Transfer of segregated clients' liabilities and collateral
A mechanism for segregated clients to transfer their liabilities and collateral between clearing participants is to be introduced on the FX Market on 1 December.
This will enable clients to manage risk associated with clearing member default.
FX Market trading member or client of a trading member can become a segregated client of a clearing member.
Each segregated client is given a specific settlement code.
Segregated clients have the right to inform the National Clearing Centre (NCC) and switch to a different clearing member in cases specified in the Clearing Rules. The transfer is made from one clearing participant to another for deals made with a settlement code attached to the segregated client. Segregated client's collateral is transferred simultaneously with its liabilities.
Base clearing member is a clearing member from which NCC transfers collateral and liabilities of a segregated client.
Recipient clearing member is a clearing member to which NCC transfers collateral and liabilities of a segregated client.
The procedure and forms for transfers can be found on the NCC's website.