Argentina Clearing maintains a strong safeguards system should a Clearing Member default. This system foresees a sequence for allocating resources until canceling the full defaulted amount. This risk-hedging model was structured as
a hybrid form, combining different coverage models (Defaulters pay/Survivors pay).
The sequence for the liquidation of collateral in case of default by an ALyC is the following:
- Collateral deposited in the Third-Party Transactions Guarantee Fund, if appropriate, and in the Clearing Member’s Obligations Guarantee Fund.
- Collateral deposited in the Clearing Member’s Default Guarantee Fund, pro-rated in proportion to the contributions of each member.
- Special Guarantee Funds or Insurances set up for this purpose by Argentina Clearing, should there be any.
- Argentina Clearing Fund pursuant to Sect. 45 of Act no. 26831.
- Argentina Clearing’s Shareholders’ Equity.
- Adherent Exchange’s Shareholders’ Equity.