170. Application of margin or Default Fund Contribution not affected by certain other interests
Past version: effective from 20/10/2015 - 19/10/2015
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(1) The following provisions have effect with respect to the application by a Recognised Body of property (other than Real Property) held by the Recognised Body as margin in relation to a Market Contract or as Default Fund Contribution.
(2) So far as necessary to enable the property to be applied in accordance with the rules of the Recognised Body, it may be so applied notwithstanding any prior equitable interest or right, or any right or remedy arising from a breach of fiduciary duty, unless the Recognised Body had received actual written notice of the interest, right or breach of duty at the time the property was provided as margin or as Default Fund Contribution. In order to be valid, any notice under this subsection may only be delivered to the Recognised Body by one of its members and must be delivered in accordance with or in order to satisfy applicable Rules made by the Regulator on Client Money in accordance with section 4, or similar rules in any non-Abu Dhabi Global Market jurisdiction.
(3) No right or remedy arising subsequently to the property being provided as margin or as Default Fund Contribution may be enforced so as to prevent or interfere with the application of the property by the Recognised Body in accordance with its rules.
(4) Where a Recognised Body has power by virtue of the above provisions to apply property notwithstanding an interest, right or remedy, a person to whom the exchange or clearing house disposes of the property in accordance with its rules takes free from that interest, right or remedy.
(5) The records and accounts of a Recognised Body detailing the Clearing Member House Contracts, Clearing Member Client Contracts, relevant Client Trades and the corresponding property provided by way of margin with respect to each such category of Market Contract, shall be final and definitive in relation to the rights of the Recognised Body to take action under its Default Rules, including applying property or its proceeds against liabilities or aggregating property or its proceeds with amounts in either case recorded in particular accounts, which may take place notwithstanding any prior or competing equitable interest or right, or any right or remedy arising from a breach of fiduciary duty on the part of any Clearing Member, Client or other party, whether relevant to a Market Contract or any corresponding property provided by way of margin, excepting only cases of actual written notice referred to in subsection (2).