After the migration, collateral will be posted directly to Collateral Custody Accounts that the member will have to open with NASDAQ OMX as account provider.
Cash amounts will be transferred on a transfer-of-title basis to NASDAQ OMX, which means that members will have an unsecured claim on NASDAQ OMX for such cash amounts. Members will transfer cash to their Collateral Custody Account by making a deposit on a designated NASDAQ OMX bank account in a commercial bank. Such deposit will be reflected on the members’ Collateral Custody Account. The cash collateral is invested in accordance with NASDAQ OMX’s EMIR compliant investment policy and an interest is calculated on the posted cash collateral. The members may choose a mix of several approved currencies when posting cash collateral. This will add flexibility and may reduce the members’ currency risk. There will be haircuts when using currencies other than the currency of the traded products. The members will be able to access the new collateral management service using the Collateral Management web application, the Genium INET API or the Clearing Workstation 1 and 2.
An introduction video to the CMS Web is available here.
The cash collateral posted on the Collateral and Settlement account with NOS will be transferred to the new Collateral Custody Account during the migration. An authorization from the member to NOS is needed (the standard cash release form may be used and filled in with the new account details for the Collateral Custody Account).
NASDAQ OMX opens up for the use of securities, e.g. bonds and equities, as collateral. Securities posted to the member’s Collateral Custody Account will remain the property of the member but will be pledged in favor of NASDAQ OMX. NASDAQ OMX will in turn hold posted securities in securities accounts in the name of NASDAQ OMX “on behalf of clients”, with Central Securities Depositories (CSDs) or International Central Securities Depositories (ICSDs) appointed by NASDAQ OMX. NASDAQ OMX will secure the members’ voting and financial rights, and correctly handle any relevant tax issue. There will be a haircut when using securities as collateral. A safekeeping fee will be charged for securities, please refer to the CMS Fee list. For more information please see Clearing Appendix 10.
Due to Emir Regulations, Bank Guarantees will not be offered as approved collateral to cover margin on Seafood or Freight. For more information regarding bank guarantees please see Clearing Appendix 10- Collateral List, letter K) and L)
The aggregated margin requirement across markets may be covered by a mix of approved collaterals; cash in different currencies and securities. To efficiently manage collateral, all members must choose a base currency. The base currency is used to present the total net collateral surplus/deficit in a single currency. Margin requirement is measured against posted collateral in each currency before being converted to a chosen base currency. There will be haircuts when using collateral with currencies other than the currency of the traded products.
Updated list of approved collateral will be available in Clearing Appendix 10.
For more details regarding the new collateral management service follow this link.
For the Collateral Management Fee List, please follow this link.
The Clearing Schedule (Appendix 3 to the Rulebook) will be updated with the NOS products during Q3. The main difference to the current NOS schedule is the deadline for covering the margin calls which will be aligned with the other products cleared by NASDAQ OMX where the deadline is 10:30 CET.