Risk management for regional commodity exchanges mandates standardized margin collection, approved collateral types and daily mark to market cash settlement. Mandates risk management standards for Regional Commodity Derivatives Exchanges: maintain exposure free member deposits, levy minimum ordinary margins of 4%, and permit delivery period and additional margins based on evaluation. Ad hoc margins must be objective, non discriminatory and transparent. Ordinary margins are computed at individual client level across maturities, member margins aggregated across clients, with proprietary positions treated as client positions. All margins must be collected before the next trading day; insufficient collateral prevents position increases. Acceptable collateral is cash, pledged bank fixed deposits and bank guarantees. Daily cash mark to market settlement based on the Exchange's Daily Settlement Price is required.
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Risk management for regional commodity exchanges mandates standardized margin collection, approved collateral types and daily mark to market cash settlement.
Mandates risk management standards for Regional Commodity Derivatives Exchanges: maintain exposure free member deposits, levy minimum ordinary margins of 4%, and permit delivery period and additional margins based on evaluation. Ad hoc margins must be objective, non discriminatory and transparent. Ordinary margins are computed at individual client level across maturities, member margins aggregated across clients, with proprietary positions treated as client positions. All margins must be collected before the next trading day; insufficient collateral prevents position increases. Acceptable collateral is cash, pledged bank fixed deposits and bank guarantees. Daily cash mark to market settlement based on the Exchange's Daily Settlement Price is required.
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