CME Clearing, our clearinghouse, clears and guarantees all matched transactions occurring through its exchanges. CME Clearing also establishes and monitors financial requirements for clearing members and sets minimum performance bond levels for all products traded on markets for which it provides clearing services.
By dealing exclusively with clearing members, CME Clearing holds our members accountable for positions, regardless of whether such positions are for the accounts of individual members (like floor traders), non-member customers (hedge funds) or the clearing member’s own account.
In turn, as the contra side to every position, CME Clearing is held accountable for our clearing members’ financial performance of all open positions.
To guarantee overall performance to our members, CME Clearing is comprised of several functional areas, including risk management, banking and collateral management, financial and regulatory surveillance, compliance, and operations.
Each team has a distinct role in administering CME Clearing’s financial safeguards.
Risk management and financial surveillance are the two primary functions administered by CME Clearing.
The risk management and financial surveillance techniques employed by CME Clearing are comprehensive and specifically designed to:
CME Clearing maintains policies and procedures to:
CME Clearing allows firms to organize their trading accounts in flexible ways that promote operational efficiency. CME Clearing defines an organizational structure that firms utilize to define their business operations.
The basic account structure definition associated with a clearing firm to pursue “normal clearing” includes a:
These accounts will be discussed in more details in a separate lesson.