Cross margining

From MarketsWiki

Cross margining is a procedure for margining related securities, options and futures contracts together when different clearing organizations clear each side of the position. ^[1]

The CME (CME) and London Clearing House (LCH) initiated^[2] the world’s first cross-margining program across international borders. The cross-margining program enables CME and LCH to provide risk-based cost savings to clearing member firms and their affiliates who have positions in the CME Eurodollar contract and the LIFFE/NYSE Euronext Euribor or Euro LIBOR contracts.^[3]

Agreements

CME Group also has an agreement with the Fixed Income Clearing Corporation for cross margining.^[4]

The Clearing Corporation announced a cross-margining agreement with Fixed Income Clearing Corporation on February 18, 2005 that allowed trades in 2, 5, 10 and 30-year Treasury futures on the then Eurex US exchange to be cross margined.

References

1. ↑ Glossary of terms. U.S. Commodity Futures Trading Commission. Retrieved on February 2, 2008.
2. ↑ The Chicago Mercantile Exchang's Proposal to Establish a Cross-Margining Program with the London Clearing House. U.S. Commodity Futures Trading Commission. Retrieved on February 2, 2008.
3. ↑ Press Release. CME. Retrieved on February 2, 2008.
4. ↑ FIXED INCOME CLEARING CORPORATION/CHICAGO MERCANTILE EXCHANGE INC.. Fixed Income Clearing Corporation. Retrieved on February 2, 2008.