All trades with Nasdaq Commodities are subject to clearing with Nasdaq OMX Clearing AB (Nasdaq Clearing). Nasdaq Clearing is a multi-asset clearing house approved by the Swedish FSA (SFSA) as a central counterparty under the European Market Infrastructure Regulation (EMIR). In addition to Commodities derivatives, Nasdaq Clearing offers clearing of Equity, Index and Fixed Income Derivatives in the Nordic Markets. Read more about the full offering from Nasdaq Clearing here >>
Clearing refers to the process initiated after a buyer and seller have agreed on a trade. Nasdaq Clearing enters into financial derivatives contracts as a contractual counterparty and assumes liability for covering the future settlement of these contracts, thereby reducing the risk for both buyer and seller. Nasdaq Clearing offers the netting of positions, enabling members to utilize their capital in the most efficient manner. These net positions are the foundation for calculating settlement and daily margin calls. Market participants wishing to clear its contracts through Nasdaq Clearing must provide collateral covering their daily margin call, in addition to the base collateral to be placed when signing the membership agreement.
Nasdaq Clearing uses the SPAN® margin call calculation system to calculate the size of the daily margin call for each member's portfolio. The daily settlement is automatic and members are connected to the settlement system through a variety of multinational settlement banks.
The clearing process can be divided into five parts; matching, central counterparty clearing, margin calculation, collateral posting and cash settlement/delivery.