The establishment of a futures clearing house shall require permission and the issuance of a license from the Competent Authority. Such permission and license are likewise required if it is operated concurrently by a futures exchange or other institution.
The operations, finances, and accounting of a futures clearing house shall be kept independent. The form of organization, establishment standards, and governing regulations shall be prescribed by the Competent Authority.

The clearing of futures trades, unless otherwise approved by the Competent Authority, shall be executed by a clearing member with its futures clearing house.
The qualifications of a clearing member under the preceding paragraph shall be prescribed by the futures clearing house and submitted to the Competent Authority for its approval.

The operating rules of a futures clearing house shall contain the following particulars:
1. Procedures and methods of clearing and settlement.
2. Clearing confirmation, recordation, and report statements.
3. Matters relating to clearing margin and premium.
4. Matters relating to settlement at expiration.
5. Contribution, custody and utilization of clearing and settlement funds.
6. Surveillance of the futures trading market.
7. Matters relating to service charges.
8. Handling procedures and penalties for default.
9. Contingency plans.
10. Other matters as required by the Competent Authority.
The prescription and amendment of the provisions of the operating rules under the preceding paragraph shall be reported to the Competent Authority for its approval.

A futures clearing house may, in the process of surveillance of the futures trading market pursuant to subparagraph 6 of paragraph 1 of the preceding Article, take the following necessary measures against any members when it discovers circumstances likely to affect the market order:
1. Adjust the amount of the clearing margin.
2. Issue intra-day multiple margin calls.
3. Liquidate the open positions in whole or in part.
4. Any other measures necessary to maintain market order or protect futures trading.
The standards for determining when the market order is likely to be affected shall be prescribed by the clearing house and submitted to the Competent Authority for its approval.

In case a clearing member fails to perform its clearing and settlement obligation, the futures clearing house shall first apply the defaulting clearing member's clearing margin to cover the default. If that is insufficient, it shall apply the defaulting member's contribution to the clearing and settlement fund, the compensation reserve fund of the futures clearing house, the other clearing members' contributions to the clearing and settlement fund, and amounts to be borne by the other clearing members in proportions determined by the clearing house.
The order of application of other funds when the defaulting clearing member's clearing margin is insufficient and the proportions to be borne by the other clearing members as referred to in the preceding paragraph shall be drafted by the clearing house and reported to the Competent Authority for its approval.
The amounts referred to in paragraph 1 shall be respectively contributed or allocated to cover defaults based on whether the futures trades are conducted on-exchange or off-exchange.
The defaulting futures clearing member is liable to indemnify for any payments under paragraph 1 that are made to cover the default from the compensation reserve fund of the futures clearing house, the other clearing members' contributions to the clearing and settlement fund, and amounts borne by the other clearing members.

A futures clearing house shall collect a clearing margin from each of its clearing members, and such margin may be deposited in cash or other securities approved by the Competent Authority. With respect to any pledging of securities as margin, the proportion of the total margin value that may be covered by pledged securities shall be prescribed by the Competent Authority.
The methods and standards for the collection of clearing margin under the preceding paragraph and the haircut rate on the value of securities pledged as margin shall be prescribed by the futures clearing house and submitted to the Competent Authority for its approval.

The clearing margins collected by the futures clearing house shall be deposited separately from the futures clearing house's own assets.
It is prohibited for any creditor of a futures clearing house, of the financial institution holding the clearing margins, or of a clearing member to claim for attachment or exercise any other rights against such clearing margins unless otherwise provided by this Act.
A futures clearing house shall handle the clearing margins it collects from its clearing members separately according to whether the margins are for proprietary or brokerage trading.

With respect to a futures clearing member's debt arising out of futures clearing, the creditors thereof shall have priority rights to claim against that clearing member's contributions to the clearing and settlement fund. The priority of the creditors shall be as follows in decreasing order:
1. The clearing house.
2. Futures traders.
3. Clearing members.

A clearing house shall deposit compensation reserve funds. The allocation conditions and the methods of custody and utilization of the funds shall be prescribed by the Competent Authority.

A futures clearing house may, in the event of a member's bankruptcy, dissolution, suspension of business, or default on its clearing and settlement obligation, transfer such member's account and the related accounts of futures traders to another member who has executed a succession agreement with the member at issue. When necessary, the futures clearing house may instruct their transfer to another member who has not executed a succession agreement with the member at issue.
A futures clearing house may impose a monetary penalty on, withdraw the membership of, or take other necessary measures with respect to a member who refuses to accept succession under the preceding paragraph.

The provisions of Chapter II regarding a futures exchange shall apply mutatis mutandis to a futures clearing house unless otherwise provided in this Chapter or as provided in the latter part of Article 34 of this Act.