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Singapore Exchange Regulation (SGX RegCo) is consulting the market on proposed changes to the Central Depository’s (CDP) margining framework and the CDP Clearing Fund. CDP collects margins and Clearing Fund contributions to mitigate the impact a Clearing Member default could have on the rest of the financial system.
The proposed margin changes are to:
- Offer differentiated margin rates for groups of securities with different risk profiles so margins will commensurate more closely with the level of risk brought to the system.
- Introduce margin offsets for greater efficiency.
- Enhance anti-procyclicality measures to better temper sudden margin increases.
The proposed Clearing Fund changes are to:
- Change the approach for sizing the Clearing Fund and Clearing Members’ contribution so that they will move more dynamically in tandem with the level of risk brought to the clearing system.
- Defer the use of Clearing Members’ contingent contributions until after all other sources of the Clearing Fund have been used.
- Place a cap on Clearing Members’ Clearing Fund liability to give them certainty on their maximum exposure.
The public consultation is found here and will close on 5 December 2022.
