In the event of default of Clearing Members on their cash obligations pursuant to this Rulebook, the provisions of this Chapter and the Clearing Rulebook for Balancing Market Positions shall apply.

If a Clearing Member defaults on the performance of its cash obligations pursuant to this Rulebook:

a) the Clearing House shall be obliged to notify the HETS Operator immediately.

b) If the losses caused by the default are in excess of the collaterals provided for the relevant Clearing Account, of the share of the defaulting Clearing Member in the Clearing Capital and even of those of the other Clearing Members according to the Clearing Rulebook for Balancing Market Positions, the Clearing House shall notify the HETS Operator of the remaining portion of the loss and shall cover the said amount by using the balance in the Prefunded Financial Resources account, as specified in the Clearing Rulebook for Balancing Market Positions.

c) If the balance of the Prefunded Financial Resources is insufficient to cover the loss, the Clearing House shall notify the HETS Operator immediately. The remaining portion of the loss shall be borne by the Balance Responsible Parties and to Participants Subject to Deletion in their former capacity as Balance Responsible Parties (p) prior to becoming subject to Deletion and allocated among them according to the metered consumption of their Offtake Facilities from the Interconnected System for Settlement Weeks W-11 to W-8 starting from the Settlement Week when the default was ascertained by the Clearing House:

$CHARGE\_DEFAUL{T}_{p,WS}=DEFAUL{T}_W\times \frac{M{Q}_{p,WS}}{{\displaystyle \sum _p}M{Q}_{p,WS}}$

where:
$WS$ The period between W-11 and W-8 starting from Settlement Week W when the default was ascertained by the Clearing House
$DEFAUL{T}_W$ the remaining portion of loss for Settlement Week W when the default was ascertained by the Clearing House
$M{Q}_{p,WS}$ the absorption (calculated at the Transmission System/Distribution System Boundary) in MWh corresponding to the Offtake Facilities of the Interconnected System per Balance Responsible Party or Participant Subject to Deletion in their former capacity as a Balance Responsible Party p, for period WS

No corrections shall be made to the cash amounts burdening and allocated to Balancing Responsible Parties and Participants Subject to Deletion in their former capacity as Balance Responsible Parties by reason of any revised data regarding metered consumption𝑀𝑄𝑝,𝑤𝑠 by their Offtake Facilities which were calculated in the Final Settlements after default, with the exception of any corrections made by the Clearing House regarding the remainder of the loss.

d) The HETS Operator shall notify the Clearing House of the amount apportioned to each Balancing Responsible Party and to each Participant subject to Deletion in their capacity prior to becoming Participants subject to Deletion as Balance Responsible Parties, so that the Clearing House can proceed with the Cash Settlement according to the provisions of the Clearing Rulebook for Balancing Market Positions.

e) If the amounts of money settled by the Clearing House pursuant to item (c) of this paragraph are insufficient due to non-payment by the Balance Responsible Parties so obliged on the basis of the aforementioned apportionment or Participants subject to Deletion in their capacity prior to their capacity prior to becoming Participants subject to Deletion as Balance Responsible Parties, a recalculation shall be made as many times as necessary until the loss is fully covered by the Balance Responsible Parties and the Participants subject to Deletion in their capacity prior to becoming Participants subject to Deletion as Balance Responsible Parties who are up-to-date with their obligations, the procedure under item (c) being followed in all other cases. The Clearing House shall notify the HETS Operator of the relevant default and the defaulting Balancing Responsible Parties, in each apportionment cycle processand the Participants subject to Deletion in their capacity prior to becoming Participants subject to Deletion as Balance Responsible Parties, so that the HETS Operator can activate the subsequent cycle of the apportionment process as set out in paragraph 2 of this Article.

f) The collection of the relevant cash obligations of the defaulting Clearing Member shall be carried out on the basis of the Vouchers/Invoices issued by the Clearing House, which serve as proof in favour of beneficiary Clearing Members and Participants and against the defaulting Clearing Member or Participant. The above Vouchers/Invoices, including the initial Invoice shall not serve as proof, neither in favour nor against the Clearing House or the HETS Operator. Details regarding the above Vouchers/Invoices are provided in the Clearing Rulebook for Balancing Market Positions.

g) The Balancing Responsible Parties or the Participants subject to Deletion in their capacity prior to becoming Participants subject to Deletion as Balance Responsible Parties that have paid the cash amounts apportioned to them in accordance with the procedures specified in items (e) and (f), paragraph 1, section 4.6 of the Clearing Rulebook for Balancing Market Positions may, by virtue of the Apportionment Procedure Non-Collection Voucher of item c), paragraph 2, section 4.6 of the Clearing Rulebook for Balancing Market Positions demand a return of the cash amounts paid in proportion to their percentage of participation in the relevant apportionment by instructing the HETS Operator to exercise their respective rights as their representative. Court costs of all kinds as well as other related expenses and expenses for the assignment of a third-party legal advisor shall be charged to the beneficiary Balancing Responsible Parties or Participants subject to Deletion in their capacity prior to becoming Participants subject to Deletion as Balance Responsible Parties in proportion to their percentage of participation in the relevant apportionment cycle process and covered by them according to their relevant apportionment by the HETS Operator during the cash settlement procedure of the Clearing House. The HETS Operator shall assume no risk whatsoever with respect to either the assignment in accordance with the above or the positive outcome of the above demands.

h) The HETS Operator shall terminate the Balancing Service Contract and/or the Balance Responsible Party Contract of the Participants who are in default on their financial obligations in the framework of the Balancing Market.

In particular, as regards covering a Clearing Member defaulting on amounts owed for supplementary settlements from a previous period prior to the default of the Clearing Member, but calculated after the default:

a) If the balance of collateral or the share account balance of the defaulting Clearing Member that may have been withheld by the Clearing House in accordance with the provisions of the Clearing Rulebook for Balancing Market Positions is not sufficient to cover any Supplementary Settlements that may arise in respect of the Positions of the above defaulting party or if no such balance exists, the Clearing House shall notify the HETS Operator of the remaining portion of loss and shall cover it from the balance of the Pre-Funded Financial Resources as specified in the Clearing Rulebook for Balancing Market Positions.

b) If the balance of the Prefunded Financial Resources is insufficient to cover the above loss, the Clearing House shall notify the HETS Operator immediately. In this case, the process of allocations and reallocations for cases (c), (d), and (e) of paragraph 2 of this Article shall be activated until these are fully addressed.

The HETS Operator shall not be exposed to any credit risk for the cash transactions pertaining to this Rulebook and the HETS Grid Code, and shall not be liable to the Participants, the Participant subject to Deletion or the Clearing Members or the Clearing House for covering any remaining loss that is created against the Participants due to default of another Participant or Participant subject to Deletion registered with the HETS Operator Registry or another Clearing Member, over and above the performance of its duties, in accordance to this Chapter and the Clearing Rulebook for Balancing Market Positions. This also applies to the Clearing House.

The funds from the Non-Compliance Charges Account, including the Pre-Funded Financial Resources, which were used by the HETS Operator or the Clearing House to cover defaults, shall be restored only if the amount due and covered by the Account is collected from the debtor in default. The HETS Operator and the Clearing House shall immediately notify the RAEWW of instances of default, as well as of the measures and the scheduled times for enforcement of said measures taken in order to ensure the uninterrupted operation of the Balancing Market.