The freight market is settled in USD and the member has to cover the settlements with cash on a collateral and settlement account held in our settlement bank DNB in New York. The cash held on this account can be used to cover the margin requirements and base collateral requirement in addition to the settlements. The account is a segregated account in NOS’ name where NOS is the account holder and identified as holding the particular clearing member’s collateral. The cash deposit by the customer is pledged to NOS. The accounts are regulated by the appendix 3 to the Rulebook.
Interest paid on the collateral and settlement account is found here.
The members may use a Stand by Letter of Credit (LOC) in USD to cover the margin requirements and base collateral requirement. The LOC has to be on the NOS standard wording as per the appendix 4 to the Rulebook. The LOC can not be used to cover daily settlements.
The member may withdraw the excessive collateral posted as cash by sending NOS a cash release form signed by an authorized signature. The excessive cash collateral is shown on the "daily summary report" as well as in the Clearing Online Application (COA).