and also in case of performance by the Clearing Centre of the clearing and other functions, associated with performance of clearing under the Trades executed during trading at the Exchange There are the following categories of the Clearing Members: A-Category Clearing Members, B-Category Clearing Members, and C-Category Clearing Members. 11

12 Category A Clearing Member is the Bank of Russia, as well as other entities which, in accordance with the Law on Clearing are not required to transfer the property into the individual and collective clearing collateral. Category B Clearing Members are the Clearing Members admitted for clearing with partial collateral and not being the Category A Clearing Members. Category C Clearing Members are the Clearing Members not admitted for clearing with partial collateral and not being Category A Clearing Members The provisions of the Clearing Rules apply to the Category A Clearing Members, unless otherwise stipulated by the contract concluded between the relevant Category A Clearing Member and the Clearing Centre. Article 3. Rights and obligations of the Clearing Members and the Clearing Centre 3.1. The rights and obligations of the Clearing Members and the Clearing Centre are stipulated in the Clearing Agreement and the Clearing Rules of the Clearing Centre The form of the Clearing Agreement is determined by Appendix No. Ошибка! Источник ссылки не найден. hereto The Clearing Agreement shall be concluded by accession to the agreement terms and conditions of which are stipulated in the Clearing Rules of the Clearing Centre The payment for clearing services rendered by the Clearing Centre to the Clearing Members in compliance with the Clearing Rules is fixed by the FX Market and Precious Metals Market Rate Schedule of the Clearing Centre that are Appendix No. 0 hereto (hereinafter referred to as Tariffs of the Clearing Centre) The procedure for payment for clearing services of the Clearing Centre is determined in Article 22 hereof Clearing services of the Clearing Centre shall be deemed duly rendered if, within 5 (five) business days after the end of the month during which such services were rendered, the Clearing Member does not notify in writing of the opposite The Clearing Member shall be entitled to cancel the Clearing Agreement if only it does not have any liabilities under such Agreement and outstanding obligations accepted for clearing notifying the Clearing Centre in writing not later than 5 (five) days prior to the date of termination of the Clearing Agreement The Clearing Centre shall be entitled to cancel the Clearing Agreement concluded with the Clearing Member in case of breach by the Clearing Member of any requirements imposed on it by the Clearing Rules of the Clearing Centre The Clearing Centre shall be entitled to cancel the Clearing Agreement concluded with the Clearing Member if, within 6 (six) months from the date of conclusion of such Agreement, the Clearing Member did not receive admission to Clearing Service, or, within 6 (six) months in a row, the Clearing Member did not have admission to Clearing Service under no Clearing Rules of the Clearing Centre due to suspension / cancellation / non-receipt of admission to Clearing Service. 12

13 3.10. The Clearing Agreement shall be terminated in the following cases: 1) cancellation of admission of the Clearing Member to Clearing Service in conformity with all Clearing Rules of the Clearing Centre under which the Clearing Member was accepted for clearing Service; 2) liquidation of the Clearing Member and reorganization of the Clearing Member, provided that its activities are ceased following such reorganization; 3) revocation of the license of the Clearing Member for banking operations (for Credit Organizations); 4) revocation (cancellation) of the special permission (license or other document) issued by the Central (National) Bank or other competent authority of the Non- Resident Bank s country that, in accordance with the legislation of the Non- Resident Bank s country, performs currency regulation and bank supervision (hereinafter referred to as the Competent body) under which the Non-Resident Bank shall have the right to carry out banking operations contemplated by the personal law of the Non-Resident Bank (for Non-Resident Banks, including EurAsEC Banks) Termination of the Clearing Agreement shall not exempt the Clearing Member and the Clearing Centre from performance of the obligations occurring prior to termination of the Clearing Agreement For the Clearing Member - Non-Resident Bank, International Organization or for individual category of legal entities, the applicable law regulating the Clearing Agreement and relevant relations of the Clearing Member and the Clearing Centre shall be the legislation of the Russian Federation. Article 4. ConfidentialityThe Clearing Member and the Clearing Centre shall be obliged to treat the content of the Clearing Agreement and the terms of the executed Trades as confidential information and shall not disclose it to any third parties (except for the auditors of the Clearing Member and the Clearing Centre, authorized public bodies, Clients for whose benefit such Trades are executed, and cases of information disclosure in compliance with the effective legislation of the Russian Federation) unless otherwise specifically agreed upon between the Clearing Member and the Clearing Centre Any documents submitted and prepared by the Clearing Member and/or the Clearing Centre for performance of the Clearing Agreement and the Trades executed as part of the Clearing Agreement shall be treated as confidential The Clearing Members agree that the Clearing Centre, under the Cooperation Agreement, provides the Bank of Russia upon its request with the information on clearing process and results. Article 5. Procedure for use of the Equivalent Handwritten Signature 5.1. The Equivalent Handwritten Signature shall be used to send via the Clearing System the electronic messages stipulated by the Clearing Rules. The electronic message signed with the EHS shall be considered the electronic document equivalent to any hard-copy document signed by the authorized representative of the Clearing Member / Clearing Centre. 13

14 5.2. The Clearing Centre shall ensure safety and integrity of any electronic messages of the Clearing Member and the Clearing Centre after applying several organizational and technical measures Any electronic message shall be deemed signed with the EHS from the moment of sending by the Clearing Member / Clearing Centre to the Clearing System of such electronic message under condition of successful authentication of the Clearing Member / Clearing Centre as stipulated in this Section The Clearing Identifier shall be assigned to the Clearing Member or the Clearing Centre by the Clearing Centre. The procedure for assignment of the Clearing Identifier to the Clearing Member is stipulated in clause 9.4 hereof. Inclusion of the information on the Clearing Identifier of the Clearing Member in the daily Report of Clearing Identifiers shall be deemed the notification of assignment of the Clearing Identifier to the Clearing Member. The data on any assigned Clearing Identifiers shall be deemed confidential. The Clearing Member and the Clearing Centre shall ensure observance of confidentiality requirements and bear the risk of any consequences related to violation of such requirements Authentication shall be conducted by the Technical Centre via the Clearing System with technical access of the Clearing Member or the Clearing Centre to the Clearing System using the remote working place of the Clearing Member or the Clearing Centre by comparing the entered Clearing Identifier and password with the relevant Clearing Identifier and password of the Clearing Member / Clearing Centre the information on which contains in the Clearing System database. In case of successful authentication, the Clearing Member / Clearing Centre shall be allowed to carry out operations in the Clearing System Upon sending any electronic messages signed with the EHS, the Technical Centre via the Clearing System shall identify a person signing the electronic message by comparing the EHS contained in the electronic message with the Clearing Identifier assigned to the Clearing Member / Clearing Centre the information on which contains in the Clearing System database The Clearing Member and the Clearing Centre shall agree that the Clearing Centre can make hard copies of the electronic messages signed with the EHS which shall be certified by signature of the authorized representative of the Clearing Centre and be indisputable evidence of sending the electronic message via the Clearing System, and shall confirm compliance of the electronic message with the content of the hard copy of such electronic message Upon written request of the Clearing Member, the Clearing Centre shall provide the Clearing Member with a hard copy of any electronic message sent by (to) the Clearing Member. The request of the Clearing Member shall contain a date of sending electronic messages or a period of time within which such electronic messages are sent The Clearing Member and the Clearing Centre shall agree that all disputes regarding use of the EHS shall try to settle out of court. 14

15 5.10. In case of any disputes regarding use of the EHS, the technical expertise shall be conducted in conformity with Appendix No. 0 hereto If following such technical expertise conducted in conformity with Appendix No. 0 hereto any dispute cannot be settled, such dispute shall be subject to examination as stipulated in Article 29 hereof. Article 6. Clearing Registers 6.1. The Clearing Centre shall perform internal recording provided for by the Law on Clearing in clearing registers. The Clearing Registers shall be kept by the Clearing Centre in the Clearing System In the Clearing Registers the Clearing Centre shall record: the Single Limit of each Clearing Member; the Limit, collateralized with the Fund resources, of each Clearing Member for which the stipulated Limit is fixed; the Trading Limit of each Clearing Member for which the stipulated Trading Limit is fixed; the liabilities and the claims of the Clearing Member on each Trade Obligation accepted for clearing; totality of Risk Management Orders; obligations of the Clearing Members and the Clearing Centre for payment of variation margin / Collateral Deposits; the obligations of the Clearing Members and the Clearing Centre regarding refund of the Collateral Deposits; the Net Obligation / Net Claim of the Clearing Member on each Settlement Date in each currency and each precious metal; the Total Net Obligation / Total Net Claim of the Clearing Member in each currency and each precious metal; the Collateral of the Clearing Member in each currency and each precious metal; the Margin Call of the Clearing Member (if any). Such recording shall be performed by the Clearing Centre in terms of Settlement Codes of the Clearing Member For each Clearing Member the Clearing Centre shall also record its contribution to the Risk Covering Fund The procedure for keeping the Clearing Registers is determined in the relevant Articles of Sections 0 and 0 hereof. 15

16 SECTION II. REQUIREMENTS FOR THE CLEARING MEMBERS Article 7. Requirements to the Clearing Members 7.1. For conclusion of the Clearing Agreement the legal entity shall submit to the Clearing Centre: the Clearing Agreement in the form stipulated in Appendix No. Ошибка! Источник ссылки не найден. hereto in 2 (two) copies signed and sealed by the authorized representative of the legal entity; the documents in accordance with the list stated in Appendix No. 0 hereto. If any of the documents stated in Appendix No. 0 hereto was submitted to the Clearing Centre before and is available for the Clearing Centre, the legal entity, upon prior agreement with the Clearing Centre, can be exempted from the obligation to resubmit such document The legal entity shall be obliged to submit other documents that, if necessary, may be requested by the Clearing Centre for the purposes not contradictory to the effective legislation of the Russian Federation If the legal entity and the Clearing Centre have already concluded the Clearing Agreement in the form stipulated in Appendix No. Ошибка! Источник ссылки не найден. hereto to perform Clearing Service in compliance with other clearing rules of the Clearing Centre, conclusion of the new Clearing Agreement in compliance with these Clearing Rules is not required The Clearing Member shall be obliged to annually present to the Clearing Centre the Questionnaire of the Clearing Member (Client) (Registration Card) in form of electronic document. In case of change in the data contained in the Questionnaire of the Clearing Member (Client) (Registration Card) or other documents submitted to the Clearing Centre, the Clearing Member shall be obliged within 5 (five) business days after such changes to present to the Clearing Centre the Questionnaire of the Clearing Member (Client) (Registration Card), containing updated information, in form of electronic document, and the relevant documents confirming such changes. The forms of submission of the Questionnaire of the Clearing Member (Client) (Registration Card) by the Clearing Member are determined in accordance with the procedure for Presentation of Information and Reports Concurrently with annual submission to the Clearing Centre of the Questionnaire of the Clearing Member (client) (Registration Card), the Clearing Member shall furnish the Clearing Centre with Comments on business reputation certified with signatures of authorized persons and seals of legal entities issuing the same. The Clearing Member presents the Comments on business reputation from other Clearing Members of the Clearing Centre, having business relations with the latter, and (or) Comments on business reputation from Credit Organizations, which are or were previously providing services to the Clearing Member. The lists of the Clearing Members are disclosed on the website of the Clearing Centre. In case of impossibility to obtain comments on business reputation, the Clearing Member submits to the Clearing Centre a letter informing of such impossibility. 16

17 7.6. To confirm its financial position, the Clearing Members of the categories B and C shall be obliged within the entire term of the Clearing Agreement to submit to the Clearing Centre the reports in conformity with Appendix No. Ошибка! Источник ссылки не найден. hereto. To estimate financial position of the Clearing Member, the Clearing Centre shall be entitled to require from the Clearing Member any additional information and reports not stated in Appendix No. Ошибка! Источник ссылки не найден. hereto. Article 8. Conditions of Clearing Service. Procedure for admission to Clearing Service 8.1. Admission to Clearing Service in accordance with the Clearing Rules shall be provided to the Clearing Member that meets the requirements stipulated by clause 8.2 and/or 8.3 of the Clearing Rules, on the basis of the relevant Application on admission to clearing services The Category C Clearing Member is the Clearing Member meeting the following requirements: to have the effective Clearing Agreement concluded with the Clearing Centre; has a valid contract/contracts concluded with the Technical Centre and ensuring technical access to the Clearing System, and has installed the software necessary for clearing services, conforming to the requirements established by the Technical Centre; to have the effective license for banking operations issued by the Bank of Russia (for Credit Organizations); to have the special permission (license or other ground) issued by the competent body of the state of incorporation of the Non-Resident Bank under which the Non-Resident Bank has the right to carry out banking operations (contemplated by the personal law of the Non-Resident Bank (for Non-Resident Banks); to be a member of the EDM NCC Subsystem; to meet the requirements of the Clearing Centre on presentation of information and reports stipulated in clauses hereof; to meet the requirements of the Clearing Centre on financial stability of the Clearing Member stipulated in clause 8.4 hereof; Clearing Member - Non-Credit Organization - to have equity of not less than 180,000,000 (one hundred and eighty million) roubles; has provided to the Clearing Centre the details of the Refund Accounts for the main Settlement Code of the Clearing Member in accordance with the procedure stipulated by the clause 4) of the subclause of the Clearing Rules; If the Clearing Member only plans to get Clearing Services through its branch(es), the Clearing Member shall only provide payment details of its branch(es) The Category B Clearing Member is the Clearing Member meeting the following requirements (along with the requirements stipulated by the clause 8.2 of the Clearing Rules): in its activities not to be financially unstable and/or not to have any information that makes possible a deterioration of its financial position and/or its failure to timely and fully perform its obligations on the Trades, Margin Calls, and/or other obligations arising 17

18 from of the Clearing Rules The Non-Resident Clearing Member not being the EurAsEC Bank shall have a rating not lower than the next level under the international scale of long-term solvency for obligations in Russian roubles or in foreign currency: Standard & Poor s "BBB"; Moody s Investors Service "Baa2"; Fitch Ratings "BBB" The Clearing Member shall be obliged to meet the following requirements on financial stability: In the Clearing Member s activities there shall be no grounds for bankruptcy prevention measures in accordance with legislation of the Russian Federation on insolvency (bankruptcy) or in accordance with personal law of the Clearing Member; the Credit Organizations and Non-Resident Banks - to comply with the mandatory regulations of the Bank of Russia adopted for Credit Organizations, or mandatory regulations adopted by the competent body of the state of incorporation of the Non- Resident Bank (if such mandatory regulations are adopted in accordance with the national legislation of the state of incorporation of the Non-Resident Bank); in the activities of the Clearing Members - Credit Organizations there shall be no grounds for revocation by the Bank of Russia of the license for banking operations in accordance with legislation of the Russian Federation on banking activities; and in the activities of the Clearing Members - Non-Resident Banks there shall be no grounds for revocation of the license for banking operations in accordance with personal law of the Non-Resident Bank The Clearing Members shall be obliged to meet the requirements stated in clauses hereof within the entire term of admission to Clearing Service in accordance with the Clearing Rules. The Clearing Members shall be obliged to immediately notify the Clearing Centre of their failure to meet such requirements The Clearing Centre shall be entitled not to provide admission to Clearing Service for the Clearing Members of categories B and C that fail to meet the following requirements: the Credit Organizations - to have in their balance sheet as of the latest reporting date any positive financial result of the current year determined as the difference between the remaining amount available on the current year revenue accounts and the remaining amount available on the current year expenditure accounts; the State Corporations, International Organizations, Non-Credit Organizations - to have in their balance sheet as of the latest reporting date any positive financial performance result determined as profit after taxation; the Non-Residents - to have in their financial reports as of the latest reporting date any positive financial performance result determined as profit after taxation The Clearing Centre is entitled to provide to the Clearing Member access to clearing services whether for all instruments, or for a limited list of instruments. 18

19 8.8. The Clearing Centre is entitled to determine the specifics of application of requirements in respect of admission to clearing services for certain categories of legal entities, including the same for the Non-Resident Banks, subject to the provisions of the relevant International Treaty, for International Organizations - subject to the provisions of the relevant international agreement Admission to Clearing Service shall be provided to the Clearing Member by the Clearing Centre not later than within 5 (five) business days after performance by the Clearing Member of the requirements and terms stipulated in this Article hereof. The Clearing Centre shall notify the Clearing Member and the Exchange of provision of the Clearing Member with admission to Clearing Service not later than on the Business Day following the day of provision of admission to Clearing Service by submitting the relevant notifications in form of electronic document For execution of the trades of purchase and sale of precious metals, the Clearing Member should open the Collateral Account in the relevant precious metal The right of participation in the Risk Covering Fund shall be assigned to the Credit Organizations, State Corporations, and International Organizations. If the Clearing Member is intended to participate in the Risk Covering Fund, it shall be obliged to submit the Application for Participation in the Risk Covering Fund to the Clearing Centre The own capital of the Clearing Members, that are or intend to become participants of the Risk Covering Fund, calculated at the moment of entry into the Risk Covering Fund, within the entire term of participation in the Risk Covering Fund shall equal not less than 400,000,000 (four hundred million) Russian roubles, except for the non-banking Credit Organizations, whose own capital shall equal 200,000,000 (two hundred million) Russian roubles The Clearing Centre shall examine the Application for Participation in the Risk Covering Fund received from the Clearing Member and take its decision on admission or nonadmission of the Clearing Member to the Risk Covering Fund. The Clearing Centre shall notify the Clearing Member of admission or non-admission to the Risk Covering Fund within 2 (two) business days after taking of such decision by sending the information letter to the Clearing Member in form of electronic document The Clearing Centre shall be entitled to take its decision on termination of participation of the Clearing Member in the Risk Covering Fund in case of violation of the requirements for participation in the Risk Covering Fund stipulated in the Clearing Rules. The Clearing Centre shall notify the Clearing Member of termination of its participation in the Risk Covering Fund and the date of termination of its participation in the Risk Covering Fund not later than on the Business Day following the day of taking of such decision by sending the information letter to the Clearing Member in form of electronic document The Clearing Members shall be obliged, upon request of the Clearing Centre, not later than on the following Business Day after receipt of the request, to provide to the Clearing Centre the information containing: data on presence or absence of outstanding obligations of the Clearing Member to 19