Chapter 1. Scope and launch model
These Rules govern the financial completion of trades accepted through Kapolly. The launch model is fully collateralised and does not provide participant credit, leverage or negative balances.
Clearing and settlement may be provided directly by Kapolly or through an approved clearing entity, bank, custodian or other arrangement, depending on the legal structure that applies in the relevant jurisdiction.
Chapter 2. Definitions
| Term | Meaning |
|---|---|
| Available Cash | Settled cash available for withdrawal or new orders, subject to holds. |
| Reserved Cash | Cash committed to open orders and not otherwise available. |
| Settlement Collateral | Cash assigned to support the maximum settlement obligation of open contracts. |
| Pending Deposit | External payment reported but not yet finally credited under Kapolly verification rules. |
| Pending Withdrawal | Cash reserved for an outbound payment request. |
| Financial Ledger | Kapolly’s authoritative internal record of member cash and settlement postings. |
| Safeguarding Account | The bank or custody account designated under the live regulatory structure for participant money. |
| Settlement | Final posting of the amount due after a market outcome is finalised. |
Chapter 3. Access to clearing and settlement services
Only an approved account may receive live clearing and settlement services. Kapolly may condition access on KYC, country permission, account type, beneficial ownership, financial standing, operational capability and any regulator required membership or broker arrangement.
Chapter 4. Account structure
- Available cash.
- Cash reserved for open orders.
- Settlement collateral for open positions.
- Pending deposits.
- Pending withdrawals.
- Settlement payable or receivable bridge accounts.
- Kapolly fee revenue, separately identifiable from participant funds.
- Liquidity incentive payable accounts.
- Reconciliation suspense, subject to strict control and no manual balance editing.
Chapter 5. Collateral and the $1 settlement invariant
For each newly created complementary YES and NO pair, the total cash assigned to settlement must equal $1.00 per whole pair before fees. Settlement collateral is not Kapolly revenue.
No accepted trade may create an aggregate settlement promise that exceeds the collateral assigned to the relevant positions under the launch model.
5.1 No launch leverage
Initial and variation margin borrowing are not active in the intended launch product. If a future regulator permits leveraged or margined products, they require separate rules, risk models, disclosures, system controls and regulatory approval before activation.
Chapter 6. Trade acceptance and financial posting
A matched order becomes eligible for financial completion only after validation of account status, market status, available funds, limits and restrictions. Transaction records are designed to prevent retries or duplicate messages from creating duplicate positions or duplicate money movements.
When a trade is accepted, the required cash and position records are updated together so that the trade does not create uncollateralised exposure.
Chapter 7. Market settlement
After a market is final, the settlement process pays $1.00 per whole winning contract equivalent and $0.00 per losing contract equivalent, subject to valid fees, taxes or adjustments authorised by the Rules.
Settlement must be repeat safe. Reprocessing the same finalisation event must not double pay or double charge any account.
Chapter 8. Deposits
A deposit instruction creates a pending funding record. Kapolly will not credit live trading cash solely because a browser returned a success page. The payment must be independently verified through the approved provider or bank process.
Duplicate provider messages must not produce duplicate ledger credits. Failed, reversed or disputed payments are handled by compensating ledger entries and applicable account controls.
Chapter 9. Withdrawals
A participant may request withdrawal only from available settled cash, subject to account status, payment method, legal, KYC, AML/CFT, sanctions, fraud, market integrity and operational checks.
A withdrawal request reserves the amount while the outbound transfer is pending. A failed or reversed transfer restores the appropriate amount through a recorded compensating entry.
Chapter 10. Reconciliation
- Payment provider successful charges against deposit intents and ledger credits.
- Outbound transfers against withdrawal intents and ledger debits.
- Duplicate and missing webhook or bank messages.
- Failed and reversed transfers.
- Unmatched external payment references.
- Daily totals by currency and payment rail.
- Bank or custodian statements against safeguarding and ledger records where applicable.
- Unresolved reconciliation differences are investigated and recorded until resolved.
Chapter 11. Safeguarding of participant funds
Participant funds must be segregated or safeguarded in the manner required by the relevant regulator and legal structure. Kapolly must not use participant settlement collateral for ordinary operating expenses.
The identity and legal role of any bank, custodian, clearing entity or safeguarding arrangement will be disclosed where required by applicable law.
Chapter 12. Risk management actions
Kapolly may restrict new positions, reserve additional cash required by valid rules, delay a withdrawal, reduce exposure or take another risk reducing action where necessary for legal compliance, fraud prevention, market integrity or orderly settlement.
Under the fully collateralised launch model, a risk action should not create a new unsecured obligation for the participant.
Chapter 13. Default
A participant may be in default if it materially breaches these Rules, fails to satisfy a valid financial obligation, provides materially false information, becomes legally unable to perform, commits fraud affecting settlement, or is subject to an insolvency or legal event that materially impairs performance.
On default, Kapolly may cancel open orders, restrict new activity, close or transfer positions where legally permitted, set off amounts where lawful, apply available collateral to valid obligations, suspend withdrawals needed to preserve assets, and terminate services. Actions must follow the applicable regulatory and insolvency framework.
Chapter 14. Operational disruption and settlement finality
Where a technical or external failure interrupts settlement, Kapolly will preserve the last authoritative ledger state, prevent duplicate posting, recover from durable records and resume processing under controlled procedures.
Once a settlement posting is final under the applicable rule and legal framework, it will not be reversed except through an authorised correction, legal process or error procedure.
Chapter 15. Records and audit
Kapolly will maintain immutable or tamper evident records sufficient to reconstruct deposits, withdrawals, matched trades, collateral movements, settlement postings, fees, account holds and reconciliation actions.
Balance corrections are made through authorised ledger entries so that the reason and amount remain traceable.
Chapter 16. Fees, interest and investment of funds
Any permitted fee, interest treatment or investment of safeguarded participant money must be disclosed and comply with applicable law. The launch rules do not assume Kapolly may invest participant funds for its own account.
Any permitted investment of safeguarded participant money must comply with applicable law and prioritise preservation, liquidity and participant protection.
Chapter 17. Complaints and disputes
Financial disputes should be raised through the Kapolly support contact shown in the platform before live regulated trading or the Kapolly complaints contact shown in the platform before live regulated trading. A disputed payment or settlement does not authorise a participant to reverse a legitimate external payment in a way that constitutes fraud.
Mandatory regulatory, ombudsman, court or arbitration rights remain available.
Chapter 18. Amendments and regulatory precedence
These Rules may be amended prospectively in accordance with applicable regulation and notice requirements. If an applicable regulatory clearing model requires different terms, the approved rules and legal structure prevail.