Credit Risk Mitigation for the London Gold Forwards Market

By offering our clearing house experience, financial safeguards and post-transaction services, CME Group is uniquely positioned to provide counterparty credit risk mitigation services to the OTC London gold forward market with our Cleared OTC London Gold Forwards contracts. This service provides centralized clearing, settlement and delivery for OTC London unallocated gold forwards. The Exchange offers two contracts: Cleared OTC London Gold Forwards (Collateral Margin) and Cleared OTC London Gold Forwards (Cash Margin).

Mitigate counterparty credit risk. CME ClearPort uses a central counterparty clearing model, where counterparty credit risk is shared among clearing members. This allows the central clearing house to guarantee the performance of every transaction – and the security of every clearing member’s customer. CME ClearPort gives you access to neutral valuations and our daily mark-to-market process enables you to track positions accurately and assess risk.

Trades can be submitted for clearing through CME ClearPort up to and including one good business day prior to the delivery date. Clearing coverage for all good forward maturities that are deliverable into unallocated “London Good Delivery” gold (as defined by the LBMA2) extends 10 years out.

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