Moscow Exchange Plans Introduction of Collateral for Stress
- Collateral for stress will provide an additional layer to MOEX’s central counterparty safeguard structure.
NCC Clearing Bank, part of Moscow Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Group (MOEX), has announced that it plans to introduce collateral for stress as an additional layer of its central counterparty (CCP) safeguard structure.
The move will facilitate the continued development of Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term and clearing systems as well as bringing the CCP's operations in line with international best practices.
Collateral for stress is the difference between a clearing firm's potential losses under the stress scenario and funds to be used in the event of default by the clearing firm in accordance with its clearing rules. It will be set based on the risk of clearing firms' positions that are not covered by their individual clearing collateral, or by existing collective funds and NCC dedicated capital.
First Calculation
The first calculation of collateral for stress will be on 28 June 2016. Following this, clearing firms exceeding the established limit (RUB 500,000) will receive a margin call, to be fulfilled within five working days. Firms failing to meet the deadline of 5 July 2016 will receive a margin call to be fulfilled in accordance with the clearing rules.
Applicable On FX, Equity and Bond, and Derivatives Markets
Collateral for stress will apply on the FX, equity and bond, and derivatives markets. It will be recorded as a part of firms' individual clearing collateral used to ensure settlement of trades without full collateral required.
RUB, EUR, USD and OFZs will be acceptable as collateral for stress. Collateral for stress in RUB and foreign currency will earn interest at a rate set by NCC Clearing Bank. Collateral requirements will be reviewed weekly.
NCC Clearing Bank, part of Moscow Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Group (MOEX), has announced that it plans to introduce collateral for stress as an additional layer of its central counterparty (CCP) safeguard structure.
The move will facilitate the continued development of Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term and clearing systems as well as bringing the CCP's operations in line with international best practices.
Collateral for stress is the difference between a clearing firm's potential losses under the stress scenario and funds to be used in the event of default by the clearing firm in accordance with its clearing rules. It will be set based on the risk of clearing firms' positions that are not covered by their individual clearing collateral, or by existing collective funds and NCC dedicated capital.
First Calculation
The first calculation of collateral for stress will be on 28 June 2016. Following this, clearing firms exceeding the established limit (RUB 500,000) will receive a margin call, to be fulfilled within five working days. Firms failing to meet the deadline of 5 July 2016 will receive a margin call to be fulfilled in accordance with the clearing rules.
Applicable On FX, Equity and Bond, and Derivatives Markets
Collateral for stress will apply on the FX, equity and bond, and derivatives markets. It will be recorded as a part of firms' individual clearing collateral used to ensure settlement of trades without full collateral required.
RUB, EUR, USD and OFZs will be acceptable as collateral for stress. Collateral for stress in RUB and foreign currency will earn interest at a rate set by NCC Clearing Bank. Collateral requirements will be reviewed weekly.