With the objective of implementing the best clearing and settlement practices, SMX
has incorporated its clearing corporation, the Singapore Mercantile Exchange Clearing
Corporation (SMXCC). As the Exchange's Clearing House SMXCC will handle clearing,
settlement and risk management functions. SMXCC will be the Central Counterparty
between buyers and sellers for trades executed on the SMX trading platform.
In order to protect market participants from any counterparty credit risk, SMXCC
will have in place a Settlement Guarantee Fund. Non-performance by any one party
will not affect the other party, as SMXCC will step in and fulfill obligations of
the defaulting party through the Settlement Guarantee Fund. Guaranteed performance
on SMX products will provide immense confidence to market participants as counterparty
risk will be eliminated. This process ensures market integrity.