What Happens to Client Positions If a Suitable Receiving Member Cannot Be Found for Porting?

If a suitable receiving member cannot be found for porting, the clearing house may have no choice but to liquidate the client positions. This means the clearing house would close out the positions in the open market.

While this is a last resort, it is done to terminate the risk associated with the positions. Any remaining collateral after the positions are closed would then be returned to the clients, typically through the bankruptcy proceedings of the defaulted member.