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Questionnaire for CDS CCPs on Protection of Customer Initial Margin - page 24 / 32

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1. What trading documentation will CMs (and their custodians, if applicable) and customers need to execute with the CCP (and its custodian, if applicable) in order to have customer transactions cleared?

Clearing Members need to have a Clearing Member Agreement in place.

Please see LCH.C Liffe Clearing Membership pack, sent separately, and Section 1 of the LCH.C Rules, here: http://www.lchclearnet.com/Images/Section1_tcm6- 43738.pdf

LCH.C only deals with CMs as principal and is not party to CM/customer arrangements.

a. Please discuss the extent to which the CCP “knows” the customers under the required documentation, and how this affects the customer protection analysis.

The CCP does not ‘know’ the customers.

2. What trading documentation will customers need to execute with CMs (and their custodians, if applicable) in order to have their transactions cleared?

LCH.C only deals with CMs as principal and is not party to CM/customer arrangements.

3. Please describe any legal, operational or other issues arising from the adoption by CMs and customers of a pledge arrangement (from an existing title transfer structure), or of a title transfer arrangement (from an existing pledge structure), for the provision of collateral security.

We are aware of no issues related to this.

Key Terms of Standardized Documentation

  • 4.

    Please describe the material terms of any documentation standardized by the CCP, including (but not limited to) terms relating to:

    • a.

      Circumstances under which posted margin may be returned to customers, and all related conditions and requirements;

LCH.C only deals with CMs as principal and is not party to CM/customer arrangements.

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