MIR 4.5.4

A Recognised Clearing House must have legally enforceable Default Rules which, in the event of a Member (including if a Member is another Recognised Clearing House or a Recognised Investment Exchange) being, or appearing to be, unable to meet his obligations in respect of one or more market contracts, enable action to be taken in respect of unsettled market contracts to which the Member is a party, where appropriate to the risks faced by it, including:

(a) effecting any transfers and close-outs of a defaulting Member or participant's assets or proprietary or client positions (as applicable) to the Recognised Clearing House, a non-defaulting Member or participant, and/or to a receiver, third party or bridge financial company;
(b) the auction of any position or asset of the defaulting Member or participant in the market;
(c) the application the proceeds of liquidation, and other funds and assets of the defaulting Member or participant; and/or
(d) the use of a default contribution fund mechanism whereby defaulting and non-defaulting Member or participant's pre-funded contributions to the default contribution fund are applied to cover the obligation.