Clearing Agreement Template for Malaysia

A Clearing Agreement is a fundamental document used to establish and govern the relationship between a clearing house and its members in Malaysia's financial markets. This agreement is essential for entities seeking to participate in clearing activities within Malaysia's financial system and must comply with local regulatory requirements, particularly those set by Bank Negara Malaysia and the Securities Commission Malaysia. The agreement details crucial operational aspects including membership criteria, clearing procedures, risk management protocols, default management, and regulatory compliance requirements. It's particularly relevant for financial institutions engaging in securities trading, derivatives clearing, and settlement services in Malaysia, and must align with both the Capital Markets and Services Act 2007 and the Financial Services Act 2013.

1. Parties: Identification of the clearing house and clearing member, including registration details and licensing information

2. Background: Context of the agreement, including the clearing house's authority and the member's qualification to participate

3. Definitions and Interpretation: Comprehensive definitions of terms used throughout the agreement and rules of interpretation

4. Membership Requirements: Ongoing requirements for maintaining clearing membership, including financial requirements and operational capabilities

5. Clearing Services: Scope of clearing services provided and obligations of the clearing house

6. Member Obligations: Duties and responsibilities of the clearing member, including compliance requirements

7. Margin Requirements: Rules regarding initial margin, variation margin, and other collateral requirements

8. Default Procedures: Processes and consequences in the event of member default

9. Risk Management: Risk management obligations and procedures for both parties

10. Fees and Payment: Fee structure, payment terms, and related obligations

11. Representations and Warranties: Standard and specific representations made by both parties

12. Confidentiality: Obligations regarding confidential information and data protection

13. Term and Termination: Duration of agreement and circumstances for termination

14. Dispute Resolution: Procedures for handling disputes and applicable jurisdiction

15. General Provisions: Standard boilerplate clauses including notices, amendments, and governing law