MTS INTERDEALER SWAPS MARKET MARKET RULES

Transcription

1 MTS INTERDEALER SWAPS MARKET MARKET RULES Effective May 1 st, 2015 MTS Interdealer Swaps Market is a Multilateral Trading Facility organised and managed by EuroMTS Limited

2 1 Definitions Market Rules Participant Eligibility Admission procedure for Participants Resignation of Participants Undertakings of Participants General System operations Opening Hours and Days of the System Suspension and Postponement of Operations Minimum Tradable Quantity Quotes Orders Market Participant Credit Management Types of Financial Instruments Conclusion and registration of Trades Settlement of Trades Cancellation of Trades Provision of information to Participants Provision of information to the authorities Verification of regular course of trading Breach of the Market Rules Procedure in respect of Article Adoption and enforcement of sanctions Suspension from trading Liability Disputes and governing law Annex A - Minimum Trading Quantities Annex B Financial Instruments Annex C - Trading Hours Annex D - Daily statistics Annex E - Trade Cancellation Procedure... 22

3 SECTION I GENERAL PROVISIONS 1 Definitions In this Market Rules the following expressions have the following meanings: Affected Trade has the meaning specified in Annex E. Application Form means the Company s application form completed by a Participant to enable it to use the System. Capital shall mean Tier 1 regulatory capital or the equivalent, as defined under the capital adequacy regime of the Participant's home state regulator. Company means EuroMTS Limited. Credit Management Settings means either Welcome, Unwelcome or Automatic, settings which can be customised by a Participant to each counterparty on a per Instrument Class basis and any one of those three options can be applied across a range of baskets. By default the System applies the Welcome setting. Financial Instrument means financial instruments including interest rate or overnight index swaps that may be traded by Participants on the System. FCA means the Financial Conduct Authority in the United Kingdom. Group in relation to an entity, shall mean that entity s group undertakings (such term taking the meaning ascribed to it in section 1161 of the UK Companies Act 2006). Indicative Quote means a Quote posted on the System which, when aggressed, generates an RFQ and not an Order. Instrument Class means a set of Financial Instruments grouped according to certain criteria, as determined by the Company. 3

4 Major Market Incident or MMI has the meaning ascribed to it in Annex E. Market Rules means these rules and regulations (including annexes) of the System as may be made, amended or replaced from time to time by the Company in accordance with the Membership Documentation. Match means the matching of a Quote and Order on a Financial Instrument. Subject to Credit Management Settings, a Match will generate a Trade. Membership Documentation means the legal agreement between the Company and each Participant relating to the provision of the Services, as defined therein. The Membership Documentation is composed by the Application Form, the Terms and Conditions and the relevant Schedules, as well as by any document included by reference. Minimum Size is the minimum quantity entered by a Participant for which such Participant s Quotes may be aggressed or Orders may be matched. The minimum size is subject to the Minimum Tradable Quantity. Minimum Tradable Quantity is the minimum tradable quantity for which Quotes can be made and Orders submitted in respect of a Financial Instrument, such quantity as determined from time to time by the Company and communicated to the Participants in accordance to the Membership Documentation. Normal Quote means a Quote posted on the System which may be aggressed by Orders, Quotes and RFQs. Order means the bid Rate, offer Rate, notional volume, swap maturity and/or other trading information in relation to a Financial Instrument transmitted via the System and processed by the System in accordance with these Rules. An Order would not be visible on the System. Participant means all Participants accepted by the Company to participate in the System. Quote means a Fill-and-Store Order or FAS Order. A Quote can only be passive. A Quote may be posted on the System as either a Normal Quote or an Indicative Quote. 4

5 Rate means the interest rate proposed within an Order or Quote submitted by a Participant or agreed between two Participants in a Trade. Request for Quote or RFQ means a bilateral expression of interest addressed to an individual Participant in the Financial Instrument of choice. System means the screen-based system organised and administered by the Company known also as MTS Interdealer Swaps Market. Trade means a Match that has been confirmed by the relevant Participants on the System (also through Credit Management Settings). A Trade constitutes a legally binding obligation between two Participants Trading Day means a day on which the market is open. Trading Hours means the hours of the Trading Day during which the System is open. 2 Market Rules 1. The object of the Rules is to regulate the organisation and operation of the System. These Rules set out the terms and procedures relating to the organisation and operation of the multilateral trading facility ( MTF ) known as EuroMTS, and in particular a) the terms and procedures for admission, exclusion and suspension of Financial Instruments from trading; b) the terms and procedures for admission, exclusion and suspension of Participants from trading, c) the terms and procedures for conduct of trading and the operation of the associated services; and the procedures for publication and circulation of information. 2. The relationship between MTS and the Participants concerning participation in trading on the System shall be governed by the Membership Documentation (which includes the Application Form, the General Terms and Conditions and all the relevant Schedules, including these Market Rules). MTS can amend the Rules in accordance with the provision of the General Terms and Conditions, as published from time to time on MTS website 3. Participants are required, when applicable, to pay fees for the services provided in accordance with the amounts, intervals and time limits established by MTS on the basis of transparent, non-discriminatory criteria and indicated in the Price List attached to the General Terms and Conditions. 5

6 4. References herein to an Article or to an Annex shall mean an Article of, or an Annex to, the Rules respectively. SECTION II ADMISSION AND RESIGNATION OF PARTICIPANTS 3 Participant A Participant may only be able to access the System via filing a duly signed Application Form, to be provided by the Company, so confirming its acceptance also of these Market Rules. The Application Form shall be formally accepted by the Company. The Company shall maintain a record of all Participants. 4 Eligibility 1. The following entities are eligible to become Participants: a. Banks and credit institutions authorised to trade on a principal basis or deal on own account under the laws of any EEA country or non-eea countries; or b. monetary authorities, central banks, public entities responsible for managing the public debt or other entities which have similar functions in EU and non-eu countries. 2. To be a Participant on the System, an institution referred to in Article 4.1 must: a. continue to maintain relevant operations and settlement capability in order to complete and settle any Trade concluded on the System; b. effect or procure timely settlement of each of its Trades on the System in accordance with the terms and conditions of settlement of the relevant Financial Instrument; c. have in place a valid licence with the relevant licensor for the specific product in the event that a licence is required to trade certain Financial Instruments; d. be a fit and proper person, which includes, without prejudice to the generality of the foregoing, having an adequate organisation; 6

7 e. have Capital of at least Euro 10 million (or the equivalent in another currency). For the purpose of satisfying this requirement, the institution may include in its calculation the Capital of its ultimate holding company; f. be authorised to deal in investments as a principal or deal on own account without any regulatory limitations other than standard limitations; the Participant shall maintain all necessary regulatory authorizations, approvals and consents for trading on the System; g. be able to evidence that every individual or user ID transacting on the System is authorised by the Participant to trade on behalf of the Participant and has been assigned adequate risk limits; h. only use the data and information supplied to or derived from the System for trading on the System; i. ensure that no data or information supplied by or derived from the System is allowed or technically able to be redistributed, internally or externally, save with the specific consent of the Company; and j. promptly pay all relevant fees in connection with the System. The Company will only accept an Application from an entity to become a Participant based on its own evaluation of the entity against the criteria above. The Company will have sole discretion in determining whether an entity shall become a Participant. No application by an entity to become a Participant will be accepted if it jeopardises the proper functioning or orderly trading of the System and/or its electronic markets or it would adversely affect the reputation of the Company or the System and/or if filed for purposes different from trading on the System. 5 Admission procedure for Participants Each entity wishing to become a Participant must submit to the Company a completed written Application Form using the form to be provided by the Company. 6 Resignation of Participants A Participant may terminate its access to the System by giving not less than 3 months notice in writing to the Company specifying the date on which the Participant wishes to terminate its access. A Participant shall remain liable for all outstanding obligations under the System notwithstanding its termination of access to the System. 7

8 7 Undertakings of Participants SECTION III UNDERTAKINGS Each Participant represents and undertakes: 1. to notify the Company, without delay, of any interruption in trading due to a software or hardware failure, or an interruption in connectivity in the System; 2. to comply with the Market Rules; 3. to act with fairness and honesty; 4. to act with due skill, care and diligence; 3. to respect and comply with the established operating procedures for the System as updated from time to time; 4. to refrain from any act that may jeopardise the proper functioning of the System or undermine the integrity of trading on it; 5. not to enter into trades on the System other than for proper trading purposes; 6. to be responsible for the acts and omissions of its employees and agents and ensure those assigned to its trading activities on the System are competent and appropriately trained; 7. to keep confidential and not to disclose any information or data supplied to or derived from the System, save as may be required by a regulatory body or court having jurisdiction over the Participant or to members of the same Group as the Participant which have entered into a confidentiality agreement with the Company in a form approved by the Company; 8. that all rights, title and interest in, and to any work in any medium which incorporates or in the compilation of which there was used, any information or data entered by it on the System shall, as between the Participant and the Company, be the property of the Company or its licensees, and each Participant represents and undertake to grant to the Company the right to exploit the same and not to make any claim to any right, title or interest or to any payment in respect of the same; 8

9 9. to use and make available the information and data supplied to or derived from the System for the sole purpose of trading on the System and to clear and settle trades executed on the System; 10. to pay not later than the due date all fees payable to the Company for utilisation of the System; 11. to deal with the Company in an open and co-operative manner; 12. to have and maintain in its home state all necessary regulatory authorisations, approvals and consents for trading on the System; 13. to notify the Company, without delay, of any material change to the information supplied in its Application Form; 14. notwithstanding its suspension, exclusion or resignation, to comply with any requirements of the Company with regard to the execution of any outstanding Trade entered into by it on the System; 15. to safeguard passwords and other security credentials in accordance with the established operating procedures of the System and not to allow unauthorised access to the System; 16. to effect Trades on the System in its own name and not to act for a third party save for an entity in its Group; 17. to respect and accept the outcome of checks by Company referred to in Section VII of these Rules; 18. to effect or procure timely settlement and comply with all terms of each of its Trades; 19. to ensure continuing fulfilment of the conditions referred to in Articles 4; 20. to ensure that it has the relevant ISDA documentation duly in place with all counterparties with whom it may conclude Trades; 21. to ensure that it has the necessary arrangements in place to fulfil regulatory requirements for reporting its trading activity carried out on the System; 22. to inform the Company if it wishes Trades executed on the System to be novated for clearing (where eligible) and to which clearinghouse; 23. that, if and when requested by the Company, to demonstrate at least once a year its continuing satisfaction of the conditions for admission referred to in Article 4. The Company may require the 9

10 presentation of any data, information or documents relevant to this purpose, including certifications from auditing companies; and 24. to notify the Company immediately in case of a breach of any of the undertakings in Article 7. 8 General System operations SECTION IV TRADING 1. The Company shall adopt all acts reasonably necessary for the proper functioning of the System. 2. The Company shall determine the format of the operative and informational computer screen pages of the System and may change the format from time to time. 3. The Company shall, if reasonably feasible, promptly inform Participants of any of its actions that affect the operation of the System. 9 Opening Hours and Days of the System 1. Trading Days on the System are defined by the TARGET calendar. The calendar is available on the Company website. 2. The Trading Hours of the System are determined as set out in Annex C. 3. The Company may change at any time the Trading Hours in its sole discretion. The Company will use reasonable endeavours to inform the Participants thereof by electronic communications. 10 Suspension and Postponement of Operations The Company may, in its sole discretion (the following list is not intended to be exhaustive): 1. at any time suspend the operation of all or part of the System if it determines that normal market conditions do not apply; 2. postpone the start of trading for part of or for the entire System or extend the Trading Hours for the purpose of improving the functioning of the System; 10

11 3. temporarily suspend trading of part of or of the entire System, in case of serious technical malfunction or other exceptional circumstances as determined by the Company in its sole discretion. The Company will use reasonable endeavours to inform the Participants thereof by electronic communications. 11 Minimum Tradable Quantity 1. The Minimum Tradable Quantity shall be determined by the Company and is set out in Annex A. A Participant shall not be able to submit Orders or Quotes with a trading notional volume of less than the Minimum Tradable Quantity for the relevant Financial Instrument. The Company shall provide the Participants with five Trading Days notice of any change in the Minimum Tradable Quantities. 12 Quotes 1. Quotes are bids and offers sent to the System as Single-sided Quotes and are made available to other Participants on the System. Without prejudice to Paragraph 5 below, quotes will remain on the System as long as the Quantity remains unfilled, or until the end of the Trading Day on which they were entered, at which time they will expire. 2. The market depth shall contain a list of all Quotes on the System pertaining to a particular Financial Instrument and they will be listed in priority of rate and time received by the System. 3. A Participant may be able to view Quotes on the System but not the Participant from whom such Quotes originated. 4. When posting a Quote to the System, a Participant must set the following quantity parameters: a. Quantity, representing the quantity that a Participant would like to make visible to other Participants on the System. It is a dynamic quantity that decreases as a result of trading activity. b. Total Quantity, representing the total size that a Participant is willing to trade. It is a dynamic quantity that decreases as a result of trading activity. All of the above parameters must be equal to or greater than the Minimum Tradable Quantity in order to be accepted by the System. 5. Without prejudice to the provisions of Article 18, once entered onto the System and until the Quote has been aggressed according to the provisions of Article 13, a Quote may be: 11

12 a. modified ( Quote Modification ) by the Participant who entered the Quote so that the Bid Rate/Offer Rate or the Notional Volume of the Quote are changed; or b. suspended ( Quote Suspension ) by the Participant who entered the Quote so that the bid Rate/offer Rate and the respective notional volume cannot be accessed or traded on by other Participants. Such a Quote may be reactivated ( Quote Reactivation ) at any time by that Participant; c. deleted ( Quote Deletion ) by the Participant who entered the Quote so that the bid Rate/offer Rate and the notional volume relating to the Quote are immediately removed from the System. 25. A Quote will be cancelled by the System when aggressed by an Order matching the Quote s Total Quantity. 26. A Quote will be suspended by the System if the Total Quantity falls below the Minimum Tradable Quantity due to trading activity. 13 Orders 1. Orders are single-sided and will be used for aggressing existing Quotes on the System. 2. Orders may be flagged with one of the following options: a. Fill-and-Kill This Order type will match as much quantity as possible at the required Rate or at a better Rate and will cancel the remaining size which is either partially or zero-filled. b. All-or-Nothing This Order type, also known as Fill-or-Kill, will match the total required quantity at the required Rate or a better Rate, otherwise the complete Order will be cancelled by the System. c. Automatic Only Both Fill-and-Kill and All-or-Nothing Orders may be flagged as Automatic Only. Orders flagged as Automatic Only will only generate a trade where Credit Management Settings result in an automatically-generated trade. For the avoidance of doubt, if the owner of a Quote aggressed by such an Order has flagged the Participant sending the Order as Welcome, no trade will be automatically generated, regardless of whether or not the Quote and Order Rates match. 12

13 2. Orders will always match at the Best Tradable Rate (where Credit Management Settings are used) or alternatively the Best Market Rate (where Credit Management Settings are not used). All trading activity on the System shall be anonymous pre-trade and the counterparties to a Trade shall only be revealed by the Company at the point of Trade matching, whether manual or automatic. 14 Market Participant Credit Management 1. Each Market Participant may use the Credit Management Settings to control their trading relationships with each of the other Participants. The options available are: a. Welcome (Manual Confirmation) Once this setting has been configured by Participant A against Participant B for a given Instrument Class, this setting would result in the relevant Orders input by Participant B being accepted unless a manual indication to the contrary is given by Participant A within the timing set forth by the Company from time to time. b. Unwelcome (No Credit Line) Once this setting has been configured by Participant A against Participant B for a given Instrument Class, the System would block any relevant Order from being sent by Participant B to Participant A. Participant A would also be automatically prevented from aggressing relevant Orders input by Participant B. c. Automatic Once this setting has been configured by Participant A against Participant B and by Participant B against Participant A, then Orders between Participant A and B will be automatically accepted without the need for a manual confirmation. 2. The settings above may be applied per participant per Instrument Class. 3. The default system setting for all Participants is Welcome. 4. The Credit Management Settings may be updated at any time by a person duly authorized by the Participant to do so and under its responsibility. SECTION V TRADES 13

14 15 Types of Financial Instruments 1. The Company shall determine and shall specify in Annex B the types of Financial Instruments which may be traded on the System. 16 Conclusion and registration of Trades 1. Subject to the provisions of Articles 15.1 a) and c), once a Fill-and-Kill Execution, Fill-or-Kill Execution or All or Nothing Execution has been concluded on the System, an obligation shall automatically exist between the Market Participants to the Trade (and irrespective of any Trade confirmations being sent by the Company or any other third party). The Market Participants shall be obliged to settle such Trade in accordance with the terms agreed between the relevant Market Participants. 2. The Participants hereby accept and acknowledge that they are solely responsible for their own assessment of the fitness, capacity, creditworthiness and conduct of any other Participants that may be trading on the System. The Participants shall also be responsible for ensuring that the relevant ISDA documentation is in place with any counterparty to a Trade. The Company shall not be liable or responsible for any failure, delay in performance, default or breach by Participants of their obligations pursuant to any Trade. Accordingly, settlement, credit and market risks relating to any Trade shall be borne entirely by the Participant. 17 Settlement of Trades 1. Once a Trade has been concluded on the System, the Participant shall be responsible for settling the Trade or carrying out obligations relating to the Trade notwithstanding that the relevant Trade may have been concluded on an Order entered incorrectly or erroneously by the Participant. The Company shall not be responsible for any settlement activity or any other activity in relation to such concluded Trade. 2. If a Trade fails to settle for any reason whatsoever then it shall be the responsibility of the Participants to resolve such failure. However, the Company may, but shall not be obliged, to provide such assistance to the Participants in order to facilitate the resolution of any Trades that have failed to settle. Where a Participant fails to settle a Trade then this shall be deemed to be a breach of these Market Rules, in which case, the provisions of Article 23 shall apply. 3. The Company shall automate a copy of a Trade confirmation to Markitwire on behalf of the Participants to a Trade in order to facilitate the settlement and reconciliation process of the Trade between the two Participants. Where indicated by the Participants and where such a Trade is clearing-eligible, the Company shall include in the Trade confirmation details of the Participant s preferred clearing house in order to facilitate novation of the Trade. Submission by the Company of a Participant s preferred clearing 14

15 house with any given Trade does not in any way guarantee acceptance of the Trade for clearing. Failure by the Company to provide such Trade Confirmation to Markitwire shall not exonerate a Participant from settling the Trade or carrying out any obligations relating to the Trade and the Company shall not be held liable whatsoever under any circumstances for failure to generate and provide, or for incorrectly generating and/or providing such Trade confirmation to Markitwire nor to either of the Participants to a Trade. 18 Cancellation of Trades The Company may cancel Trades in accordance with Annex E. SECTION VI PROVISION OF INFORMATION 19 Provision of information to Participants 1. The Company shall make available to Participants such information as it deems necessary for the correct performance of trading activities and for the execution of Trades. 2. For each Financial Instrument the Company shall make available to all Participants, having selected the relevant Financial Instrument, the following real-time information on the System: a. Financial Instrument description; b. all Rates quoted by Participants; c. all size quoted by Participants and the Minimum Size; and d. Last Trade information (trend, side, rate, size, total size and time). 3. In addition to the information listed in paragraph 2 above, for each Financial Instrument the Company shall make available to a Participant, real-time information on the System pertaining to Orders, Matches and Trades entered by the same Participant or in which the same Participant is a counterparty and their relevant status. 4. The Company shall make available to each Participant via the System, the following tables, updated daily at opening of the System: a. a complete table of the identification codes of each Financial Instruments; and b. a complete table, with identification codes, of all Participants and descriptions. 15

16 5. If required by law to publish certain information, the Company will make publicly available for each Financial Instrument the required information. 20 Provision of information to the authorities The Company shall supply to the FCA (or any successor thereto) or any other competent authority data and information on the Trades and the activities carried out by Participants on the System and all other data, information, acts or documents as so requested by the FCA or any other competent authority or required for the Company to comply with its obligations thereto. SECTION VII SUPERVISION AND SANCTIONS 21 Verification of regular course of trading 1. The Company shall monitor the behaviour of Participants during the Trading Hours and verify their compliance with the Market Rules. 2. The Company may perform, amongst other things, the following activities: a. verification through the System's information flow, compliance with the undertakings referred to in Article 7 and where doubts in this regard arise, the Company shall promptly request clarification from the Participant involved, who shall supply such clarification in the shortest time possible; b. verification of the archives, the procedures and all other matters which the Company considers necessary for the orderly conduct of the System; c. monitoring the functioning of the System's technical structures and transmission networks; d. performing technical checks with regard to anomalous trading on the System; e. handling incorrect entries of Quotes and Orders into the System; 16

17 f. requiring Participants to provide all relevant data and information as the Company may require in connection with the System; and g. carry out inspections at a Participant s premises for the sole purpose of checking the Participant s compliance with the Market Rules. 3. Other than what is required for the operation of the System and for regulatory purposes, the Company shall keep confidential all information acquired in the course of its activities of managing and monitoring the System, save as is provided for under sub-clause 4 below. All information on the System can only be accessed via special passwords assigned by the Company to Participants. 4. In the course of entering Orders and Quotes and accessing the System, each Participant will provide certain trade and transaction data (collectively, the Transaction Data ) to the Company. Each Participant agrees that the Company is entitled to aggregate and/or compile the Transaction Data with that of other Participants, provided that such aggregated data does not directly or indirectly identify the Participant as the source of such data or that of the Participant s trading strategy (the Aggregated Data ). All intellectual property rights in the Aggregated Data shall belong to and vest solely with the Company, and the Participant agrees that Company shall be entitled to dispose, use, licence or sell the Aggregated Data as it determines in its sole discretion. Each Participant further agrees that the Company may disclose Transaction Data to any third party as the Company determines is necessary to facilitate the management and usage of the System. 22 Breach of the Market Rules When a Participant is in breach of the Market Rules, or where the Company has reasonable grounds for believing so, the Participant shall be liable to one of the following sanctions, depending on the nature and seriousness of the action and of any previous breaches committed by the same Participant a. a written censure; b. a fine of between Euro 2,000 and Euro 20,000; c. suspension (for such duration as may be determined in the Company s sole discretion) or exclusion from the System. 17

18 23 Procedure in respect of Article When the Company is of the opinion that a Participant is in breach of the Market Rules as described in Article 22, the Company shall communicate to the Participant a written notice describing the breach with which it is charged and inviting it to submit an explanation. 2. Within ten days of the communication of the notice referred to in Article 23.1, the Participant involved may file with the Company defensive briefs and documents and may ask to be heard. 3. Once the filing deadline referred to in Article 23.2 has expired, the Company, having heard the Participant involved if the latter has so requested, and examined any defensive briefs and documents filed, shall adopt one of the sanctions referred to in Article 22, if it considers that the breach of which the Participant is charged with has in fact taken place; otherwise, it shall declare the sanction proceeding concluded. 4. The decision pursuant to Article 23.3 shall be communicated in writing to the Participant involved. 5. Where the Company has reasonable grounds to believe that a Participant has committed a serious breach of the Market Rules or: a. where the Participant has been suspended from activity or from trading by the competent authorities, or a competent authority instructs the Company to suspend such Participant s trading on the System, or its relevant clearing and settlement institution advises the Company that it has suspended the Participant s account;; or b. a Participant automatically takes or is subject to the following actions: (i) makes a UK voluntary arrangement with its creditors or becomes subject to an administration order; (ii) has a receiver appointed over any of its property or assets, or an encumbrancer takes possession; (iii) proceedings are initiated against it under any applicable liquidation, bankruptcy, insolvency, composition or other similar laws; (iv) an order is made or a resolution is passed for its winding-up or dissolution; (v) any action similar to that specified in Clauses 23.5.b (i) to (iv) in any jurisdiction, 18

19 the Company may order, as a precautionary measure, the immediate suspension of such Participant from the System in its sole discretion. If a System suspension occurs pursuant to this Article 23.5, the Company shall promptly provide the Participant with notice in accordance with Article 23.1 and shall endeavour to provide a determination pursuant to Article 23.3 within twenty Trading Days of the original System suspension. 6. Save as provided by Article 23.5, any sanctions imposed pursuant to this Article 23 shall take effect on the date on which they are notified to the Participant. 24 Adoption and enforcement of sanctions 1. The Company shall impose sanctions pursuant to Articles 22 and 23 using non-discriminatory criteria. 2. A Participant s suspension from the System shall be lifted if the Company determines that the original breach has been cured. 3. In any case sanctions shall not invalidate measures adopted by the authorities for the purposes of ensuring the execution of Trades still open. 25 Suspension from trading The Company shall have the right to suspend a Participant from trading: a. when it ascertains the absence of the continuing fulfilment of even one of the conditions referred to in Article 4 (except 4.2.e); b. when it shall ascertain the absence of the continuing fulfilment of the undertakings referred to in Article 4.2.e and proof of replenishment of Capital has not been provided to the Company, within three months from notification referred to in Article 23.1; c. where the Participant has been suspended from activity or from trading by the competent authorities, or such competent authority instructs the Company to suspend its trading on the System, or its relevant clearing and settlement institution advises the Company that it has suspended the Participant s account;; or d. where a Participant automatically takes or is subject to the following actions: 19

20 (i) makes a UK voluntary arrangement with its creditors or becomes subject to an administration order; (ii) has a receiver appointed over any of its property or assets, or an encumbrancer takes possession; (iii) proceedings are initiated against it under any applicable liquidation, bankruptcy, insolvency, composition or other similar laws; (iv) an order is made or a resolution is passed for its winding-up or the dissolution; (iv) a Participant takes or is subject to any action similar to that specified in Clauses 25.d (i) to (iv) in any jurisdiction. SECTION VIII FINAL PROVISIONS 26 Liability 1. The Company reserves the right to terminate the System at any time. The Company shall have no liability (save for a refund of the pro-rata part of any pre-paid fees) to any Participant in respect of any suspension or termination of the System. 2. The liability of the Company and of the Participant respectively is regulated by the Membership Documentation. 27 Disputes and governing law 1. Settlement of disputes, governing law and jurisdiction are regulated by the Membership Documentation. 20

21 Annex A - Minimum Trading Quantities Minimum Quantities for Quotes and Orders Participants will only be permitted to enter Quotes and Orders on the System equal or in excess of the Minimum Tradable Quantity of EUR 1 million. Annex B Financial Instruments Financial Instruments, namely overnight index swaps may be concluded against the following reference indices: - EUR-EONIA-OIS_COMPOUND ( Eonia ) - REPOFUNDS RATE FRANCE ( RFR France ) - REPOFUNDS RATE GERMANY ( RFR Germany ) - REPOFUNDS RATE ITALY ( RFR Italy ) Annex C - Trading Hours : Pre-Market phase, during which Quotes may be submitted, modified and cancelled. Each Participant has only access to its own Quotes : Open Market phase, during which all Market operations may be conducted : Closed Market phase. No trades can be executed but blotter and statistics are available for download. All times stated above are GMT/BST. Annex D - Daily statistics The publicly available report shall be compiled at the end of each Trading Day by the Company and made available to Participants through the System. For each Trade the report shall indicate, for each type of Financial Instruments: (a) identification code of the type of Financial Instrument; (b) description of the type of the Financial Instrument; (c) the minimum Rate; (d) the maximum Rate; 21

22 (e) (f) the average weighted Rate; and the volume traded. The Company may specify cases in which, for purposes of the report, Trades considered anomalous by the Company are not taken into account. Annex E - Trade Cancellation Procedure 1. Notification of Error The Company must be informed of any error made in putting a Quote or an Order into the System as soon as possible and no longer than 30 minutes from the time of execution of a Trade based on such Order or Quote. The Company will endeavour to resolve the trade dispute within one hour of the notification of the error Trade. 2. Bilateral cancellation request The Company will in all cases attempt to arbitrate between Participants and reach a bilateral agreement for any Trade cancellation request. The Company, as soon as possible, will notify the non-requesting Participant (the NRP ) to the Trade that it is under review and request that the NRP agrees to a cancellation of such Trade. If the NRP agrees to such cancellation, then such Trade will be deemed cancelled immediately on receipt of confirmation of the same from the NRP. The NRP has 10 minutes to reply to the Company s cancellation request;; if it does not agree to such cancellation or fails to respond within 10 minutes, the Company will ascertain whether to perform a unilateral cancellation in accordance with (3) below. 3. Unilateral Cancellation a. In the event that the relevant Participants do not agree to cancel a Trade in accordance with (2) above, the following procedure will be used to ascertain whether or not a unilateral cancellation may be performed. b. In order to qualify for a unilateral cancellation, it must be proved beyond reasonable doubt that the Trade deviates considerably from the Fair Market Value of the Financial Instrument. The Company shall determine the Fair Market Value by employing the following steps: 22

23 (i) using the last Trade executed in the same Financial Instrument in a size no less that 5million within the previous five minutes shall be as a comparison; (ii) in the absence of a comparable trade within the preceding five-minute period, the best Quote in a size of no less than 5million at the time of Trade execution and on the same side as the Trade (Bid or Offer) will be used for comparison. I.e. if the suspected error Trade occurred as a result of a Participant aggressing a Bid, then the next best Bid will be considered. If the suspected error Trade occurred as a result of a Participant aggressing an Offer, the next best Offer will be considered. (iii) in the absence of Trades and Quotes against which an accurate picture of Fair Market Value at the time of Trade execution can be formed, the Company will immediately request from five Participants (chosen at the sole discretion of the Company) their opinion as to fair market value of the Financial Instrument at the time of Trade execution. The Company will calculate average bid and ask rates from the submitted rates. Fair Market Value will be taken as the average bid rate in the event of a seller requesting cancellation and the average ask rate in the event of a buyer requesting cancellation. c. If, after following the steps listed above, due to market volatility and/or the inability of the institutions surveyed to provide a quote, the Company is still unable to ascertain Fair Market Value, the Company will not be able to proceed with a unilateral Trade cancellation. d. Once Fair Market Value is ascertained, the alleged error Trade must be shown to deviate from the Fair Market Value by the following amounts and to cause a financial loss greater than the relevant monetary value threshold to qualify to unilateral cancellation: (i) Over 25 basis points or causing a financial loss in excess of 50,000. e. If, after following the steps listed above, the alleged error Trade is shown to deviate from Fair Market Value by the amount(s) listed in d), the Company will enforce the unilateral cancellation of the Trade and the Trade shall be deemed automatically cancelled. The Company will inform the relevant Participants via telephone (with confirmation via ) of its decision regarding the cancellation request within 60 minutes from the original notification of the error Trade. 4. Major Market Incidents "MMI" means any circumstance relating to the technical functioning of the System as the Company, in its sole discretion, shall determine to be a major market incident. The Company may consider the following factors in deciding whether an MMI has occurred: 23

24 (a) the System is inaccessible (or down ) during scheduled Trading Hours;; (b) the technical service level on the System is such that a material number of Participants cannot safely trade without their being exposed to significant market risks); or (c) the security or integrity of the System is compromised, or at imminent risk, or the Company is unable to see or control the System using its standard tools. The period of an MMI shall commence from such time as the Company in its sole discretion shall determine as the first impact on the System of the MMI in question until such time as the Company determines that the System has been restored to its normal state. Upon the occurrence of an MMI, the Company shall endeavour to notify all Participants of the same as soon as practicable via the System or by if the System is unavailable, and will notify all Participants via the System once the MMI is no longer in effect. In the even of an MMI, the Company may cancel such Quotes, Orders or Trades (together, Affected Trades ) that the Company has, in its sole discretion, determined are affected by the MMI. Without prejudice to such discretion, the Company may determine that (a) Quotes, Orders or Trades executed outside of the period of the MMI may constitute Affected Trades, and (b) Quotes, Orders or Trades executed during the period of the MMI are not deemed to be Affected Trades. The Company may, but is not obliged to, consult with Participants, who may have potentially Affected Trades. The Company will inform the relevant Participants, so far as practicable by not later than 17:30 GMT on the relevant Trading Day, of any Affected Trades. 24