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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 from house accounts as well as from other client accounts.

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 or as a client to a clearing member. The different options for accessing the markets are further described below.

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 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 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 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 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 account for direct clearing. 


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 does 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 does 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 opens up an IDP account enters 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. 


Clearing Clients (CC) 

A Clearing Client is an entity that has been approved by the clearing house to clear on its own behalf. The Clearing Client is account holder of its clearing account(s) but is not a member of the exchange or the clearing house. Trading for a Clearing Client is always done through a Client Representative. A Clearing Client is authorized to handle its own settlement and post its own collateral, but can also agree to outsource this to a Client Representative. The Clearing Client model is only available on the Nasdaq Commodities market. Direct Pledging Customers (DP) A Direct Pledging Customer is an entity that trade through a number of different executing members, but wish to consolidate their positions into one single clearing account with one clearing member to benefit from netting. A Direct Pledging Customer is approved by the clearing house to clear on its own behalf and is authorized to handle its own settlement and post its own collateral, but can also agree to outsource this to a clearing member. The Direct Pledge model is only available on the Nasdaq Derivatives Markets. 


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.


Direct Pledge Client Accounts

This account type can be used by clients that trade through a number of different executing members, but wish to consolidate their positions into one single clearing account with one clearing member to benefit from netting. Typically, large institutions trading with several banks or brokerage firms use this account structure. This account type is only available for financial members.

Trading and clearing accounts are set up separately

  • B1 Clearing Account:
    The B1 Account is clearing only.
  • B2 Trading Account:
    The B2 account is trading only. Several B2 accounts set up with different members can be linked to one B1 account. The B2 account has automatic position propagation to the B1 account. When a trade is registered on the B2 account, its position is automatically recorded on the linked B1 account.
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