KELER CCP provides derivative market clearing for the Budapest Stock Exchange (BSE) in the following segments:
- BSE Commodities section
- BSE Financial products
- BSE Equity and index products
KELER CCP receives the trades in real time that are matched and were executed in line with segregation, and keeps the positions in real time. Not later than the end of the day, KELER CCP registers the trades that were not allocated during the day on the Clearing Member own account.
At the moment the transactions are accepted KELER CCP novates them. With novation KELER CCP interposes itself between the counterparties of the original transaction, and becomes the buyer of the seller and the seller of the buyer. This way KELER CCP eliminates counterparty risk.
Transactions are cleared in line with the ’mark-to-market’ principle, with the variation margin of derivative trades determined each day and settled the following day. Based on the ’mark-to-market’ principle, on trade day the variation margin is determined based on trade price and the same day settlement price, thereafter it is the difference of the same day and the previous day settlement prices for open positions.
When option transactions are cleared, the option premium is settled financially, i.e. the option holder (the buyer of the option) meets the obligation of option premium payment as part of the daily variation margin, after which it has no payment obligation until the exercise / expiry date of the option.
KELER CCP calculates margin requirement for the open derivative positions, that is to be met until 8:50 on the 1. (first) clearing day after calculation.
The financial settlement of derivative market transactions is completed at 8:50 on the 1. (first) clearing day after the day the transaction is made (8:50 on T+1, where T = Transaction Day).
As part of intraday clearing, KELER CCP may make margin calls on open positions during the day; this call is to be met within 15 minutes of being made.