clearing Costs

CCP costs originate from a variety of activities and sources. We have alternatives to keep clearing costs down.

CCPs charge for their services in a variety of ways. Costs can include:

  • Event based fees such as new trades
  • Annual portfolio holding fees
  • Lifecycle event fees such as terminations and compression
  • Account structure fees
  • Margin broken down into various components
  • A membership fee for direct members
  • Portfolio transfer fees

 

Cassini offers strategic alternatives to enable CCP costs to be managed and reduced.


With Cassini you can:


Measure IM on your cleared portfolio


Calculate IM on cleared, uncleared, ETD and Prime Broker portfolios


Compress your portfolio into IMM Swaps and Swap Futures


Move trades between FCMs to reduce margin


Optimize the assets posted to a CCP

Reduce IM by porting trades into Clearing

Your cleared portfolio will contain trades which are mandated to clear. The clearing mandate rules are specific and leave out some varieties of OTC trades which can be cleared, even if not mandatory.

Porting trades into clearing only makes sense if the outcome is margin reducing, something our porting service handles intelligently.


With Cassini you can:


Find trades which reduce cleared IM


Find ways to reduce IM by porting trades


Only find IM reducing trade porting scenarios


Understand the before/after impact of porting

take advantage of porting

switch trades between fcms

Industry good practice is to have multiple FCMs between you and each CCP. This reduces risk is one of your FCMs had operational or structural issues.

At the point of execution you may route trades due to market conditions and pricing, but later the effect of portfolio changes and market conditions may mean the net risk at each FCM could be re-balanced.


With Cassini you can:


Balance IM  between multiple FCMs with a single CCP


Reduce IM by porting trades between FCMs


Only find IM reducing trade porting scenarios


Understand the before/after impact of porting

take advantage of porting

compressing into imm swaps or swap futures

Evolution of the cleared swap market delivered interest rate products which are equivalent to OTC swaps. Eris Futures and MAC Swap Futures are an alternative way to transfer risk.

Both these products are cleared and have beneficial margin requirements:

  • Cleared OTC swap IM: 5-day or 7-day VaR
  • Cleared Swap Future IM: 2-day VaR 

With Cassini you can:


Select the target compression products


See a risk profile and replacement trade portfolio


Analyze cleared or uncleared portfolios


Understand the before/after impact of compression

take advantage of compression

WANT TO FIND OUT MORE ABOUT managing ccp costs?

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