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Questionnaire for CDS CCPs on Protection of Customer Initial Margin - page 27 / 32





27 / 32

  • 1.

    How does the selection of pledge versus title transfer for the provision of collateral security affect this determination?

  • 2.

    What are the relevant legal standards with respect to tracing or other requirements necessary to demonstrate proprietary rights in the IM?

    • 3.

      What is the practical effect of maintaining proprietary versus contractual rights?

  • ii.

    If the distinction between proprietary versus contractual rights to the IM held at the CCP (or the CCP’s custodian) is irrelevant as a legal matter, please describe the legal framework that is relevant to the analysis.

b. How is a shortfall in CCP Margin and other custodial property (i.e., property held in a custodial capacity for purposes unrelated to the clearing of CDS) held by the CCP (or its custodian) allocated as between the CCP (or the CCP’s custodian), the CMs, the customers (as a group and individually) and other custodial claimants? Distinguish where relevant between Required Margin, CCP Excess Margin, Dealer Excess Margin and any other categories of margin.

See above

  • i.

    With what other types of custodial claimants may the customers potentially be required to share with in the event of a shortfall in custodial property?

    • 1.

      Are there any applicable regulatory regimes that limit the claims of those who may share in CCP Margin?

ii. Is it possible to contractually vary the sharing regime that would otherwise apply in any particular instance (e.g., by holding CCP Margin at a third party custodian)?

Customer Rights to Dealer Margin

2. Please detail the ability of customers to recover IM held at the CM (or the CM’s custodian) upon the insolvency of the CM (or the CM’s custodian) – distinguishing between Required Margin, CCP Excess Margin, Dealer Excess


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