Guide to ASX Clear (Futures) Clearing and Margining
Central to CCP clearing is the process of 'novation', which involves ASX Clear (Futures) interposing itself between a buyer and a seller (ASX 24 Clearing Participants) and becoming the central counterparty or principal to all trades.
The process of novation provides a number of benefits for users including surety of payment, margin netting, risk management and liquidity.
Key to the financial integrity of ASX Clear (Futures) as the CCP is the administration of both Initial and Variation Margins that minimise ASX Clear (Futures) exposure to changes in market prices (i.e. Market Risk) and counter-party failure (i.e. Credit Risk).Please follow this link for information regarding ASX 24 Risk Management & Clearing.