On Dec. 3, TAI FEX revised derivatives clearing enforcement rules.
TAI FEX issued notice on revisions to Rules governing OTC derivative clearing.
Document dated Dec. 3, 2024, received from TAI FEX Dec. 9, summarized on Dec. 12.
Details of Amendments
Introduced OTC derivatives centralized clearing, allowing customers to use securities as margin collateral, deposit them directly into clearing institution’s dedicated account.
Simplifies the process for FIs to report changes in transaction counterparties.
Clients can deposit, withdraw pledged securities with/from institution directly; associated dividends, interest, other benefits can also be transferred directly to clients.
Transaction errors not submitted via trade repository (TR) system will be corrected promptly, with clearing members notifying clients to rectify data when necessary.
Clients are required to delegate clearing members to complete application procedures.
Agreements between clients, clearing members enable TAI FEX to handle deposits, withdrawals, returns of non-pledgeable securities directly if deadlines are not met.
In client defaults, pledged securities move to the clearing member's margin account.
Effectiveness
The effective date will be announced later.
Dec. 16, 2024 Implementation Date
On Dec. 16, 2024, TAI FEX announced revision will be effective from Dec. 23, 2024.
It also issued standard contract template for client clearing and settlement of OTC derivative financial products, to align with Rules governing OTC derivative clearing.
