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I am not English native speaker, I am Italian.

I couldn't understand, I am confused.

What is the exact meaning of the following sentence in simple English?

"Later, a member of the exchange was not required to be a member of the clearinghouse if it could arrange for a clearinghouse member to assume responsibility for the nonmember’s obligations to the clearinghouse."

Which one is "to assume responsibility for obligations": a clearinghouse member or a member of the exchange?


Only in 1925 did the CBOT form the Board of Trade Clearing Corporation (BOTCC), a true CCP that became the counterparty to all transactions on the exchange. With the creation of BOTCC, members of the exchange were required to purchase shares in the clearinghouse, and only the member shareholders were permitted to use the facility. (Later, a member of the exchange was not required to be a member of the clearinghouse if it could arrange for a clearinghouse member to assume responsibility for the nonmember’s obligations to the clearinghouse.)

Members were also required to post their margin deposits with the clearinghouse. In the event of a member’s default, the clearinghouse would take responsibility for settling the defaulting member’s trades.

  • In English, we always capitalize proper nouns like English. We also always capitalize the first word of a sentence, and the first person singular pronoun. This should be at least as important as, and certainly more basic than, an understanding of the phrase "to assume responsibility for obligations". – P. E. Dant Jul 2 '17 at 7:19
  • The Exchange member was not required to be a member of the Clearinghouse if it could arrange for a proxy to discharge its obligations to the Clearinghouse; the proxy had to be a member of the Clearinghouse. – Tᴚoɯɐuo Jul 2 '17 at 13:38
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I don't see any ambiguity here, the key phrase is

a clearing house member to assume responsibility

It is the Clearing House Member that is assuming responsibility on behalf of the Member of the Exchange.

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