Segregation and Portability
Each Central Counterparty and each Clearing Member (CM) must offer at least two models to segregate positions and collaterals: Individual segregation where positions and assets of a single client are recorded in separate records and accounts and omnibus segregation where positions and assets of a group of clients are recorded in separate records and accounts. This segregation protects the clients’ assets against losses resulting from other clients’ or Clearing Members’ positions.
ECC offers different EMIR compliant models to segregate positions and assets of clients from those of their Clearing Members or other clients, if requested by the client. The assets or positions are held in separate accounts that are reported to the Clearing Member or client. The Clearing Member has the option to set up a separate collateral pool for its house account. By default, the proprietary pool is separated from the standard collateral pool by value.
- Individually segregated clients benefit from full protection of their positions and assets. In case of a Clearing Member Default, ECC will immediately trigger the process for transferring positions and segregated collateral to a new Clearing Member specified by the Non-Clearing Member (NCM). The new Clearing Member must accept the transfer.
- Omnibus clients may choose between different models to protect their positions and assets.
- Depending on the level of segregation and type of assets posted as collateral, the individually or omnibus segregated clients are entitled to a portion of the collateral remaining in the standard collateral pool after the default management process has been completed by ECC.
- The Clearing Member has the option to set up a separate collateral pool for its house account. By default, the proprietary pool is separated from the standard collateral pool by value.
- The set-up of Simple Omnibus and Omnibus Segregation has to be requested by the Clearing Member whilst, setup of Individual Omnibus is by the Non-Clearing Member and the Clearing Member.