Clearing-houses take such correlations into account when setting the overall amount of collateral they demand from their customers, a technique called "cross-margining" or "portfolio margining".
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Other products slated for development in 2018 include portfolio margining service, LCH Spider.
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So your argument is that increasing scale is, of itself, a risk for the margining system.
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CME Group boasts that its portfolio-margining service can cut margin requirements by 54-80%. LCH.
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Once again the Chinese authorities are pulling all their margining and fee levers to tame the animal spirits.
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She added that the main elements of EMIR, on mandatory clearing and margining for non-cleared derivatives, have only recently come into operation.
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This relatively large repo book is collateralized by U.S. government and federal agency mortgage-backed securities, requiring daily margining, mitigating the credit risk.
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The logic of that argument is difficult to follow, unless the true danger you wish to avoid is of an administrative "cock-up" over margining.
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If the two entities combined, they could use cross-margining to reduce the amount of collateral such customers needed, gaining an advantage over the competition.
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For Amundi, LCH's portfolio margining capabilities were a key consideration, providing the firm with the ability to offset risk of correlated contracts and make margin savings.
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For regulators, the biggest stumbling block is the combination of listed and OTC liquidity pools through portfolio margining, enabling clients to net swaps and futures exposures.
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But failures of clearing houses are very rare and have tended to occur at young clearing houses with one main commodity and inadequate systems of margining.
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The theory is that "cross-margining" kicks in, and clients can put up less collateral if they deal with a combined exchange than they would today.
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Margining refers to the practice in futures markets, wherein investors have to cough up only a chunk of the notional value contract, allowing them to take bigger positions.
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The merged company would allow for significant cross-margining of listed and over-the-counter derivatives for customers, "freeing up capital for their global investment bank clearing members".
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The FSB framework also includes trading volumes, pricing, clearing and margining for derivatives linked to crypto assets, such as the bitcoin futures launched by CME Group last December.
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However, the associated credit risk appears manageable since the relatively large repo book is collateralized by U.S. government and federal agency mortgage-backed securities, which require daily margining.
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Once very distinct markets, over-the-counter and listed derivatives liquidity pools are becoming increasingly merged through portfolio margining, which enables clients to net swaps exposures with listed futures and options.
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Financial players, on the other hand, have no interest in the "official" prices but do care a lot about the "closing" prices because they have mark-to-market and margining impact.
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LCH also plans to supply risk calculation data to the AcadiaSoft Hub to further streamline the margining process for the banks already using the product to comply with the non-cleared margin rules.
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CME is currently working with the Fixed Income Clearing Corp arm of the Depository Trust & Clearing Corporation on cross-margining arrangements as a result of the deal, said Sunil Cutinho, president of CME Clearing.
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A portfolio manager at a macro-hedge fund in London said he uses futures to take bets on Italian debt because the margining system in futures contracts makes it less capital intensive than purchasing bonds.
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More than 30,000 TRF contracts have traded over the Eurex derivatives exchange, defying the notoriously low success rate for new futures launches even as mandatory margining of uncleared derivatives drives a shift to listed alternatives.
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"As the non-cleared market for interest rate derivatives becomes increasingly complex, we welcome innovative solutions like LCH SwapAgent that help simplify the bilateral margining process, while enabling market participants to comply with the uncleared margin rules," said Stuart Bancroft, managing director, CVA trading at Citi.
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Portfolio Credit Quality/Diversification The fund seeks to maintain high credit quality by investing exclusively in securities issued by the Kingdom of Morocco (BBB-/Stable) or high-quality and publicly-rated issuers or counterparties, and in repurchase agreements collateralised by government bonds, with adequate margining procedures and a sound legal framework.
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In this manner, SPAN provides for offsets between correlated positions and enhances margining efficiency.
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There are four irregular pale golden-metallic fasciae, with the costal extremities white, the first two margining the orange fascia, the third median, enclosing a dot of ground colour above the middle, the fourth at three-fourths, terminating above in a large quadrate ochreous-white spot. The hindwings are grey.
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The outer lip is convex, a little contracted below, thickened inside, with a rather deep and narrow sinus above, its margins thickly callous. The columella is subvertical, drawn out to a fine point below. The inner lip is smooth, broad, and thick, extending over the parietal wall, which has a prominent tubercle margining the sinus. The operculum is unknown.
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The following year, it acquired Brody White and diversified into commodities. The Global FX product line launched in 1999. Fimat began cross-margining with its Fimatrix project in 2001. It acquired the assets of Preferred Trade in the United States in 2005, Cube Financial the next year, and Japanese commodity broker Himawari the year after that.
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The Standard Portfolio Analysis of Risk, or SPAN, is a system for calculating margin requirements for futures and options on futures. It was developed by the Chicago Mercantile Exchange in 1988. SPAN is a portfolio margining method that uses grid simulation. It calculates the likely loss in a set of derivative positions (also called a portfolio) and sets this value as the initial margin payable by the firm holding the portfolio.
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This subspecies is native to East Africa. It occurs in South Sudan, to the west of the Nile, Uganda and the north-eastern Democratic Republic of Congo. Its range used to extend into northwestern Tanzania, where it grazed the grasslands margining Lake Victoria, and into southwestern Kenya, but it has been extirpated from these countries. It is typically found in open or wooded savanna, within a reasonable distance of water, and it also occurs in grasslands near rivers and lakes.
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Environmental stresses are applied in a HALT procedure, eventually reaching a level significantly beyond that expected during use. The stresses used in HALT are typically hot and cold temperatures, temperature cycles, random vibration, power margining, and power cycling. The product under test is in operation during HALT and is continuously monitored for failures. As stress-induced failures occur, the cause should be determined, and if possible, the problem should be repaired so that the test can continue to find other weaknesses.
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Telphusa improvida is a moth of the family Gelechiidae. It is found in southern India.Telphusa at funet The wingspan is 8–9 mm. The forewings are grey with sprinkled black scales and elongate suffused black marks on the costa towards the base, about one-third, and a longer one beyond the middle, irregular and variable brownish-ochreous suffusion partially margining these beneath and posteriorly and tending to form three oblique incomplete fasciae and an irregular spot on the end of the cell.
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At the suture there is a double smaller rib, and there is a finer one posterior to the periphery. The transverse riblets of the penultimate whorl show increasing revolution of the whorls and become more slender and closer together. And thus the fenestrated ornament is somewhat obscured on the front part of the body whorl. Below the periphery there are about five revolving equal-sized ribs, more or less gemmulated at the intersections of transverse sigmoidal threads, the one margining the umbilicus most conspicuously so.
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Entities that qualify for EMIR must report every derivative contract they enter into to a trade repository. They must also implement new risk management standards according to EMIR, including operational processes and margining related to their bilateral OTC derivatives. EMIR also covers trades that are not cleared by a central counterparty, and entities that qualify must submit all OTC derivatives subject to a mandatory clearing obligation for review. Counterparties must file reports wherever they enter into derivatives transactions, in the European Economic Area or elsewhere.
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European Commodity Clearing (ECC) is the leading clearing house for energy and commodity products in Europe and the central clearing house for the Global Commodity Exchange, EEX Group. ECC assumes the counterparty risk and guarantees the physical and financial settlement of transactions, providing security and cross-margining benefits for its customers. As part of EEX Group, ECC provides clearing services for EEX, EEX Asia and EPEX SPOT with additional services provided to Power Exchange Central Europe (PXE). In addition, ECC also provides clearing services for the partner exchanges HUPX, HUDEX, NOREXECO, SEEPEX and SEMOpx.
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Instruments are being embedded into chips and utilized to validate circuit board designs. This sort of design validation can make use of a variety of embedded instruments such as bit error rate test (BERT) engines, BIST) for logic devices, margining engines, memory BIST, memory test, random pattern generators and a complete logic analyzer. Deployed in design validation applications, these embedded instruments may function inside the chip or across on-board chip-to-chip interconnects to validate the performance and functionality of a circuit board design before it moves into volume production.
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This ocherous hue overspreads the whole apical half of the wing. On the disc, before the middle, margining the creamy white anterior part of the wing, is an oblique black transverse spot which is narrowly separated by ocherous-yellow scales from a large somewhat diffuse brownish patch which covers the end of the cell and fades out gradually into the ocherous hue of that part of the wing. The extreme costa is marked throughout its length by small purple brown spots, which also extend around the apex at the base of the cilia which are greyish ocherous.Cincinnati Q. J. Sci.
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The forewings are dark purple fuscous with a rather oblique orange streak from the costa near the base not reaching the dorsum and three moderate orange transverse fasciae, the first at one-fourth, marked with one or two dark dots, the second beyond the middle, irregularly obliquely interrupted below the middle and the third almost terminal, leaving a slender terminal streak on which are three orange dots. Alternating with these are three broad glossy dark leaden fasciae occupying the whole space except for narrow irregular streaks margining the fasciae. The hindwings are dark fuscous.Transactions of the Entomological Society of London.
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The forewings are ochreous whitish or pale whitish ochreous with three cloudy grey spots on the anterior half of the costa and a patch from beyond the middle to near the apex. Other markings are formed of black irroration (sprinkling), namely four irregular patches along the dorsum, several irregular variable spots in the disc between the base and the middle, an elongate patch or streak margining the posterior costal patch beneath, and a streak along the upper part of the termen. The hindwings are dark grey, thinly scaled in the disc anteriorly.Transactions of the Entomological Society of London.
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The new combined company, Newedge Group, formed in 2008, and primarily serves institutional clients, offering products involved in global asset execution, global asset clearing, prime brokerage solutions, global asset financing and market research. The firm is also versed in navigating money market instruments, bonds, currencies, equities, and commodities on the OTC market. In addition to these products, Newedge offers an electronic platform for trading and order routing, cross margining, and the processing and centralized reporting of client portfolios. Newedge's market coverage includes ETFs (exchange traded funds), cash markets and OTC derivatives pertaining to fixed income, interest rates, commodities, Forex (foreign exchange), metals, equities and indexes, and energy and emissions.
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The result is that forwards have higher credit risk than futures, and that funding is charged differently. The situation for forwards, however, where no daily true-up takes place in turn creates credit risk for forwards, but not so much for futures. Simply put, the risk of a forward contract is that the supplier will be unable to deliver the referenced asset, or that the buyer will be unable to pay for it on the delivery date or the date at which the opening party closes the contract. The margining of futures eliminates much of this credit risk by forcing the holders to update daily to the price of an equivalent forward purchased that day.
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The forewings are rather dark ferruginous brown with an upwards-curved yellowish-white streak from the middle of the base to two- thirds of the disc, margined beneath with blackish, above with bright yellow ochreous, which extends to the costa towards the base. There is a slender white oblique streak from two-thirds of the costa to the middle of the disc, margining a triangular costal suffused patch of purplish-grey and whitish scales, beneath which is sometimes a longitudinal blackish suffusion. A black dot is found in the disc at two-thirds, surrounded by a yellowish-white ring. There are some purplish-grey scales towards the posterior half of the inner margin and a small white spot on the costa at four-fifths, beyond which is a blackish suffusion.
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The forewings are rather dark fuscous, becoming dark fuscous on the costa and with a median streak from one-fourth to the apex, and a streak from the base of the dorsum to the fold at one-third, with numerous irregular white markings: two subcostal dashes anteriorly and one on the costa before the middle, a V-shaped mark enclosing the anterior end of the median streak, irregular lines margining the streak from the base of the dorsum, four elongate marks in the disc from one-third to four-fifths, some irregular suffusion on the dorsal area beneath these, five or six marks occupying the tornal and terminal area, a short transverse mark on the costa at four-fifths, and a longitudinal mark to the costa above the apex extended into the cilia. The hindwings are pale bluish grey.Exotic Microlepidoptera. 3 (16): 500.
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Coleotechnites cristatella is a moth of the family Gelechiidae. It is found in North America, where it has been recorded from Kentucky.Coleotechnites at funetmothphotographersgroup The base of the forewings is dark brown, mixed with white and with a distinct tuft on the fold margining the dark brown basal portion behind, then follows an oblique white costal streak crossing the fold and interrupted on the fold. Behind this, another dark brown band crosses the middle of the wing, margined behind by two raised tufts, one of which is above and the other beneath the fold, and followed by a transverse band of mixed white and brown, which is margined in part behind, by a brown tuft within the dorsal margin nearly opposite the beginning of the cilia, behind which the apical part of the wing is brown sprinkled with white, except a short slightly curved dorsal white streak at the beginning of the cilia, and a similar larger opposite costal streak.
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