(Establishment of Futures Clearing Houses)
Approval and a business license shall be obtained from the Competent Authority for the establishment of a futures clearing house; such approval and business license are also required in case where the clearing business is conducted by a futures exchange or by other institutions.
The operations, finance and accounting of a futures clearing house shall be kept independent. The form of organization, the rules for the establishment criteria, and the governing regulation shall be prescribed by the Competent Authority.

(Qualifications of Clearing Members)
The clearance of futures trading, unless otherwise approved by the Competent Authority, shall be executed by a clearing member with its futures clearing house.
The rules regarding the qualification of a clearing member as referred to in the preceding Paragraph shall be prescribed by the futures clearing house and approved by the Competent Authority.

(Operating Rules)
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 statement;
3. matter relating to clearing margin and premium;
4. matters relating to delivery and cash settlement;
5. contribution, custody and utilization of clearing and settlement fund;
6. surveillance of the futures trading market;
7. matters regarding service charges;
8. handling procedures and penalties for default cases;
9. contingency plan; and
10. other matters as required by the Competent Authority.
The prescription and amendment of the provisions in the operating rules as referred to in the preceding Paragraph shall be reported to the Competent Authority for its approval.

(Measures for Maintaining the Futures Market Order)
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 that may materially 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; or
4. any other measures that are necessary to maintain market order or to protect futures trading.
The standards for determining when the market order may be materially affected shall be prescribed by the clearing house and approved by the Competent Authority.

(Handling of Failure to Perform Clearing and Settlement Obligations)
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 the default on the basis of whether the futures trade was conducted on-exchange or off-exchange.
The defaulting futures clearing member is liable to indemnify for any payments 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, as referred to in paragraph 1.

(Clearing Margin Collection Method, Standards, and Securities Collateral Haircut Rate)
A futures clearing house shall collect a clearing margin from each of its clearing members, and such margin may be deposited in cash or in other securities approved by the Competent Authority; where the margin is partially composed of pledged securities, the securities proportion in value shall be prescribed by the Competent Authority.
The methods of collection, the levying criteria, and the discounted rate of the value of the pledged securities for the clearing margin as referred to in the preceding Paragraph shall be prescribed by the futures clearing house and registered with the Competent Authority for its approval.

(Separation of the Clearing Margins for Proprietary and Brokerage Accounts)
The clearing margins collected by the futures clearing house shall be deposited separately from the futures clearing house's own assets.
The creditors of a futures clearing house, the financial institution holding the clearing margins, or clearing members, unless otherwise provided by this Act, shall not attach or claim any rights on such clearing margins.
A futures clearing house shall separately deal with the clearing margins between proprietary and brokerage accounts that it collects from its clearing members.

(Priority of Claims)
The creditors of a futures clearing member shall have priority rights to claim against the clearing and settlement fund for the contribution put by the clearing member where the debt obligation arises from the clearing; the priority of the creditors shall be as follows in decreasing order:
1. The clearing house;
2. Futures traders;
3. Members of the clearing house.

(Deposit of Compensation Reserve Fund)
A clearing house shall deposit a compensation reserve fund; the rules regarding the proportion, custody, and utilization of the fund shall be prescribed by the Competent Authority.

(Transfer of Accounts)
A futures clearing house may, in case a member is bankrupt, dissolved, suspended for business or defaulted upon 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 defaulting member. Where it is deemed necessary, the futures clearing house may appoint a non-contractual member as transferee to assume the liability and responsibility of the defaulting member.
A clearing house may impose a monetary penalty, void the membership, or take other necessary measures upon a member who refuses to accept the succession as referred to in the preceding Paragraph.

(Provisions Applied Mutatis Mutandis)
The provisions provided in Chapter II regarding the futures exchange shall apply mutatis mutandis to futures clearing house unless otherwise provided for by this Chapter or with regards to the latter part of Article 34 of this Act.