APEX Clear has in place default management plans and procedures to govern the processes that apply to Members in the event of a Clearing Member default. These procedures are regularly tested to facilitate transparent and practical market action in stress situations.

In the event of a Clearing Member default, APEX Clear will liquidate the House positions of the defaulting Clearing Member as soon as possible to prevent the accumulation of losses. APEX Clear allows the transfer of Client positions of the defaulting Clearing Member to another non-defaulting Clearing Member, provided the following 3 conditions are met: 1) APEX Clear receives notice of the intention to transfer and the choice of the non-defaulting Clearing Member within 24 hours of the Declaration of Default; 2) APEX Clear assesses the non-defaulting Clearing Member to be of acceptable financial condition to accept the transfer; and 3) the non-defaulting Clearing Member consents to accepting the transfer of positions. Otherwise, APEX Clear will similarly liquidate the Client positions of the defaulting Clearing Member as soon as possible to prevent the further accumulation of losses.

Any unsettled House positions in Delivery Mode under the defaulting Clearing Member will be treated as Failed Delivery and settled according to the provisions in the Clearing Rules and Contract Terms. Any unsettled Client Positions in Delivery Mode can be allowed to continue under an alternative delivery process. All costs and expenses sustained by APEX Clear in connection with the above steps shall be charged to the account of the defaulting Clearing Member.