Capital requirements for bank exposures to central counterparties: Difference between revisions

:The client must have conducted a sufficient legal review (and undertake such further review as necessary to ensure continuing enforceability) and have a well-founded basis to conclude that, in the event of legal challenge, the relevant courts and administrative authorities would find that such arrangements mentioned above would be legal, valid, binding and enforceable under the relevant laws of the relevant jurisdiction(s). <br>

:(b) Relevant laws, regulation, rules, contractual, or administrative arrangements provide that the offsetting transactions with the [[default]]ed or insolvent [[clearing member]] are highly likely to continue to be indirectly transacted through the [[CCP]], or by the [[CCP]], if the [[clearing member]] [[default]]s or becomes insolvent.<ref>If there is a clear precedent for transactions being ported at a [[CCP]] and industry intent for this practice to continue, then these factors must be considered when assessing if trades are highly likely to be ported. The fact that [[CCP]] documentation does not prohibit client trades from being ported is not sufficient to say they are highly likely to be ported.</ref> In such circumstances, the client positions and collateral with the [[CCP]] will be transferred at market value unless the client requests to close out the position at market value.

[[306(1) - CRR Provision]]

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