Guide to ASX Clear (Futures) Clearing and Margining
ASX Clear (Futures) provides a central counter-party (CCP) clearing service for all futures and options contracts traded at the ASX 24 between ASX 24 Clearing Participants.
Central to CCP clearing is the process of 'novation', which involves ASX Clear (Futures) interposing itself between a buyer and a seller (ASX 24 Clearing Participants) and becoming the central counterparty or principal to all trades.
The process of novation provides a number of benefits for users including surety of payment, margin netting, risk management and liquidity.
Key to the financial integrity of ASX Clear (Futures) as the CCP is the administration of both Initial and Variation Margins that minimise ASX Clear (Futures) exposure to changes in market prices (i.e. Market Risk) and counter-party failure (i.e. Credit Risk).Please follow this link for information regarding ASX 24 Risk Management & Clearing.
In addition to margins, ASX Clear (Futures) imposes strict financial requirements and criteria on its Clearing Participants. For more information on the financial integrity of ASX Clear (Futures) please go to the ASX website.