For all transactions transferred to ECC, ECC acts as a central counterparty which places itself between the seller and the buyer. ECC and its Clearing Members assume the trading participants’ counterparty risk and exploit the entire netting and cross-margining potential in the course of settlement.
Integrated Settlement (Straight-Through Processing)
A connective IT landscape supports all clearing and settlement functions, provides secure transaction management at low transaction costs and integrates all Partner Exchanges, Clearing Members and trading participants.
ECC uses its margin system to manage counterparty risk. This margin system has several lines of defence which provide protection against the default of counterparties:
- daily profit and loss settlement
- margins for open net positions based on the size of the position and the volatility of the underlying
- all Clearing Members and ECC contribute to a mutual Clearing Fund
Settlement services include:
- Payments for Variation Margin
- Cash settlement
- Option premiums and deliveries
- Physical delivery/nomination
Financial settlement of transactions between ECC and its Clearing Members is based on central bank funds. The payment system of the European central banks contributes considerably to ECC’s highly reliable settlement procedures.
ECC is a clearing house specialising in the settlement of deliveries. Its experience includes:
- deliveries of power and natural gas within the transmission grid of currently 30 European transmission system operators from 17 countries,
- managing deliveries of EU Emissions Allowances and Certified Emission Reductions at European registries.
The ECC Clearing & Settlement Team supports Partner Exchanges, Clearing Members and trading participants in their daily work. This contains any kind of question during the admission, settlement and clearing process.