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Options 6A Closing Transactions
Section 1. Contracts of Suspended Members

(a) When a Member, other than a Clearing Member, is suspended pursuant to the Rule 9000 Series, all open short positions of the suspended Member in options contracts and all open positions resulting from exercise of options contracts, other than positions that are secured in full by a specific deposit or escrow deposit in accordance with the Rules of the Clearing Corporation, shall be closed without unnecessary delay by all Members carrying such positions for the account of the suspended Member; provided that the Exchange may cause the foregoing requirement to be temporarily waived for such period as it may determine if it shall deem such temporary waiver to be in the interest of the public or the other Members of the Exchange.

(b) No temporary waiver hereunder by the Exchange shall relieve the suspended Member of its obligations or of damages, nor shall it waive the close out requirements of any other Rules.

(c) When a Clearing Member is suspended pursuant to the Rule 9000 Series, the positions of such Clearing Member shall be closed out in accordance with the Rules of the Clearing Corporation.

[Adopted June 6, 2019 (SR-ISE-2019-17); amended June 10, 2020 (SR-ISE-2020-22), operative July 10, 2020.]

Section 2. Failure to Pay Premium

(a) When the Clearing Corporation shall reject an Exchange Transaction because of the failure of the Clearing Member acting on behalf of the purchaser to pay the aggregate premiums due thereon as required by the Rules of the Clearing Corporation, the Member acting as or on behalf of the writer shall have the right either to cancel the transaction by giving notice thereof to the Clearing Member or to enter into a closing writing transaction in respect of the same options contract that was the subject of the rejected Exchange Transaction for the account of the defaulting Clearing Member.

(b) Such action shall be taken as soon as possible, and in any event not later than 10:00 A.M. on the business day following the day the Exchange Transaction was rejected by the Clearing Corporation.

[Adopted June 6, 2019 (SR-ISE-2019-17).]

 
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