Initial deposit/initial margin - KDPW_CCP

Initial deposit/initial margin

In order to increase the available transaction limit, a member may among others post additional collateral in cash or acceptable non-cash assets as follows:

  • increase the initial deposit (clearing member level);
  • increase the initial margin (collateral account level).

The minimum value of the collateral posted for the initial deposit is determined in a resolution of the KDPW_CCP Management Board

Collateral posted by a member as initial deposit and initial margin is used to secure exposures of the member’s own positions and those of all of its clients.

As a result of its monitoring of the trading session, KDPW_CCP informs the clearing member that the trading limit has been used and suggests the amount to be posted in order to reduce the limit utilisation (dedicated field in the message). The initial deposit can be replenished by means of an instruction sent to KDPW_CCP in an xml message.

Posting assets for the relevant margin increases the transaction limit of the selected client due to the principle of segregation and the rule that collateral posted by one client must not be used for the benefit of another client. Excess collateral posted as the initial margin for a particular client is returned after the clearing of the trading session on the given day unless the client flags the account to retain the excess.