SEK 1 trillion

Nasdaq Clearing hits SEK 1 trillion in open interest for interest rates swaps.

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Nasdaq Clearing’s clearing model offers a wide range of alternatives for market access, segregation and portability including both agent and principal clearing. This means capital efficiency for clearing members and clients through offsets between asset classes and streamlined settlement flows. This is key in the ambition to create legal and operational efficiency for clients, members and the clearing house. 

Nasdaq Clearing offers flexible solutions for house and client clearing where omnibus accounts and individual client accounts can be set up with segregation between house and clients as well as indirect clients.

Investor Risks
This document describes the levels of protection and the costs associated with the different levels of segregation offered by, and certain risks that are associated with the process of clearing derivatives through, Nasdaq Clearing AB, based on the Clearing Rules of Nasdaq Derivatives Market and the Clearing Rules of Nasdaq Commodity Derivatives.

Investor Risks

Market Access

Access to Nasdaq Clearing’s markets can be achieved through a clearing membership, as a client or as indirect client to a clearing member.

Clearing Membership

Membership Types 

Clearing participants can access the markets as either a General Clearing Member or a Direct Clearing Member. A General Clearing Member clears on its own behalf and/or on behalf of clients, including Non-Clearing Members. A Direct Clearing Member clears on its own behalf and/or on behalf of clients (excluding Non-Clearing Members).

Trading on markets cleared by Nasdaq Clearing requires separate exchange membership(s). General Clearing and Direct Clearing memberships can be entered into as combined exchange and clearing memberships.

Non-Clearing Members enters into an exchange membership(s) as well as a clearing agreement with a General Clearing Member. A Non-Clearing Member cannot enter into a clearing membership with Nasdaq Clearing.


Membership Process

Participants get access to Nasdaq Clearing’s markets by entering into a membership agreement for clearing. Upon approval of the membership application, the legal entity is admitted as a clearing member. 


Clients 

Participants can also access the markets as a client or indirect client through a clearing member and can choose between a number of models for clearing with different options for segregation and portability as well as different legal arrangements between the indirect client, client, clearing member and the clearing house.  

Please see the Account Structure section below for more information on the different models for client clearing. 


Member and Client Requirements 

The minimum requirements for each membership type as well as for Direct Clearing Clients can be found in the rules and regulations of Nasdaq Clearing. Members must meet a number of requirements regarding management, organization, technical setup and risk management routines. Moreover, members and Direct Clearing Clients must also meet a number of financial and legal requirements

Account Structure

Nasdaq Clearing offers a range of options for client clearing with the choice of both individual client accounts, omnibus accounts and accounts for direct clearing. 


House Account 

A house clearing account is an integrated trading and clearing account for a clearing member’s trading and clearing on its own behalf. The member may not use the house clearing account for trading and clearing of transactions in respect of entities within the same group of companies as the member. Such trading and clearing can instead be done on an “Affiliate Account”, a specific account for this purpose.


Omnibus Segregated Account – Net Margin (OSA Net) 

The OSA Net account is an integrated trading and clearing account for managing the positions of several clients. Clearing Members can choose to set up several OSA Net accounts for administrative purposes. 

Initial Margin for an OSA Net account is calculated from the total net position as a netted total portfolio (i.e. correlation between all instruments and full netting is used). The net Initial Margin liability must be covered by assets on the OSA’s collateral account. 

Clients whose positions reside on an OSA Net account does not hold a direct legal relationship with the clearing house and as a consequence have credit risk against their clearing member. 


Omnibus Segregated Account – Gross Margin (OSA Gross) 

The OSA Gross account is an integrated trading and clearing account for managing the positions of several clients. Clearing Members can choose to set up several OSA Gross accounts for administrative purposes. 

Initial Margin for an OSA Gross account is calculated for each client’s positions separately and the gross sum of these Initial Margin liabilities must be covered by assets on the OSA’s collateral account. 

Clients whose positions reside on an OSA Gross account do not hold a direct legal relationship with the clearing house and as a consequence have credit risk against their clearing member. 


Individually Segregated Client Account (ISA/ICA) 

The ISA account is an integrated trading and clearing account for one individual client where both positions and collateral are fully segregated to allow portability arrangements entirely independently from any other account. 

Initial Margin for an ISA account is calculated for the net position on the account (i.e., correlation between all instruments and full netting is used). The net Initial Margin liability must be covered by assets on the ISA’s collateral account. 

Clients whose positions reside on an ISA account do not hold a direct legal relationship with the clearing house and as a consequence have credit risk against their clearing member. 


Indirect Pledge Account (IDP) 

The IDP account is an integrated trading and clearing account where positions are segregated but collateral is co-mingled with other IDP accounts. 

Clients who open up an IDP account enter into a legal relationship with both the clearing member and the clearing house. 

The Indirect Pledge model is only available on the Nasdaq Derivatives Markets. 


Direct Clearing Client 

A Direct Clearing Client is an entity that has been approved by Nasdaq Clearing to register clearing transactions in its own name and on its own account. The Direct Clearing model has direct legal relationship with Nasdaq Clearing via a tripartite agreement between Nasdaq Clearing, the Direct Clearing Client and a Direct Clearing Agent. The Direct Clearing Client is Nasdaq Clearing’s counterparty even if it acts through a clearing member who is the Client’s Agent. The model combines features of a clearing membership and a normal client relationship with a clearing member. The Direct Clearing Client takes full responsibility for providing collateral and for paying cash settlement amounts that are due to Nasdaq Clearing and keeps legal and beneficial collateral ownership. The Direct Clearing Agent may post the default fund and loss sharing pool contributions on behalf of the Direct Clearing Client to Nasdaq Clearing. Notwithstanding this, the responsibility to provide the default fund and loss sharing pool contributions remains with the Direct Clearing Client. Direct Clearing Client’s positions and collateral are fully segregated from the Clearing Member and there is a one-to-one relationship between each Direct Clearing Client’s account and custody account. The physical settlement flows of Direct Clearing Client are separate from the settlement flows of its Direct Clearing Agent, meaning that the Direct Clearing Client has its separate Delivery account. All communication between Nasdaq Clearing and the Direct Clearing Client takes place through the Direct Clearing Agent.


Indirect Clearing Account

Clearing Members providing indirect clearing services are required to segregate positions and collateral of their clients from their indirect clients. Nasdaq Clearing offers the below segregation models for indirect clearing in line with the requirements under MiFIR and EMIR: 

  • Net Omnibus Segregated Account (NOSA) 
  • Gross Omnibus Segregated Account (GOSA) 
  • Indirect Pledge Account for indirect clients  
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