5.1C Qualifying Letter of Credit
For the purpose of Rules 5.1 and 5.1A, a Clearing Member may include one (1) or more Qualifying Letter(s) of Credit deposited with CDP or SGX-DC in its calculation of aggregate resources, subject to the total amount payable under the Qualifying Letter(s) of Credit or 50% of its total risk requirement, whichever is lower. In the case of a Clearing Member admitted as a clearing member of CDP and SGX-DC, and which has deposited such Qualifying Letter(s) of Credit with SGX-DC, pursuant to the corresponding provision in the SGX-DC Clearing Rules, it need not deposit another Qualifying Letter(s) of Credit with CDP.
For the purpose of Rule 5.1C.1, a qualifying letter of credit is a legally enforceable and irrevocable letter of credit that:—(1) is made in favour of CDP;(2) is issued by a bank approved by, and in a form acceptable to CDP; and(3) does not include any letters of credit provided by the Clearing Member to satisfy any other requirement imposed by CDP.
CDP reserves the right to call on any of the qualifying letters of credit furnished pursuant to this Clearing Rules and apply the proceeds thereof in respect of the Clearing Member's default to CDP. In the case of a Clearing Member admitted as a clearing member of CDP and SGX-DC, CDP shall have the discretion to apportion in any manner, the use of the proceeds between CDP and SGX-DC. In deciding on the apportionment, CDP may, in consultation with SGX-DC, take into account factors, including but not limited to, the amount owed by the Clearing Member to CDP and SGX-DC respectively.