Client Protection Regime
Under the Gross Client Margin (GCM) regime, clients of Clearing Members are now able to protect and transfer their positions if their Clearing Member is suspended from CDCC's membership. Portability of client positions and collateral provides an opportunity to manage open positions, under stressed market conditions, while limiting the impact on the client. Porting helps to minimize costs and to maintain continuous clearing access and generally promotes efficient financial markets.
This protection applies to all Open Positions on Futures and Futures Options, other than Hedge Open Positions. To segregate the GCM client collateral from other clients' and firm collateral, CDCC has created 3 new distinct collateral pools (Firm, GCM, Non-GCM), where the margin requirement is independently aggregated. Moreover, this will enable CDCC to avoid any excess of the client pool (GCM or Non-GCM) to cover the deficit from another pool.
Under GCM, CDCC will require the Clearing Member to disclose each client's positions held in the CDCC client Omnibus account to the CCP daily. The requirements for GCM and daily client position reporting should ensure that CDCC has adequate aggregate collateral and position information to allow for a more rapid porting of client positions and related imputed collateral value from a suspended clearing member to a receiving clearing member.
For more information on how to beneficiate from this protection, please refer to the following:
