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K. Negative account balance and use of Insurance Fund

1.If the client's ETD Trading Account has a negative equity balance following the conclusion of the close-out procedure and mechanism, the client shall be required to make good the shortfall in the ETD Trading Account. Until the shortfall is made up, the VASP must not permit the client to enter into any further ETD positions or ETD Services.
2.Use of Insurance Fund. If the client does not make good any shortfall and the ETD Trading Account has a negative equity balance following the conclusion of the close-out procedure and mechanism, the funds in the Insurance Fund, or any other risk management mechanism approved by VARA, may be utilised to settle the client's liabilities.
3.Mutualisation of losses. Only after all of the above provisions are exhausted may a VASP providing ETD Service mutualise any shortfall or losses resulting from a defaulting client's ETD position amongst non-defaulting clients of the ETD Services.
4.
Any such mutualisation of losses under Rule ‎‎V.K.3 must be applied as an equal percentage to all non-defaulting clients of the VASP's ETD Services, so as to not disproportionately disadvantage clients with smaller account balances.