BME Clearing, the Central Counterparty (CCP) operated by BME, has introduced two new access models for institutional clients which allow the registration of trades in the REPO and SWAPS segments, the ones with the heaviest capital requirements for clearing members.
With this offer to all institutional clients multilateral netting is facilitated and capital efficiency is improved as well as market liquidity.
The two models are the following:
1) The Agency model, whereby the client’s direct counterparty is the CCP, the clearing member being jointly liable with client before the CCP. According to this model the client directly posts margins in the CCP while the clearing member is an operational agent and jointly liable with the client before the CCP. Margins posted by the client are not the balance sheet of the clearing member. Sixteen clients have opened accounts of this type in the REPO segment.
2) The Principal-to-Principalmodel, with two counterparty relationships, one whereby the client is a direct counterparty with the clearing member and another one where the clearing member is a counterparty with the CCP, the clearer being solely liable before the CCP.