TRADITION (UK) LIMITED
ELIXIUM TRADING PLATFORM
RULEBOOK
21.05.2016
Ref : IJLMCEV1L 1.1 21 05 16 FV 1.09.16 FV
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Table of Contents
1
DEFINITIONS, INTERPRETATION AND CONSTRUCTION ............................................. 3
2
ELIXIUM AND APPLICABILITY OF THE RULES ..............................................................11
3
PARTICIPATION IN THE ELIXIUM PLATFORM ..............................................................12
4
THE ELIXIUM PLATFORM .....................................................................................................22
5
FINANCIAL PRODUCTS TRADED ON THE ELIXIUM PLATFORM ..............................23
6
TRADING RULES.......................................................................................................................24
7
CLEARING, SETTLEMENT, PRESCRIBED DOCUMENTATION AND ELIXIUM
GMRAS .........................................................................................................................................29
8
ELIXIUM POWERS, DISCIPLINARY ACTION AND THE APPEALS PANEL ...............32
9
CO-OPERATION WITH REGULATORY AUTHORITIES..................................................35
10
OTHER PROVISIONS.............................................................................................................36
11
GOVERNING LAW AND JURISDICTION ...........................................................................41
FINANCIAL PRODUCT SPECIFICATION 1 SPECIMEN DRAFT ...........................................42
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1
Definitions, Interpretation and Construction
1.1
Definitions
In this Rulebook unless the context otherwise requires the following words and
expressions shall have the following meanings:
“Appeals Panel” means the committee, which is responsible for disciplinary matters
and which shall be constituted in accordance with Rule 8.4;
“Applicant” means a person applying to become a Participant in accordance with
Rule 3;
“Authorised Agency Letter” means a letter addressed to Elixium which shall have
been executed by the Authorised Agent and which must be in a form and substance
satisfactory to Elixium;
“Auctions” shall have the meaning set out at Rule 6.5.1;
“Authorised Agent” means an agent that has executed an Authorised Agency Letter
and that has been approved by Elixium to act as an Authorised Agent in respect of the
Participant(s) set out in the relevant Schedule 1;
“Authorised Representative(s)” means an authorised representative of the
Participant, which in the case of an Authorised Agent shall be taken to include a party
providing the Authorised Agent or the Participant as the case may be with middle
office, back office, collateral management, or other administrative services and/or as
may be further described in these Rules, and where the Participant is acting through
an Authorised Agent, the terms shall include the specified representatives of the
Authorised Agent;
“Bilateral Settlement” shall have the meaning set out in Rule 7.3;
“Cash Equivalent Value” or “CEV” means the market value of securities (which
may be debt, equity, hybrid securities or any other item designated by Elixium as
being a security) delivered by one Elixium Participant to the other Elixium
Participant in meeting their Elixium Transaction obligations as set out in these Rules,
and following the application of the relevant collateral haircuts that are listed or
otherwise referred to on the Elixium Platform. Such value is to be maintained
throughout the lifetime of such Elixium Transaction and shall be based inter alia on
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the prevailing haircuts specified or otherwise referred to by Elixium as being in force
on each day;
“CCP” means a central counterparty, which (i) in the case of CCP settlement in
accordance with Rule 7.1 means, any person listed by Elixium as providing central
counterparty clearing services in respect of particular Financial Products as set out in
the relevant Circular when acting in its capacity as a party providing CCP settlement;
or (ii) in the case of a CCP acting as a Participant, the CCP acting in its capacity as a
Participant;
“CCP Clearing and Settlement” shall have the meaning set out in Rule 7.1;
“Central Limit Order Book” means that part of the Elixium Platform described in
Rule 6.2.1;
“Circular” means a communication described as such and published (on the Elixium
Website or otherwise) or issued by Elixium, and may be addressed to Participants
generally or to a specific category of Participants;
“Clearing Member” means a clearing member of the relevant CCP;
“Collateral Upgrade Transaction” shall have the meaning set out at Rule 6.7.1;
“Combination Order” means an Order, which states that two or more Orders must
be executed simultaneously;
“Competent Regulatory Authority” means a regulatory authority or body with (i)
locus and remit over the activities of the Elixium Platform in whatever jurisdiction in
which the Elixium Platform operates; and/or (ii) in the case of a Participant, locus and
remit over the activities of all or any part of the Participant whether in connection
with the Elixium Platform or otherwise;
“Confidential Information” means unless otherwise contemplated in these Rules,
(including all Circulars issued thereunder), and/or the Participation Agreement,
and/or the Authorised Agency Letter and/or the Elixium Platform: Orders, Elixium
Transactions, Counterparty Credit Limits, Products that the Participant is willing to
trade, Elixium know how, and the method and operation of the Elixium Platform;
“Connected Party” means that a party will be a Connected Party if:
(i) it is a Participant and it is acting through the same Authorised Agent as
another Participant; or
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(ii) it is a Participant and is within the same group of companies as another
Participant;
“Credit Model” means the technological function issued by Elixium and described as
such on the Elixium Website;
“Data Distribution Agreement” means the agreement (if any) described as such and
entered into between the Participant and Elixium;
“Eligibility Criteria” means the criteria for eligibility for Participation on the
Elixium Platform as set out in Rule 3.2;
“Elixium GMRA” means a SIFMA/ICMA Global Master Repurchase Agreement
April 2011 Version including a completed Elixium bespoke Annex 1 thereto , an
Annex II, the Gilts Annex 2011 ( where applicable),the Equities Annex 2011 ( where
applicable) the Bills Annex 2011 ( where applicable) the Agency Annex 2011in
circumstances in which one of the Participants is acting through an Authorised Agent,
or a double Agency Annex provided by Elixium in those circumstances in which both
Participants are acting through Authorised Agents, together with such other additional
annexes as may be added and/or amended and/ or deleted from time to time, in
accordance with the Participation Agreement, and /or these Rules and/or Circular(s),
and in the form as published from time to time on the Elixium website;
“Elixium Participant” or “Participant” means a party that is a participant on the
Elixium Platform and “Participation” shall be construed accordingly;
“Elixium Participant Counterparty” means in respect of a Participant, ( that
Participant being the “First Participant”), a Participant that has entered into an
Elixium Transaction with the First Participant;
“Elixium Platform” means the Elixium multilateral trading facility (“MTF”) of
which the Applicant is or has applied to become a Participant;
“Elixium Rules” or “these Rules” means the rules in force of the Elixium Platform
from time to time;
“Elixium Transactions” means transactions which are Financial Products and which
are executed on the Elixium Platform;
“Elixium Website” means www.elixium.com or such replacement website specified
as such by Elixium;
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“Error Collar” means the technological function in the System, which if specified in
the relevant Financial Product Specification as being applicable, operates to either
prevent an Order being entered into the System by a Participant, and/or to reject such
an Order as further detailed in the relevant Financial Product Specification;
“Event of Default” shall have the meaning set out n the relevant Prescribed
Documentation;
“FCA” means the Financial Conduct Authority of the United Kingdom or any
successor, substituted, or replacement authority in the United Kingdom having
regulatory oversight of multilateral trading facilities;
“Fee(s)” means the fee(s) specified as such in the Fee Schedule to which shall be
added any relevant sales tax and/or government duty and/or impost as applicable;
“Fee Schedule” means the fee schedule published by Elixium on the Elixium
Website as the same may be amended from time to time by Elixium in accordance
with the Participation Agreement;
“Financial Products” means the financial instruments admitted to trading on the
Elixium Platform from time to time as set in the relevant Financial Product
Specification;
“Financial Product Specification” means the specification or specifications
described as such and which form part of these Rules and which are published on the
Elixium Website;
“Force Majeure” means any acts, events, omissions or accidents or circumstance not
within Elixium’s reasonable control including, without limitation:
acts of God, flood, drought, storms, earthquakes or other natural disaster;
epidemic or pandemic, pestilence, terrorist attack, civil war, civil commotion
or riots, war, threat of or preparation for war, armed conflict, imposition of
sanctions, embargo, or breaking off of diplomatic relations, nuclear, chemical
or biological contamination, electromagnetic disturbances, black outs, brown
outs or sonic boom; any law or any action taken by a government or public
authority, including without limitation imposing an export or import
restriction, quota or prohibition; collapse of buildings, fire, explosion or
accident; any labour or trade dispute, strikes, industrial action, sabotage, cyber
attack or lockouts or interruption or failure of a utility service;
“FSMA” means the Financial Services and Markets Act 2000;
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“ICMA” means the International Capital Markets Association or such successor or
replacement organisation;
“IOI” or “Indications of Interest” shall have the meaning set out in Rule 6.4.1;
“Insolvency Event” means in respect of a Participant or an Authorised Agent as the
case may be:
that an order is made by a court of competent jurisdiction, or a
resolution is passed, for the liquidation, bankruptcy or administration of
such Participant or Authorised Agent as the case may be or a notice of
appointment of a bankruptcy trustee or administrator of such Participant
or Authorised Agent as the case may be is filed with a court of
competent jurisdiction;
the appointment of a manager, receiver, administrative receiver,
administrator, trustee or other similar officer of such Participant or of
such Authorised Agent as the case may be or in respect of any part or
any of assets the Participant or the Authorised Agent as the case may
be;
such Participant or as the case may be Authorised Agent convenes a
meeting of its creditors generally or makes or proposes any arrangement
or composition with, or any assignment for the benefit of, its creditors
generally (otherwise than in the course of a reorganisation or
restructuring previously approved in writing by Elixium);
such Participant or Authorised Agent as the case may be is unable to
pay its debts as they become due or admits in writing its inability to pay
its debts as they are due or is insolvent;
a petition is presented for the winding up of the Participant or
Authorised Agent as the case may be, provided that an Insolvency
Event shall not have occurred due to the filing of a winding-up petition
which is discharged, stayed or dismissed within thirty (30) days of
commencement; or
any action occurs in respect of any Participant or Authorised Agent as
the case may be in any jurisdiction which is analogous to any of those
set out in sub-paragraphs (i), (ii), (iii), (iv) or (v) immediately above.
“Intellectual Property Rights” means patents, trademarks, service marks, rights in
logos, get up, trade names, internet domain names, rights in designs, copyright
(including rights in computer software) and moral rights, certification marks, database
rights, semi-conductor topography rights, utility models, trade secrets, inventions,
rights in know how ( which shall mean commercial information and techniques in any
form including drawings, formulae, processes, schematics, business methods,
drawings, prototypes, models, designs, test results, reports, project reports, and testing
procedures, instruction and training models, tables of operating conditions, market
forecasts and lists and particulars of customers, members and suppliers) and all other
intellectual property or proprietary rights, in each case whether registered or
unregistered and including all applications for registration, and all rights or forms of
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protection having equivalent or similar effect which may now or in the future subsist
in, apply to or are enforceable in any jurisdiction in the world;
“Market Abuse” has the meaning given to it in Section 118 of FSMA;
“Market Model” means any of: the Central Limit Order Book, an Auction, an RFQ,
an IOI, an Unwind Transaction, or a Collateral Upgrade Transaction;
“Matching” or “Match” means the matching of one Order against one or more
opposite Order(s) in accordance with these Rules and the relevant Trading Mechanics
Circular, the result of which is the creation of an Elixium Transaction;
“MiFID” means the Markets in Financial Instruments Directive (2004/39/EC);
“Multilateral Trading Facility or “MTF” shall have the meaning set out in MiFID;
“Order” means an order submitted by a Participant to raise cash against the provision
of collateral, (the Participant raising cash shall be known as the seller of the collateral
and shall be making an offer to sell collateral), or to provide cash against the receipt
of collateral (the Participant providing cash shall be known as the buyer of collateral
and shall be making a bid to buy collateral), or in the case of a Collateral Upgrade
Transaction to exchange one type of collateral against the other;
“Participation Agreement” means in respect of each Participant, the Agreement
described as such and entered into by or on behalf of a Participant with Elixium;
“Participant” means a party that is a participant on the Elixium Platform and
“Participation” shall be construed accordingly;
“Participant Data” means Elixium Orders, Requests for Quote, Indications of
Interest, Transaction(s) and pricing data submitted to the System by or on behalf of
the Participant;
“ Prescribed Documentation” shall have the meaning set out in Rule 7.4;
“Request for Quote” or “RFQ” shall have the meaning set out in Rule 6.3;
“Stay or Licensing Event” means that the Participant or the Authorised Agent as the
case may be (i) becomes subject to a special resolution regime (as determined by
Elixium), or is otherwise estopped on a temporary or a permanent basis from
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performing its obligations under all or any Prescribed Documentation; (ii) has a
material regulatory license suspended or revoked and the existence or the operation of
the license is key to Elixium’s continuing determination that the Participant meets the
eligibility criteria either by itself or as a result of its Authorised Agent;
“System” means the electronic trading platform which incorporates various software,
firmware and hardware and which is known as the Elixium Platform;
“Trading Day” means a day on which the Elixium Platform is open for business as
indicated in the calendar published by Elixium on the Elixium Website;
“Tradition” means Tradition (UK) Limited, a private limited company with its
registered office at Beaufort House, 15 St Botolph Street, London EC3A 7QX and
with registered number 00937647;
“Triparty Agent” means any person listed by Elixium as providing triparty services
in respect of particular Financial Products as set out in the relevant Circular;
“Triparty Agreement” means the agreement described as such and entered into
between the Triparty Agent and the Participant;
“Triparty Settlement” shall have the meaning set out in Rule 7.2; and
“Unwind Transaction” shall have the meaning set out in Rule 6.6.1.
1.2
Interpretation and Construction
1.2.1
Capitalised terms used herein and not defined herein shall have the meaning
given to them in the Participation Agreement and /or the Authorised Agency
Letter as the case may be.
1.2.2
Unless the context otherwise requires, words in the singular shall include the
plural and vice versa.
1.2.3
Unless otherwise stated, references to any Rule are to those contained in this
Rulebook.
1.2.4
Headings are for convenience only and shall not affect the interpretation of
this Rulebook.
1.2.5
References to statutes, statutory instruments, rules of a regulatory authority
or provisions thereof shall be construed as references to any of the foregoing
as the same may be amended, extended, varied or replaced from time to time.
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1.2.6
A reference to a time shall mean Coordinated Universal Time (“UTC”)
unless otherwise stated.
1.2.7
The Financial Product Specifications, and Circulars shall form part of this
Rulebook, notwithstanding that they may be referred to separately.
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2
Elixium and Applicability of the Rules
2.1
Elixium
Elixium is a trade name of Tradition. Tradition is authorised and regulated by the
FCA and is the operator of the Elixium Platform, which is a multilateral trading
facility.
2.2
Applicability
These Rules set out the terms and conditions, which apply to Participation in and
trading on the Elixium Platform. They apply to all Participants and their Authorised
Representatives. Each Participant shall be bound by and comply with these Rules, the
Participation Agreement, the Data Distribution Agreement (if applicable) the
Authorised Agency Letter (if applicable), their application pack, and each of their
Elixium GMRA’s and other Prescribed Documentation in respect of which there is an
outstanding Elixium Transaction. These Rules are designed to ensure inter alia the fair
and orderly operation of the Elixium Platform.
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3
Participation in the Elixium Platform
3.1
Application Procedure
3.1.1
An application for admission to participate in the Elixium Platform shall be
made by submitting an application pack to Elixium at
[email protected].
3.1.2
The application must include all supporting information as stipulated in the
application pack, failing which the application will be returned to the
Applicant and will not be processed until fully completed.
3.1.3
In making an application, the Applicant is expressly confirming,
acknowledging and undertaking that it has read, understood and agrees to be
bound by these Rules. This confirmation, acknowledgement and undertaking
is material to the application and is the only basis on which Elixium is
prepared to accept an application.
3.1.4
Where the application is made by an Authorised Agent for and on behalf of
an Applicant, the confirmation, acknowledgement and undertaking that the
Applicant has read, understood and agrees to be bound by these Rules is
made for and on behalf of the Participant by the Authorised Agent and the
Authorised Agent confirms that it is fully empowered to submit the
application and to provide the confirmation, acknowledgment and
undertaking. This confirmation, acknowledgement and undertaking is
material to the application and is the only basis on which Elixium is prepared
to accept an application.
3.1.5
All fully completed applications shall be determined by Elixium and such
determination shall be notified to the Applicant at the address set out in the
Applicant’s application pack. Elixium may grant an application, refuse an
application or grant a conditional application subject to any conditions that it
considers appropriate. Where it grants an application the Participation shall
become effective on the date and at the time specified by Elixium.
3.1.6
Elixium shall be entitled to publish the names of all Participants and
Authorised Agents on the public and/or Participants’ only section of the
Elixium Website. In the case of an entity acting through an Authorised
Agent, the name of the Participant may be published by way of a code.
3.2
3.2.1
Eligibility Criteria
An application for admission to participate in the Elixium Platform will only
be considered if the Applicant meets the following requirements:
the Applicant must be:
a) an EEA regulated investment firm or credit institution (as defined
under MiFID);
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b) otherwise licensed and supervised by a financial market
supervisory authority in its country of incorporation, and pursuant
to the applicable laws of that country be a bank (authorised to
conduct deposit taking business) or have a status equivalent to an
EEA regulated investment firm; Provided that Elixium will only
consider an application in respect of Applicants located in
jurisdictions that (in the sole opinion of Elixium): (x) have
satisfactory regulatory arrangements in respect of the supervision
of investment activity; and (y) do not otherwise raise regulatory or
reputational concerns for the Elixium Platform; and (z) do not
otherwise require Elixium to obtain an authorisation, licence, or
similar permission, or a no action letter from any regulatory
authority in order to provide the Applicant with access to the
Elixium Platform;
c) an investment firm authorised in accordance with Directive
2004/39/EC, a credit institution authorised in accordance with
Directive 2006/48/EC, an insurance undertaking authorised in
accordance with Directive 73/239/EEC, an assurance undertaking
authorised in accordance with Directive 2002/83/EC, a
reinsurance undertaking authorised in accordance with Directive
2005/68/EC, a UCITS and, where relevant, its management
company, authorised in accordance with Directive 2009/65/EC,
an institution for occupational retirement provision within the
meaning of Article 6(a) of Directive 2003/41/EC, or an alternative
investment fund managed by AIFMs authorised or registered in
accordance with Directive 2011/61/EU; or a similar entity that is
licensed and supervised by a financial market supervisory
authority or the central bank in its country of operation; Provided
that in the case of similar entities, Elixium will only consider an
application in respect of Applicants located in jurisdictions that
(in the sole opinion of Elixium): (x) have satisfactory regulatory
arrangements in respect of the supervision of investment activity;
and (y) do not otherwise raise regulatory or reputational concerns
for the Elixium Platform; and (z) do not otherwise require
Elixium to obtain an authorisation, licence, or similar permission,
or a no action letter from any regulatory authority in order to
provide the Applicant with access to the Elixium Platform;
d) a central bank, development bank or multilateral development
bank; Provided that Elixium will only consider an application in
respect of Applicants located in jurisdictions that (in the sole
opinion of Elixium): (x) have satisfactory regulatory
arrangements in respect of the supervision of investment activity;
and (y) do not otherwise raise regulatory or reputational concerns
for the Elixium Platform; (z) do not otherwise require Elixium to
obtain an authorisation, license, or similar permission or a no
action letter from any regulatory authority in order to provide the
Applicant with access to the Elixium Platform;
e) a corporate entity which in the sole opinion of Elixium would be
classified as an Eligible Counterparty or a Professional Client in
accordance with FCA classifications; Provided that Elixium will
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only consider an application in respect of Applicants located in
jurisdictions that (in the sole opinion of Elixium): (x) have
satisfactory regulatory arrangements in respect of the supervision
of investment activity; and (y) do not otherwise raise regulatory or
reputational concerns for the Elixium Platform; and (z) do not
otherwise require Elixium to obtain an authorisation, licence, or
similar permission or a no action letter from any regulatory
authority in order to provide the Applicant with access to the
Elixium Platform;
f) a sovereign wealth fund; Provided that Elixium will only consider
an application in respect of Applicants located in jurisdictions that
(in the sole opinion of Elixium): (x) have satisfactory regulatory
arrangements in respect of the supervision of investment activity;
and (y) do not otherwise raise regulatory or reputational concerns
for the Elixium Platform; and (z) do not otherwise require
Elixium to obtain an authorisation, licence, or similar permission
or a no action letter from any regulatory authority in order to
provide the Applicant with access to the Elixium Platform;
g) a CCP that is authorised or recognised pursuant to Regulation
(EU) No 648/2012, or if it is not so authorised or recognised,
Elixium will only consider an application in respect of Applicants
located in jurisdictions that (in the sole opinion of Elixium): (x)
have satisfactory regulatory arrangements in respect of the
supervision of CCPs; and (y) do not otherwise raise regulatory or
reputational concerns for the Elixium Platform; and (z) do not
otherwise require Elixium to obtain an authorisation, licence, or
similar permission or a no action letter from any regulatory
authority in order to provide the Applicant with access to the
Elixium Platform; or
h) a government treasury, debt management office or any similar
entity performing the same or similar function; Provided that
Elixium will only consider an application in respect of Applicants
located in jurisdictions that (in the sole opinion of Elixium): (x)
have satisfactory regulatory arrangements in respect of the
supervision of investment activity; and (y) do not otherwise raise
regulatory or reputational concerns for the Elixium Platform; and
(z) do not otherwise require Elixium to obtain an authorisation,
licence, or similar permission or a no action letter from any
regulatory authority in order to provide the Applicant with access
to the Elixium Platform.
Elixium may require:
a) the Applicant to be incorporated, organised or otherwise located
in a jurisdiction for which there is a market standard opinion in
respect of repo transactions and which may be considered to apply
to that type of Applicant generally;
b) the Applicant to provide a specific legal opinion in relation to
inter alia the legal enforceability of repo transactions entered into
with the Applicant;
that the Applicant must be fit and proper as determined by Elixium;
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that the Applicant must have a sufficient level of trading ability and
competence (or in the case of an Applicant acting through an
Authorised Agent, the Authorised Agent) as determined by Elixium;
that the Applicant (or in the case of an Applicant acting through an
Authorised Agent, the Authorised Agent) must have the technical and
organisational facilities to ensure the orderly settlement of Financial
Products as determined by Elixium;
that the Applicant (or in the case of an Applicant acting through an
Authorised Agent, the Authorised Agent) must meet the technical
requirements communicated to the Applicant (or the Authorised
Agent as the case may be) for connection to the System;
that the Applicant (or in the case of an Applicant acting through an
Authorised Agent, the Authorised Agent) must have executed and
delivered the Elixium Participation Agreement which must be in full
force and effect and the Participant must be in full compliance with
the provisions of the Participation Agreement;
that where the Applicant (or in the case of an Applicant acting
through its Authorised Agent , the Authorised Agent ) intends to
execute Elixium Transactions which are required to be cleared, the
Applicant must either be a Clearing Member of the CCP which will
be clearing such transactions or have satisfactory and robust clearing
arrangements in place with a Clearing Member of that CCP or with
the CCP itself;
that where the Applicant (or in the case of an Applicant acting
through an Authorised Agent, the Authorised Agent) intends to
execute Elixium Transactions that are required to be settled through a
Triparty Agent, they must have executed and delivered a Triparty
Agreement which must be in full force and effect;
that where the Applicant (or in the case of an Applicant acting
through an Authorised Agent, the Authorised Agent) intends to
execute Elixium Transactions which are required to be settled by
Bilateral Settlement the applicant must have satisfactory bilateral
settlement arrangements in place;
that the Applicant must not be subject to an Insolvency Event or a
Stay or Licensing Event;
that where the Applicant intends to act through an Authorised Agent
then in addition to the above, the Authorised Agent :
a) must be fit and proper as determined by Elixium and shall be
subject to the prior approval of Elixium;
b) must have executed and delivered an Authorised Agency Letter
which must be in full force and effect and the Authorised Agent
must be in full compliance with the provisions of the Authorised
Agency Letter; and
c) must not be subject to an Insolvency Event or a Stay or Licensing
Event;
that to facilitate the supervision of Participants, the Applicant (and
in the case of an Applicant acting through an Authorised Agent, the
Authorised Agent) must be located in a jurisdiction in which a
reasonable exchange of information, and co-operation, between the
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FCA and any relevant foreign supervisory authorities must be
possible.
3.3
3.3.1
Participants’ Obligations
Each Participant must at all times ensure that:
it continues to comply with these Rules, all Circulars, and its
Participation Agreement;
it continues to comply with all applicable laws and regulations and, in
particular, that it does not participate in any conduct that may involve
market abuse, breach any applicable law, or regulation relating to
short selling or commit any act or engage in any course of conduct
which creates or is likely to create a false or misleading impression as
to the market in, or the price of, any Financial Product;
it continues to meet the Eligibility Criteria;
it does not engage in any act or course of conduct which is likely to
harm the integrity or stability of the System;
it complies with all of its obligations under each Elixium GMRA and
all other Prescribed Documentation in respect of which there is an
outstanding Elixium Transaction;
it complies with all of its obligations under its Bilateral Settlement
arrangements;
it complies with all of its obligations under each Triparty Agreement;
and
it complies with all of its obligations under its clearing membership
agreement with the relevant CCP if a Clearing Member, or where it
has clearing arrangements in place with a Clearing Member with that
Clearing Member or where it has other arrangements in place with a
CCP, those arrangements.
3.3.2
Without limitation to Rule 3.3.1 above, a Participant shall upon becoming
aware of the same notify Elixium promptly:
upon the occurrence of an Insolvency Event, or a Stay or a Licensing
Event relating to the Participant or if it is acting through an
Authorised Agent its Authorised Agent;
if it ceases to meet the Eligibility Criteria, or if it is acting through an
Authorised Agent if its Authorised Agent ceases to meet the
Eligibility Criteria;
if it commits a material breach of these Rules;
if it becomes aware that it or all or any of its Authorised
Representatives are unable to comply with these Rules;
if the Authorised Agent is or will no longer be acting as the
Authorised Agent for a specific Participant regardless of the reason
and regardless as to whether it was the Authorised Agent who made
the determination or the Participant or otherwise;
if it is in breach of any its obligations under an Elixium GMRA, or
any other Prescribed Documentation in respect of which there is an
outstanding Elixium Transaction;
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if it is in breach of any of its obligations under a Triparty
Agreement;or
if it is in breach of any of its obligations under the CCP arrangements
referred to at Rule 3.3.1 (viii) above.
3.3.3
Each Participant shall be responsible for all Orders and all other actions
taken on the Participant’s account(s) by the Participant’s Authorised
Representatives or any other officer, employee or agent of the Participant
who possesses a valid access permission that would allow such person to
submit an Order or take any other action on the Elixium System.
3.3.4
A Participant must at all times have adequate systems and controls to inter
alia minimise the risk of error in relation to all dealings on the Elixium
Platform (including without limitation the setting, amending and cancelling
of credit limits, dealings on the Central Limit Order Book, RFQs, IOIs,
Auctions, Unwind Transactions, Collateral Upgrade Transactions) and to
ensure that the Participant’s conduct on the Elixium Platform complies with
these Rules.
3.3.5
All Participants are responsible for ensuring that their Authorised
Representatives are properly trained, supervised and have the appropriate
level of experience, knowledge and competence in order to trade in the
Financial Products and to use the Elixium Platform properly and in
accordance with these Rules and the Financial Product Specifications.
3.3.6
Participants are responsible for settling all Elixium Transactions and in
particular for ensuring that they have the appropriate settlement
arrangements in place for the type of Elixium Transactions that they enter
into, which will enable them to settle on a timely basis. Settlement shall take
place by way of CCP Clearing and Settlement in accordance with Rule 7.1,
Triparty Settlement in accordance with Rule 7.2, or Bilateral Settlement in
accordance with Rule 7.3. The precise method for settlement shall depend
upon the specific Elixium Transaction and the relevant Financial Product
Specification.
3.3.7
Specific obligations in relation to particular Financial Product types shall be
set out in the applicable Financial Product Specification.
3.3.8
Participants and their Authorised Agents (if any) shall be bound by these
Rules and by any decision of the Appeals Panel and Elixium made pursuant
to these Rules.
3.4
3.4.1
Participants’ Acknowledgements
Each Participant hereby confirms and acknowledges the following:
that it is at all times the responsibility of the Participant to determine
whether or not it wishes to enter into Elixium Transactions with the
relevant Elixium Participant, in particular and without limitation the
Participant shall be solely responsible on a continuing basis for inter
alia:
17
a) determining whether to grant, maintain or revoke a credit line to
the relevant Elixium Participant, the amount of such credit line,
the currency of such credit line, together with the Elixium
Products which it is prepared to transact with the relevant Elixium
Participant and the related maturity of such limits, for
familiarising itself with and complying with the provisions of a
Circular entitled “Operations” which contains a section relating to
credit;
b) determining whether the relevant Elixium Participant has the
legal and regulatory capacity to enter into and to perform its
obligations under an Elixium GMRA and/or other Prescribed
Documentation as the case may be, and all or any Elixium
Products and Elixium Transactions;
c) determining whether the relevant Elixium Participant satisfies the
Participant’s anti money laundering, know your customer, and
other due diligence checks;
d) monitoring the creditworthiness of Elixium Participant
Counterparties;
e) monitoring the performance by its Elixium Participant
Counterparties of their obligations to the Participant under the
relevant GMRA and/or other Prescribed Documentation as the
case may be in respect of each Elixium Transaction including
without limitation determining whether to declare an Event of
Default in respect of an Elixium Participant Counterparty, and
taking all action in respect of such Event of Default at the
Participant’s own cost and expense;
f) determining whether to enter into, terminate or modify an Elixium
Transaction and in particular and without limitation, determining
whether an Elixium Transaction is suitable or appropriate or
otherwise meets the commercial requirements of the Participant;
that it is not relying upon Elixium to provide it with any credit,
suitability, appropriateness, commercial, market, accounting, balance
sheet, legal, tax, regulatory or documentation advice, including and
without limitation in relation to any Elixium Transaction, the Elixium
GMRA or any other Prescribed Documentation; and
that the provisions of Rules 3.4.1 (i)-(ii) apply notwithstanding that
Elixium may have entered into an Elixium GMRA with an Elixium
Participant on behalf of the Participant.
3.5
Access to the System
3.5.1
Participants shall be granted access to the System by Elixium in order to
enter into ElixiumTransactions.
3.5.2
Each Participant shall appoint no less than two individuals who are
authorised by that Participant to have administration rights in relation to the
Elixium Platform (“each an Administrator”). Each Participant shall notify
Elixium of the identity of each Administrator and Elixium shall provide a
personal access code (broadly an Elixium approved user name), (“Personal
Access Code”) and an initial password in respect of each Administrator. The
18
Participant shall be responsible for notifying Elixium in relation to the
withdrawal or suspension of an Administrator.
3.5.3
Once an Applicant has become a Participant, it is the Administrator that
shall be responsible for requesting a Personal Access Code and an initial
password for each Authorised Representative of the Participant that is going
to be trading through the System or who otherwise needs access to the
System for other reasons (e.g, the creation, removal and modification of
credit limits, compliance, system management, audit, back-office
responsibilities). The Participant is at all times responsible for monitoring the
use of each Personal Access Code. An Administrator shall promptly notify
Elixium of any changes in personnel that have been allocated a Personal
Access Code, so that access rights can be terminated.
3.5.4
No Participant shall allow unauthorised third parties to use the System for
any purpose. The Personal Access Code allocated to an Authorised
Representative is personal to that individual and may not be used by any
other person. In addition, Participants shall follow all security instructions
provided by Elixium in relation to the use of the Elixium Platform.
3.5.5
A Participant may have more than one account on the System but shall be
responsible for all of its accounts.
3.5.6
Elixium shall maintain in operation continuously during trading hours (and
trading hours shall be, for each Financial Product, such hours as are stated in
the relevant Financial Product Specification and/or the Elixium Website) a
support helpdesk to which Participants shall have access (by both phone and
email) free of charge for support issues related to the Elixium Platform.
3.6
Ceasing to act through an Authorised Agent
3.6.1
Where an Authorised Agent is going to cease to act for a Participant (the
“Retiring Authorised Agent”) then either or both of the Participant and the
Retiring Authorised Agent shall notify Elixium as soon as possible and
unless impossible, prior to the Authorised Agent ceasing to act.
3.6.2
Where the Participant wishes to continue to be a Participant, Elixium shall
consider whether the Participant will continue to meet the Eligibility Criteria,
when it ceases to act through the Retiring Authorised Agent, or whether the
Participant must appoint a replacement Authorised Agent. Subject to the
Participant continuing to meet the Eligibility Criteria either by itself or
through the appointment of a replacement Authorised Agent that is
acceptable to Elixium, then the Participant shall continue to be a Participant.
Elixium shall however be entitled to suspend the Participant whilst
determining whether it meets the Eligibility Criteria.
3.6.3
Where the Retiring Authorised Agent wishes to cease to act for the
Participant but wishes to continue to act for other Participant(s), then subject
to the Authorised Agency Letter remaining in full force and effect and the
Authorised Agent being in full compliance with the provisions of the
Authorised Agency Letter, Elixium shall amend its records to show that the
19
Retiring Authorised Agent is no longer acting on behalf of that Participant
from a date to be agreed between the Participant, the Retiring Agent and
Elixium or, failing which, from the date to be determined by Elixium.
3.7
Resignation, Suspension and Termination
3.7.1
A Participant may resign its Participation and cease to be a Participant by
giving ten (10) Trading Days’ prior notice in writing to Elixium (or such
shorter period as may be required to comply with any applicable law or
regulation). Elixium may, in addition, at its absolute discretion waive some
or all of the notice period.
3.7.2
A Participant’s Participation may be suspended or terminated in accordance
with Rule 8. In addition, Elixium may immediately suspend a Participant’s or
an individual’s access to the System or any part of the System or any
Financial Product traded on the System or refuse to accept an Order to the
System, if Elixium, considers such action to be necessary to preserve the
security or integrity of the System, to prevent the breach of any laws or
regulation or to protect other Participants of the System from fraud. Elixium
shall, so far as reasonably practicable and permitted by applicable law,
provide a Participant with advance notice of any such action and the effective
time and date of such action. A Participant may appeal a decision to suspend
a Participant or an individual pursuant to this Rule 3.7.2 in accordance with
the provisions set out in Rule 8 and any such appeal will be heard in
accordance with the provisions of Rule 8, and for the avoidance of doubt the
suspension shall remain in place during the determination of any appeal.
3.7.3
In the event of the resignation, suspension or termination of a Participant’s
Participation:
the Participant shall ensure that at least 12 hours (or such shorter period
as Elixium may specify) prior to the effective time and date of the
resignation, suspension or termination (as the case may be), any
unmatched Orders and/or prices which may result in the conclusion of
Elixium Transactions by such Participant have been cancelled. If the
Participant does not effect such cancellation, within the applicable
timeframe, then Elixium shall cancel the unmatched Orders and/or
prices;
Elixium shall be entitled to take all measures necessary to prevent the
Participant from entering into new Elixium Transactions on the Elixium
Platform; and
the Participant shall continue to be liable to perform Elixium
Transactions concluded by it prior to the resignation, suspension or
termination (as the case may be).
3.7.4
Elixium shall be entitled to publish the resignation, suspension or termination
of a Participant’s Participation on the public and/or Participants’ only section
of the Elixium Website.
3.7.5
Resignation, suspension or termination of a Participant’s Participation shall
be without prejudice to any obligation of a Participant under any provision of
20
the Rules that expressly or by implication is designed to come into effect or
to continue after the resignation suspension or termination of the
Participation including without limitation Rule 1, Rules 3.7.3, 3.7.5 Rule 8,
Rule 9, Rule 10.1, Rule 10.7, Rule 11 which shall survive such resignation or
termination of the Participation and endure through any suspension.
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4
The Elixium Platform
4.1
The Elixium Platform enables Participants to enter into Elixium Transactions
electronically by use of the System in the manner provided for in these Rules.
4.2
The Elixium Platform operates by way of the Market Models set out in Rule 6
and applies certain rules and filters before Orders and associated messages
reach the System. The majority of these filters (in particular and without
limitation the credit filter which forms part of the Credit Model) must be set by
the Participant. The Participant is solely responsible for inter alia creating,
maintaining, modifying, suspending and revoking their credit settings against
other Participants and CCPs and where applicable the Triparty Agent.
4.3
Elixium shall, following the execution of an Elixium Transaction, promptly
provide each party to such Elixium Transaction with electronic confirmations
containing details of that Elixium Transaction. Each confirmation shall be
treated as a “Confirmation” for the purposes of the relevant Prescribed
Documentation.
4.4
Save in the case of an Unwind Transaction, parties to Elixium Transactions
shall remain anonymous to Participants on the System prior to the Matching of
such Elixium Transaction.
4.5
Each party to an Elixium Transaction agrees to submit the Elixium Transaction
for settlement either by way of CCP Clearing and Settlement, Triparty
Settlement or Bilateral Settlement in accordance with Rule 7, the relevant
Financial Product Specification and the terms of the specific Elixium
Transaction.
4.6
Elixium does not guarantee that the System will always be accessible and
each Participant acknowledges that access to and operation of the System
may be prevented by, and the functionality of the System may be affected
by, acts, events, omissions or accidents beyond Elixium’s reasonable control
including Force Majeure events.
22
5
Financial Products Traded on the Elixium Platform
5.1
Elixium shall determine which Financial Products, shall be admitted to trading
on the Elixium Platform from time to time, the parameters for such Financial
Products and the applicable Market Model. The list of Financial Products shall
be published on the Elixium Website.
5.2
The details of a specific Financial Product are set out in the applicable Financial
Product Specification. Elixium shall be entitled to amend all or any Financial
Product Specification as provided for in the relevant Financial Product
Specification and/or a Circular.
5.3
Elixium shall be entitled to suspend a specific Financial Product in accordance
with Rule 6.10. Elixium shall also be entitled to cease to list a specific Financial
Product and will generally provide Participants with no less than 5 Trading
Days notice by Circular of its intention to cease to list a specific Financial
Product. Elixium shall however not be required to provide all or any prior
notice if it considers that it needs to act within a shorter time frame to ensure the
fair and orderly operation of the Elixium Platform or for reasons of Force
Majeure.
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6
Trading Rules
6.1
Trading Days
6.1.1
Unless otherwise specified in these Rules and/or a Circular and/or a
Financial Product Specification, and/or the Elixium Website, Elixium
Transactions may be entered into through any Market Model.
6.1.2
Details of Trading Days, where applicable further details of a Market Model,
and the specifications for each Financial Product tradable on the Elixium
Platform can be found in these Rules, and/ or a Circular
and/or the applicable Financial Product Specification and/or the Elixium
Website as the case may be.
6.2
6.2.1
6.3
The Central Limit Order Book
Subject to the applicable Financial Product Specification and other relevant
provisions of these Rules, the Central Limit Order Book will display the
relevant components of all Orders, which Participants wish to execute
through the Central Limit Order Book. Orders submitted to the Central Limit
Order Book may be cancelled or amended by the submitting Participant at
any time prior to Matching. Orders will be Matched in accordance with the
price, timing and priority set out in the Circular entitled “Trading Mechanics
for the Central Limit Order Book”.
Request for Quote
6.3.1
A Request for Quote is a request addressed to 3 or more Participants (to each
of whom the requesting party has granted a credit line and each of which has
sufficient available credit at the time of the submission of the request),
inviting them to quote a price in respect of a specific Financial Product, in a
specific quantity and for a specific time period. A Participant must not enter
into an Elixium Transaction with a Connected Party by means of a Request
for Quote. Further mechanics relating to Requests For Quotes and the
creation of Orders for Matching which arise out of Requests For Quotes are
set out in the Circular entitled “Trading Mechanics for Request for Quotes”.
6.3.2
Where a Participant issues a significant number of Requests for Quotes as
determined by Elixium but fails to enter into Elixium Transactions through
the mechanism of a Request for Quote, then Elixium shall reserve the right to
prevent the Participant from issuing Requests for Quote either on a
temporary or a permanent basis.
6.3.3
A Participant that wishes to hold itself out as a quote provider in respect of
one or more Financial Products shall comply with the provisions set out in
the Circular entitled “Quote Provider”.
24
6.4
6.4.1
6.5
6.5.1
6.6
6.6.1
6.7
6.7.1
6.8
6.8.1
IOIs
An IOI is an invitation issued by one Participant to all or a selected group of
Participants asking whether any of the recipients have any interest in entering
into a specific transaction in a specific amount of a particular Financial
Product, within certain other parameters. A Participant must not enter into an
Elixium Transaction with a Connected Party by means of an IOI. Further
mechanics relating to IOIs and the creation of Orders for Matching which
arise out of IOIs are set out in the Circular entitled “Trading Mechanics for
Indications of Interest”.
Auctions
Auctions shall take place on such days and at such times as Elixium shall
notify to Participants. The Financial Products which may be traded by way of
an Auction shall be specified in a Circular and /or the relevant Financial
Product Specification. Further mechanics relating to Auctions and Matching
are set out in the Circular entitled “Trading Mechanics for Auctions”.
Unwind Transactions
A Participant who has entered into an Elixium Transaction may invite the
same counterparty to provide a quote in order to unwind/off-set the first
Elixium Transaction. If successfully negotiated, the second Elixium
Transaction shall be known as an Unwind Transaction. Participants entering
into Unwind Transactions with each other are not anonymous. Further
mechanics relating to Unwind Transactions and Matching are set out in the
Circular entitled “Trading Mechanics for Unwind Transactions”.
Collateral Upgrade Transactions
An Elixium Transaction in which a pair of Participants exchange Elixium
Financial Products on terms on which the Cash Equivalent Value of the
Elixium Financial Products exchanged is equal at the time at which the
transaction is entered into and at all times thereafter. Orders submitted to
enter into an exchange of one type of Financial Product for another shall be
traded by way of a periodic collateral upgrade Matching process that is
designed to identify suitable corresponding Orders having regard to price,
credit and priority considerations, as further set out in the Circular entitled
“Trading Mechanics for Collateral Upgrade Transactions”.
Trade Cancellation
Elixium may in its absolute discretion, cancel or reverse or require any
Participant to cancel or reverse any Elixium Transaction, including without
limitation:
Where Elixium considers that the Elixium Transaction:
a) appears to be a breach of law or regulation or not in accordance
with good market practice;
25
b) may give a false or misleading impression of the market; or
c) may impair the fair and orderly operation of the Elixium Platform.
6.9
Error Trades
6.9.1
Elixium Transactions effected through the System by a Participant’s
Authorised Representatives shall be binding on such Participant, subject to
any other provision of these Rules or the Participation Agreement.
6.9.2
Notwithstanding the foregoing, Elixium may but shall not be bound to cancel
or reverse an Elixium Transaction in accordance with the policy set out in
this Rule 6.9 where such a transaction constitutes an "Error Trade".
6.9.3
An Error Trade means, an Elixium Transaction which is entered into:
in the name of a Participant without the knowledge or authority of such
a Participant; or
which is manifestly erroneous.
6.9.4
If a Participant wishes to assert that an Elixium Transaction is an Error
Trade, it shall promptly upon becoming aware of the same notify Elixium in
accordance with the provisions of Rule 6.9.5 specifying the information set
out in Rule 6.9.6. Elixium may issue a notice, containing the information
required by Rule 6.9.7, to all affected Participants if it is prepared to cancel
an Elixium Transaction pursuant to this Rule (an “Error Trade Cancellation
Notice”).
6.9.5
Any notification relating to an Error Trade must be made by a Participant to
Elixium:
by email to the Elixium dedicated cancellation email address at
[email protected] or such other email address as notified by
Elixium for these purposes from time to time, or where communicated
by phone, then confirmed by email promptly (and in any event no later
than ten (10) minutes after the end of such phone communication); and
all communications must be from a Participant’s Authorised
Representative.
6.9.6
All notifications from Participants relating to an Error Trade must contain:
the Participant’s primary contact details (name and direct line);
all specific details of the Elixium Transaction(s);
timestamps for each Elixium Transaction; and
Participants reason for considering the Elixium Transaction to be an
Error Trade.
6.9.7
An Error Trade Cancellation Notice issued by Elixium shall specify the
affected counterparties, transaction details and timestamps.
6.9.8
Within thirty (30) minutes after the issue of an Error Trade Cancellation
Notice by Elixium, the Participants party to the relevant Elixium Transaction
may, jointly, agree that the Elixium Transaction does not constitute an Error
Trade and instead constitutes a good trade (a “Good Trade”). Good Trades
26
shall not be cancelled but all Error Trades may be cancelled by Elixium in
accordance with this Rule 6.9.
6.9.9
Where an Error Trade is to be cancelled, then Elixium shall notify the
counterparties of the cancellation of the Elixium Transaction, the Elixium
Transaction shall be cancelled and a cancellation notice sent out to all
Participants in respect of each such cancelled transaction.
6.9.10
No handling charge will be payable in respect of a cancellation caused by an
Error Trade.
6.9.11
If there is insufficient time in the Trading Day for any of the provisions of
this Rule 6.9 to be carried out, Elixium and the relevant Participants may
agree (including within and in accordance with the rules of the relevant CCP
or Triparty Agent as the case may be) that such procedures shall be
completed prior to the commencement of trading on the next Trading Day or,
if this is not possible, as soon as practicable after commencement of trading
on the next Trading Day after the Trading Day on which the error event
occurred.
6.9.12
Where an Error Trade relates to an Order which forms part of a Combination
Order, all orders that form part of that Combination Order shall be cancelled
in accordance with the error trade process set out in this Rule 6.9.
6.10 Suspension of Trading in one or more Financial Product(s)
6.10.1
Elixium may at any time suspend trading in whole or in respect of one or
more Financial Product(s) , if it in its discretion, it considers such action
necessary to maintain the integrity of the Elixium Platform or the fair and
orderly trading on the Elixium Platform. The decision to suspend shall be
published on the Elixium Website, or may be notified to Participants by
email or a systems notification.
6.10.2
If trading in a specific Financial Product is suspended in whole or in part, no
new Orders or prices may be entered in respect of such Financial Product for
the duration of the suspension and all Orders which are not Matched prior to
the time of suspension shall be cancelled.
6.11 Market Surveillance
6.11.1
Elixium shall maintain in place systems to monitor compliance with the
Rules, disorderly trading conditions and conduct that may involve Market
Abuse. Elixium shall enforce compliance with these Rules and may take all
measures necessary, in accordance with and subject to the provisions of these
Rules, to ensure orderly trading and the smooth operation of the System.
6.11.2
In order to ensure orderly system functionality, the commencement of
trading may, on the order of Elixium, be postponed for the entire System,
part of the System or trading hours may be extended or shortened.
27
6.11.3
In the event of technical problems that may lead to the breach of laws or
regulation, error trades or breaches of security, or may materially impact the
performance or impact the integrity or stability of the System, Elixium may,
for an individual Participant or all Participants, temporarily suspend access to
or trading through the System, to the extent required as a result of such
technical problems.
6.11.4
In the event of measures being taken which materially affect the operation of
the System, the affected Participants shall, to the extent possible, be promptly
notified via the System or, in the case of a System failure, by other suitable
electronic means.
6.11.5
If Participation in trading through the System is not possible for individual
Participants due to technical disruptions, the System shall continue to be
available to other Participants.
6.12 Removing Orders in Certain Limited Circumstances
6.12.1
Where a Participant is experiencing technical difficulties or in exceptional
circumstances, Elixium may in its absolute discretion endeavour to delete the
Participants Orders, upon receiving a request from the Participant’s
Administrator or other authorised person.
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7
Clearing, Settlement, Prescribed Documentation and
Elixium GMRAs
7.1
Clearing and Settlement
7.1.1
Participants shall be responsible for ensuring that they are in a position to
clear and settle all Elixium Transactions which are required to be cleared, at
the CCP specified in the relevant Financial Products Specification.
7.1.2
The Prescribed Documentation shall not apply to Elixium Transactions that
are required to be cleared at a CCP and once accepted for clearing the
Elixium Transaction shall be governed by the rules of the relevant CCP.
7.1.3
Where an Elixium Transaction which is required to be cleared is presented
for clearing and all or both sides of the Elixium Transaction are not accepted
for clearing, whether as a result of a rejection by the relevant CCP or
Clearing Member(s) or otherwise, then as between the Participants the
Elixium Transaction shall be void ab-initio.
7.2
7.2.1
7.3
7.3.1
7.4
Triparty Settlement
Participants shall be responsible for ensuring that they are in a position to
settle all Elixium Transactions which are required to be settled by the
Triparty Agent specified in the relevant Financial Product Specification.
Bilateral Settlement
A Financial Product Specification may state that Bilateral Settlement is
applicable. Bilateral Settlement means that the Elixium Transaction will
settle between the two Participants directly without the need for a Triparty
Agent. Participants are required to ensure that they are in a position to settle
all Elixium Transactions that are required to be settled by way of Bilateral
Settlement.
Prescribed Documentation
7.4.1
In order to ensure the orderly execution and settlement of Elixium
Transactions, Participants that have established credit lines with each other
for the purpose of entering into Elixium Transactions, must have entered into
Prescribed Documentation with each other prior entering into an Elixium
Transaction. Participants shall if requested to do so, provide details of such
Prescribed Documentation to Elixium.
7.4.2
The following is a list of Prescribed Documentation:
29
TBMA/ISMA Global Master Repurchase Agreement October 2000
Version including Annex 1 thereto, (together with such other additional
Annexes as may be added or amended from time to time);
SIFMA/ICMA Global Master Repurchase Agreement April 2011
Version including Annex 1 thereto, (together with such other additional
Annexes as may be added or amended from time to time);
an Elixium GMRA;
any master agreement which is provided by a Triparty Agent and
which is based on any of (i)-(iii) above and which is governed by
English Law; and
any other documentation specified by Elixium from time to time in a
Circular headed “Prescribed Documentation”.
For the avoidance of doubt a document shall continue to be Prescribed
Documentation notwithstanding that the Participants may have entered into a
protocol is respect of such documentation or have otherwise amended such
documentation.
7.4.3
7.5
7.5.1
Notwithstanding the use of the term Prescribed Documentation and
regardless as to whether or not the Prescribed Documentation is an Elixium
GMRA and regardless of the method of execution of such Elixium GMRA,
each Participant is responsible for ensuring that the Prescribed
Documentation meets its legal and other needs and each Participant’s
attention is expressly drawn to the provisions of Rule 3.4.
Elixium GMRAs
An Elixium GMRA may be used and executed in the following manner:
by Participants who may elect to use the Elixium GMRA and execute
the documentation with each other without involving Elixium; or
by Participants who may elect to use the Elixium GMRA with each
other but one of whom requests Elixium to execute the Elixium GMRA
on its behalf;
by Participants who may elect to use the Elixium GMRA with each
other and where each Participant request Elixium to execute the
Elixium GMRA on its behalf.
7.5.2
In addition to the provisions of the Participation Agreement and the
Authorised Agency Letter (if applicable), the following additional provisions
shall apply in respect of Elixium GMRAs which have been executed by
Elixium on behalf of both Participants as contemplated by 7.5.1(iii), and in
the case of 7.5.1(ii), if and to the extent that the Participant who did not
request Elixium to execute an Elixium GMRA so agrees:
Elixium may amend a Participant’s Elixium GMRA to take into account
specific types of Participants located in specific jurisdictions as
contemplated by the ICMA legal opinions;
30
Elixium may amend a Participant’s Elixium GMRA to take into account
market practices and/or changes in market practices;
Elixium may amend a Participant’s Elixium GMRA to take into account
specific types of Participants located in specific jurisdictions in
accordance with legal opinions obtained by Elixium;
Elixium may amend a Participant’s Elixium GMRA to include language
relating to Collateral Upgrade Transactions; and
Notwithstanding the foregoing Elixium shall not be liable for failing to
amend all or any Elixium GMRA.
7.5.3
All of the amendments set out in Rule 7.5.2 except for Rule 7.5.2(ii) may be
undertaken without the prior consent of all or any Participant. However
Elixium shall (following such amendments) provide notice of such
amendments, which may be by way of Circular to all affected Participants.
7.5.4
Where Elixium wishes to amend the Elixium GMRA pursuant to Rule 7.5.2
(ii), then it shall provide no less than 10 Trading Days notice, which may be
by way of Circular, of the amendment to all affected Participants. The
Circular shall also state whether it applies to existing Elixium Transactions
or to Elixium Transactions which come into force after the date on which the
amendment becomes effective. A Participant who does not wish to agree to
the proposed amendment may resign its Participation in accordance with
Rule 3.7. 1 and its Elixium GMRAs shall remain unaffected.
7.5.5
Elixium may at any time add and/or amend and/or delete the provisions of
the standard form of its Elixium GMRA, and will ordinarily publish such
changes on its website or in a Circular. Elixium will ordinarily provide not
less than 5 trading days notice of such changes. Participants who use and
execute the GMRA pursuant to Rule 7.5.1(i) above and each Participant in
the case of Rule 7.5.1(ii) are responsible for determining whether they wish
to amend their existing Elixium GMRA’s or to utilise the revised standard
form GMRA for future Elixium Transactions.
7.6
7.6.1
Settlement Performance
Elixium shall be entitled to monitor the settlement performance of
Participants, whether such settlement takes place at a CCP, by way of
Triparty Settlement, or by way of Bilateral Settlement.
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8
Elixium Powers, Disciplinary Action and the
Appeals Panel
8.1
Elixium Disciplinary Action
8.1.1
Elixium may take disciplinary action against a Participant and impose all or
any of the sanction set out in Rule 8.2 below:
if the Participant (or if applicable its Authorised Agent) commits any
act or omission that Elixium deems to be a material breach of these
Rules;
if the Participant ( or if applicable its Authorised Agent) enters into any
conduct which has brought or is likely to bring Elixium or the Elixium
Platform into disrepute;
if the Participant ( or if applicable its Authorised Agent) provides
information to Elixium ( including information provided for the
purposes of becoming a Participant) which is false misleading or
inaccurate in any material respect; or
if the Participant ceases to meet the Eligibility Criteria.
8.1.2
Disciplinary action shall be taken in accordance with the procedures set out
in this Clause 8.
8.1.3
Without limitation to its other powers under these Rules, Elixium may
suspend or restrict a Participant’s activities on the Elixium Platform on an
interim basis when a matter is under investigation.
8.2
8.2.1
Elixium Sanctions
Elixium may, in its absolute discretion, impose all or any of the following
sanctions on a Participant in the circumstances set out in Rule 8.1.1 above:
a written warning;
the suspension of the Participant’s Participation;
a fine of up to £50,000.00;
a public or private censure;
the termination of the Participant’s Participation.
8.2.2
8.3
8.3.1
Notwithstanding 8.2.1 above, Elixium will not usually impose a fine in the
circumstances set out in Rule 8.1.1. (iv) above unless the Participant (or if
applicable its Authorised Agent) failed to notify Elixium promptly.
Elixium Procedures
To achieve its overall aim to ensure the fair and orderly trading of Financial
Products on the Elixium Platform, and in accordance with its own regulatory
obligations, Elixium will operate procedures designed to identify breaches of
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or otherwise ensure a Participant’s compliance with the Rules, including
without limitation scrutiny of trading data and reports.
8.3.2
Elixium shall investigate the facts of each case and shall determine whether
to impose all or any of the sanctions set out in Rule 8.2 above. In making
such a determination, Elixium shall take into account a number of factors,
including without limitation:
the nature and severity of the Rule breach and the duration and
frequency of misconduct;
how the Rule breach came to light (e.g. whether flagged by the
Participant under investigation);
the actual or potential market impact of the Rule breach, and any
other repercussions;
the extent to which the Rule breach was deliberate or reckless;
the compliance history of the Participant under investigation, and the
specific history regarding the Rule breach in question and whether
any warning notices have previously been issued to the Participant in
relation to the Rule;
consistent and fair application of the Rules ( taking into account any
precedents of similar Rule breaches);
the responsiveness and conduct of the Participant in relation to the
matter under investigation; and
Elixium’s obligation to ensure fair and orderly trading.
8.3.3
Upon conclusion of its investigation, Elixium will decide what action is
necessary in each instance and shall communicate such decision to the
Participant and the action to be taken (if any). In addition (or in the
alternative) to the sanctions described in Rule 8.2 above, Elixium may, as an
initial step, request that the Participant takes remedial action so as to ensure
that the breach does not recur.
8.3.4
During its investigation, Elixium shall allow the Participant a reasonable
opportunity to submit petitions and/or information in relation to the alleged
breach and Elixium shall take such submissions into account in reaching its
conclusions.
8.3.5
A Participant shall acting with the utmost good faith cooperate with Elixium
in the investigation of a potential breach and provide assistance and
information to Elixium in order to enable Elixium to investigate the potential
breach.
8.3.6
A Participant may appeal against a decision of Elixium relating to
disciplinary action within ten (10) Trading Days of receiving a notice of the
decision. In order to appeal, the Participant must file a written notice of
appeal specifying the grounds upon which the Participant is appealing and
the reasons why it believes its Participation should not be suspended or
terminated or other sanctions should not be imposed. Appeals will be heard
and decided by the Appeals Panel.
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8.4
8.4.1
8.5
Elixium Appeals Panel - Composition
The Appeals Panel shall consist of (i) one representative of Elixium; and (ii)
a minimum of two other suitable persons selected by Elixium. A suitable
person is a market practitioner (who is not employed by or providing services
to Elixium or Tradition), an independent lawyer (who is not employed by or
providing services to Elixium or Tradition ), or a representative of an
Elixium Participant not being a Participant involved in the disciplinary
matter. No specific combination of suitable persons is required.
Elixium Appeals Panel - Procedures
8.5.1
The Appeals Panel shall convene and make a determination, by majority
vote, on the matter within twenty (20) Trading Days of receipt of notice of
appeal from the Participant. Such determination shall be to uphold, quash or
amend the original decision that is the subject of the appeal.
8.5.2
The Participant shall acting with the utmost good faith cooperate with the
Appeals Panel in the determination of the appeal by providing assistance to
the Appeals Panel including the provision of information requested by the
Appeals Panel.
8.5.3
The Appeals Panel’s determination shall be final and binding upon the
relevant Participant and Elixium.
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9
Co-operation with Regulatory Authorities
9.1
Elixium and Regulatory Co-Operation
9.1.1
Elixium will report to the FCA:
significant breaches of these Rules;
disorderly trading conditions; and
conduct that may involve Market Abuse.
9.1.2
Elixium shall supply the information required under Rule 9.1.1 above
without delay to the FCA and any other authority competent for the
investigation and prosecution of market abuse and shall provide full
assistance to the FCA and any other authority competent for the investigation
and prosecution of market abuse, in its investigation and prosecution of
market abuse occurring on or through the Elixium Platform.
9.1.3
In addition to its obligations to the FCA, Elixium will assist in any
investigation conducted in relation to trading on the Elixium Platform, by
any other Competent Regulatory Authority.
9.1.4
In addition to and without limitation to any other provisions of this Rule 9,
Elixium may communicate with, provide information to and make enquiries
of all or any Competent Regulatory Authority of a Participant and/or their
Authorised Agent
9.2
9.2.1
Participant’s Obligations in relation to Regulatory Co-Operation
Each Participant shall acting in good faith co-operate and assist Elixium, the
FCA, any other authority competent for the investigation and prosecution of
market abuse and any other Competent Regulatory Authority in any
investigation conducted in relation to trading on the Elixium Platform.
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10 Other Provisions
10.1 Fee(s) and Fines
10.1.1
Participants shall pay the Fee(s) and other costs set out in the relevant Fee
Schedule, in accordance with the Participation Agreement
10.1.2
A Participant shall pay any fine levied upon it on the due date for payment
of the same, in accordance with the notice of fine.
10.2 Participant’s Responsibilities in respect of Reporting and Taxes etc.
10.2.1
Each Participant shall familiarise itself with and be responsible for their own
legal and regulatory obligations including and without limitation in relation
to anti money laundering requirements, short selling, best execution,
disclosure obligations and undertaking the relevant regulatory reporting in
respect of all of its Elixium Transactions;
10.2.2
Each Participant shall familiarise itself with and be responsible for paying all
applicable taxes, duties, stamp duties, levies and imposts as required by
applicable law.
10.3 Amendments to the Rulebook
10.3.1
Subject to the other provisions of this Rule 10.3, Elixium may in its absolute
discretion introduce new Rules, and/or amend, extend, vary and /or
supplement the Rules.
10.3.2
In the case of changes which, Elixium acting in good faith determines to be
“non-material”, Participants shall be notified of such non-material changes at
least five (5) Trading Days prior to the effective date thereof. For the
avoidance of doubt and without limitation the following are non material
changes:
the addition of a CCP or a Triparty Agent; or
the addition of a specific type of Participant and the modification of the
Eligibility Criteria in respect of a specific type of Participant.
10.3.3
In the case of changes which need to be made as an emergency or which are
otherwise required to be made without delay by law or regulation, the
effective date shall be as determined by Elixium. For the avoidance of doubt
and without limitation Elixium may add or remove a CCP or a Triparty
Agent as an emergency.
10.3.4
In the case of material amendments (other than those made pursuant to Rule
10.3.3), Elixium shall consult with Participants prior to making such
amendments and Participants shall have a minimum of ten (10) Trading Days
to comment on the proposed amendments. After the consultation period,
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Elixium shall give Participants notice of any changes and such changes shall
become effective ten (10) Trading Days after such notification.
10.3.5
If any modification of the Rules materially adversely affects the rights or
obligations of a Participant, that Participant may, within five (5) Trading
Days of being notified of such modification, resign its Participation and
cease to be a Participant by giving notice in writing to Elixium.
10.3.6
Any amendments, extensions, variations or supplements to the Rules shall be
notified to Participants by way of a Circular sent to Participants
electronically via e-mail (to the email address notified by the Participant to
Elixium from time to time) and posted on the Elixium Website.
10.4 Intellectual Property Rights
10.4.1
All Intellectual Property Rights attaching or relating to: (i) the System and
any part of it; (ii) any data displayed on, generated by or derived from the
System (except for Participant Data); and (iii) the Elixium name, belong to
Elixium and/or its licensors. Each Participant agrees that such Intellectual
Property Rights shall remain vested exclusively in Elixium and/or its
licensors both during and after the termination of their Participation and
each Participant undertakes that it will not challenge the ownership or
validity of such Intellectual Property Rights.
10.4.2
Each Participant acknowledges and agrees that Elixium shall be
permitted, and each Participant grants Elixium an irrevocable, nonexclusive, transferable, worldwide, royalty free licence (without warranties
of any kind, express or implied) to use, compile and disseminate for sale
or otherwise the Participant Data provided that Elixium may disclose
such information on an anonymised or anonymised Participant-aggregated
basis only.
10.5 Confidentiality
10.5.1
Each Party shall keep the other party’s Confidential Information confidential
and shall not:
disclose or use such Confidential Information except for the purpose of
exercising or performing its rights and/or obligations or as otherwise
contemplated or permitted under these Rules, ( including all Circulars
issued thereunder), the Participation Agreement, the Fee Schedule, the
Data Distribution Agreement (if any) and the Authorised Agency Letter
(if any);or
disclose such information in whole or in part to any third party ( save as
contemplated in (i) above,) except as expressly permitted by this Rule
10.5.
10.5.2
A party may disclose the other party’s Confidential Information to those of
its employees, officers, contractors, representatives and advisers (“CI.
Representatives”) who need to know such Confidential Information for the
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purposes of providing and/or receiving the services as the case may be,
provided that:
it informs such CI Representative of the confidential nature of the
Confidential Information before such disclosure; and
it procures that its CI Representatives shall, in relation to any
Confidential Information disclosed to them, comply with the obligations
set out in this Clause as if they were a party to these Rules.
10.5.3
A party may disclose the other party’s Confidential Information to the extent
that such Confidential Information is required to be disclosed by law, by any
governmental or other regulatory authority or by a court or other authority of
competent jurisdiction.
10.5.4
The provisions of Rule 10.5 shall not apply to any Confidential Information
that:
is or becomes generally available to the public (other than as a result of
its disclosure by the receiving party or its CI Representatives in breach
of this Rule 10.5 );
was available to the receiving party on a non-confidential basis before
disclosure by the disclosing party; or
was, is or becomes available to the receiving party on a nonconfidential basis from a person who to the receiving party’s
knowledge, is not bound by a confidentiality agreement with the
disclosing party or otherwise prohibited from disclosing the
information to the receiving party.
10.6 Limitation of Liability
10.6.1
Save as expressly provided in these Rules,, the System and any related
equipment, manuals or other materials provided to the Participant are
provided on an “AS IS” basis without any warranty, representation, term or
condition, express or implied, of any kind by Elixium or any of its
affiliates, including without limitation as to the condition, satisfactory
quality or fitness for any purpose of the System, that the System will
perform as advertised or described or that the operation of the System will
be uninterrupted or error free.
10.6.2
Nothing in these Rules shall exclude or in any way limit the liability of a
party:
arising out of its wilful default or fraud, and/or
for death or personal injury.
10.6.3
Subject to Rule 10.6.2 and to the maximum extent permitted by applicable
law in no event shall Elixium, its employees, licensors or affiliates be
liable for: any direct or indirect loss of profits or for any special, incidental
or consequential damages howsoever caused and whether arising under
contract, tort (including without limitation negligence), breach of statutory
duty or otherwise arising out of or in connection with the Participant's use
of or inability to use the System or otherwise in relation to these Rules
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( including all Circulars issued thereunder), the Participation Agreement, the
Fee Schedule, the Data Distribution Agreement (if any) and the Authorised
Agency Letter ( if any) (even if Elixium or its employees, licensors or
affiliates are or were advised of the possibility of such damage or loss).
10.6.4
Subject to Rule 10.6.2, Elixium’s entire liability, in any calendar year,
howsoever arising and whether arising out of breach of contract, tort
(including without limitation negligence), breach of statutory duty or
otherwise to the Participant and/or any other person in respect of any
claims or losses of any nature, arising directly or indirectly, from this
Agreement, these Rules, (including all Circulars issued thereunder), the
Participation Agreement, the Fee Schedule, the Data Distribution Agreement
(if any) and the Authorised Agency Letter ( if any) shall in no event exceed,
for any incident or series of incidents attributable to the same cause,
£20,000 (twenty thousand pounds sterling).
10.6.5
Notwithstanding any other provision of these Rules, Elixium shall not be
held liable for damage caused by disruption in access or operation of the
System, or functionality of the System.
10.6.6
Elixium shall have no liability for the performance, non-performance or any
act or omission of any Triparty Agent, CCP, settlement agent, Participant or
Authorised Agent, or the existence or content of or applicability of any legal
opinion whether provided to ICMA or otherwise.
10.7 Notices
10.7.1
Except as otherwise specified in these Rules, any notice or other
communication in connection with these Rules (each, a “Notice”) shall be:
in writing in English; and
delivered by hand, registered post or by courier using an internationally
recognised courier company.
10.7.2
The address and facsimile number (and the department or officer, if any, for
whose attention the communication is to be made) of Elixium for any Notice
is:
Address: Beaufort House, 15 St Botolph Street, London, EC3A 7QX.
For the attention of the Chief Executive Officer, Elixium.
10.7.3
The address and facsimile number (and the department or officer, if any, for
whose attention the communication is to be made) of a Participant is the
address and facsimile number so notified by the Applicant in their
application pack, as may be amended by notification to Elixium from time to
time by not less than five (5) Trading Days’ notice.
10.7.4
A Notice shall be effective upon receipt and shall be deemed to have been
received at the time of delivery, if delivered by hand, registered post or
courier.
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10.7.5
Where any Notice is to be sent by email in accordance with these Rules, that
Notice shall be effective upon receipt and shall be deemed to have been
received when the email has been delivered to, and received by, the email
servers of the recipient.
10.8 Waiver
No failure or delay by Elixium to exercise any right or remedy provided for under
these Rules or by law shall constitute a waiver of that or any other right or remedy,
nor shall it prevent or restrict the further exercise of that or any other right or remedy.
No single or partial exercise of such right or remedy shall prevent or restrict the
further exercise of that or any other right or remedy.
10.9 Validity of the Rules
If at any time any provision of these Rules becomes illegal, invalid or unenforceable
in any respect under the laws of any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions of these Rules nor the legality, validity or
enforceability of such provisions under the law of any other jurisdiction shall be
affected or impaired.
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11 Governing Law and Jurisdiction
11.1 Governing law
These Rules and any dispute or claim arising out of or in connection with these Rules
or their subject matter (including non- contractual disputes or claims) shall be
governed by and construed in accordance with English Law.
11.2 Jurisdiction
Elixium and each Participant hereby irrevocably agrees that the courts of England and
Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of or
in connection with these Rules or their subject matter ( including non-contractual
disputes or claims).
11.3 Service Of Process Agent
Where applicable in respect of a Participant (as determined by Elixium), the
Participant hereby irrevocably appoints the person identified as its service of process
agent in its application pack to receive on its behalf service of proceedings in respect
of all proceedings in the courts of England and Wales. Nothing contained in this
provision shall affect Elixium’s right to serve process in any other manner permitted
by law.
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FINANCIAL PRODUCT SPECIFICATION 1
SPECIMEN DRAFT
1. Definitions
2. Description of the Product
3. Trading Procedures (if any)
4. Settlement
- CCP Clearing and Settlement
- Triparty Settlement
- Bilateral Settlement
5. Any other Provisions
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