Home  Journals  Financial Analytics: Science and Experience  5(29) - 2010 May

Mechanisms to secure the fulfillment of obligations in the exchange market

Available online: 18 May 2010

Subject Heading: Financial analysis

JEL Classification: 

The author analyses the main mechanisms used by central counterparties to secure the implementation of the obligations taken by the participants. The most attention is paid to the mechanisms based on the CCP’s collection of early collateral from the participants. In this regard a detailed description of various options of the collateral is provided: individual clearing collateral and collective clearing collateral (guarantee funds), where the latter, in its turn, can be collected either with the guarantee fund’s contributions pooling or without pooling of the abovementioned contributions. Quite detailed observations are given by the author on the securing mechanisms of the obligations fulfillment that are based on analysis of the financial status of market participants and market monitoring. In the final part of the paper the emphases are laid on the main trends and specifics of the CCP institute development in Russia, and it is concluded that decision was right to choose the CCP model which combines the clearing centre and central counterparty within the framework of one organization.

Keywords: financial, market, clearing, central contractor, control system of risks, guarantee, netting

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ISSN 2311-8768 (Online)
ISSN 2073-4484 (Print)

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