CONSEQUENCES SCENARIO 1
6.2.2 Operating model "B" or Net Margination Model
Below we provide a summary of the various cases found in the operating model B or net margination model.
The following table shows the different scenarios encountered in moving from one case to the another one: the move from one case to the other is in each case represented by a change of settlement agent and/or a change in participation to the Central Counterparty.
The following diagram shows an instance for each case indicating the subject to which the bilateral balance refers to.
Move from case 1 to case 3A
SCENARIO
The trader moves from being direct to indirect in the settlement system
The trader is no longer directly associated with the CCP (individual clearing member) but operates through a general clearing member (the trader's account will be same as the GCM account)
CONSEQUENCES
The trader, both in its role as "replaced" settlement agent and individual clearing member, can no longer view its own transactions, neither as issuer or counterparty
The "incoming" settlement agent/GCM can view the transactions of the trader that was previously directly involved in settlement
The following data is subject to changes on the transaction:
o settlement agent
o general clearing member o settlement account
o code of the participant that owns the bilateral net balance
The following data is subject to changes on the bilateral net balance:
o issuer
o negotiation type (in certain instances) o settlement agent
o settlement account
Move from case 3A to case 1
SCENARIO
The trader moves from an indirect participation in the settlement process to a direct one
The trader moves from indirect membership in the CCP to a direct one
CONSEQUENCES
The "replaced" settlement agent, also as GCM, can no longer view the trader’s transactions
The "incoming" settlement agent, that is also the trader and ICM, has full visibility of all the transactions regardless of the role performed
The following data is subject to changes on the transaction:
o settlement agent
o general clearing member o settlement account
o code of the participant that owns the bilateral net balance
The following data is subject to changes on the bilateral net balance:
o issuer
o negotiation type (in certain instances) o settlement agent
o settlement account
Move from case 1 to case 4
SCENARIO
The trader moves from direct in the clearing operation to indirect (operating through a settlement agent)
The trader maintains a direct participation to the counterparty
CONSEQUENCES
The "incoming" settlement agent (of the trader and the GCM) can view the transactions of the trader that was previously directly appointed in clearing
The trader, in its role as "replaced" settlement agent, can no longer view its own transactions
The following data is subject to changes on the transaction:
o settlement agent o settlement account
The following data is subject to changes on the bilateral net balance:
o settlement agent
o Settlement account
Move from case 4 to case 1
SCENARIO
The trader moves from indirect to direct in clearing The trader maintains a direct participation to the CCP CONSEQUENCES
The "incoming" settlement agent that is also the trader and individual clearing member, has full visibility of all the transactions regardless of the role performed
The "replaced" settlement agent can no longer view the trader’s transactions
The following data is subject to changes on the transaction:
o settlement agent o settlement account
The following data is subject to changes on the bilateral net balance:
o settlement agent o settlement account
Move from case 1 to case 5A
SCENARIO
The trader is no longer a direct participant in the CCP but operates through a general clearing member
The trader moves from being directly appointed in the clearing operation to take an indirect role using the same settlement agent as the GCM. Please note the trader account is the same as the clearing member's account
CONSEQUENCES
The trader, in its role as "replaced" settlement agent, can no longer view its own transactions
The "incoming" settlement agent can view all the transactions of the trader that was previously directly involved in the settlement process
The general clearing member has a full view of the bilateral balances set up in its name
The following data is subject to changes on the transaction:
o settlement agent
o general clearing member o settlement account
o code of the participant that owns the bilateral net balance
The following data is subject to changes on the bilateral net balance:
o settlement agent o settlement account o issuer
o negotiation type (in certain instances)
Move from case 5A to case 1
SCENARIO
The trader moves from indirect to direct in settlement system
The trader moves from an indirect participation of the CCP to a direct one
CONSEQUENCES
The "replaced" settlement agent can no longer view the trader’s transactions
The "incoming" settlement agent, which coincides with the trader, has a full view of its own transactions
The "replaced" general clearing member can no longer view the transactions, due to its direct participation to the trader's CCP
The trader, in its role as "incoming" settlement agent, has a full view of its own transactions thanks to its direct participation to the CCP
The bilateral balances created in the name of the general clearing member are taken on by the trader
The following data is subject to changes on the transaction:
o settlement agent
o general clearing member o settlement account
The following data is subject to changes on the bilateral net balance:
o settlement agent o settlement account o issuer
o negotiation type (in certain instances)
Move from case 2 to case 3B
COMBINED SCENARIO SCENARIO 1
The trader moves from direct to indirect in the settlement system using the same GCM. The settlement agent must use two different accounts for the trader and the GCM
SCENARIO 2
The trader moves from direct to indirect in the settlement system and change the general clearing member. The settlement agent must use two different accounts for the trader and the GCM
CONSEQUENCES SCENARIO 1
The trader continues to view its own transactions but no longer as "replaced" settlement agent
The trader’s "incoming" settlement agent can view all the trader’s transactions, which it could previously view in its role as GCM
The following fields are subject to change on the transaction:
o settlement agent o settlement account
The following data is subject to changes on the bilateral net balance (transaction between trader and its general clearing member):
o settlement agent o settlement account
The following data is subject to changes on the bilateral net balance (transaction between general clearing member and CCP):
o settlement account
SCENARIO 2
The trader continues to view its own transactions but no longer as "replaced" settlement agent
The "replaced" GCM can no longer view the trader’s transactions
The "incoming" GCM, even in its role as the trader's settlement agent, has a full view of the trader's transactions
The following data is subject to changes on the transaction:
o settlement agent o settlement account o general clearing member
The following data is subject to changes on the bilateral net balance (transaction between trader and its general clearing member):
o settlement agent o settlement account o issuer
o the counterparty
The following data is subject to changes on the bilateral net balance (transaction between general clearing member and CCP):
o issuer
o settlement agent o settlement account o counterparty
Move from case 3B to case 2
COMBINED SCENARIO SCENARIO 1
The trader moves from indirect to direct in the settlement system and changes General Clearing Member. The clearing member and the settlement agent coincide
SCENARIO 2
The trader moves from indirect to direct in the settlement system and changes General Clearing Member. The clearing member and the settlement agent coincide
CONSEQUENCES SCENARIO 1
The “replaced” trader’s settlement agent, can no longer view the trader’s transactions
The trader, in its role as "incoming" settlement agent, has a full view of its own transactions
The "new" General Clearing Member, which coincides with the GCM settlement agent, has a full view of the trader's transactions, thanks to its indirect participation in the CCP.
The following data is subject to changes on the transaction:
o general clearing member o settlement agent
o settlement account
o code of the participant that owns the bilateral net balance
The following data is subject to changes on the bilateral net balance (transaction between trader and its general clearing member):
o settlement agent o settlement account o the counterparty
the following data is subject to changes on the bilateral net balance (transaction between the general clearing member and the CCP):
o issuer
o settlement agent o settlement account
SCENARIO 2
The trader’s "replaced" settlement agent can no longer view the trader’s transactions
The trader, in its role as "incoming" settlement agent, has a full view of its own transactions
The general clearing member, which coincides with the GCM settlement agent, continues to have the same view of the trader's transactions
The following data is subject to changes on the transaction:
o settlement agent o settlement account
The following data is subject to changes on the bilateral net balance (transaction between trader and its general clearing member):
o settlement agent o settlement account
Move from case 2 to case 5B
SCENARIO
The trader moves from direct to indirect in the settlement system and changes the GCM. The new trader and GCM settlement agent must use different accounts CONSEQUENCES
The trader continues to view its own transactions but no longer as "replaced" settlement agent
The "replaced" GCM, can no longer view the trader’s transactions
The "new" settlement agent of the trader and general clearing member can view all the trader’s and new GCM’s transactions
The "new" general clearing member can view the trader's transactions, seeing as the new subject is required to interface with the CCP
The following data is subject to changes on the transaction:
o general clearing member o settlement agent
o settlement account
o code of the participant that owns the bilateral net balance
The following data is subject to changes on the bilateral net balance (transaction between trader and its general clearing member):
o settlement agent o settlement account o counterparty
The following data is subject to changes on the bilateral net balance (transaction between general clearing member and CCP):
o issuer
o settlement account
Move from case 5B to case 2
SCENARIO
The trader moves from indirect to direct in the settlement system and changes GCM
CONSEQUENCES
The trader, that is the same with the "incoming" settlement agent, has a full view of its own transactions, but not as GCM settlement agent
The "replaced" settlement agent can no longer view the trader’s transactions
The "new" general clearing member, that is the same with its own settlement agent, has a full view of the trader's transactions, thanks to its indirect membership in the CCP
The following data is subject to changes on the transaction:
o general clearing member o settlement agent
o settlement account
o code of the participant that owns the bilateral net balance
The following data is subject to changes on the bilateral net balance (transaction between trader and its general clearing member):
o settlement agent o settlement account o counterparty
The following data is subject to changes on the bilateral net balance (transaction between general clearing member and CCP):
o issuer
o settlement account
Move from case 3A to case 4
COMBINED SCENARIO SCENARIO 1
The trader moves from an indirect participation to the CCP to a direct one and it maintains the previous GCM’s settlement agent
SCENARIO 2
The trader moves from an indirect participation to the CCP to a direct one and it resorts a new settlement agent
CONSEQUENCES SCENARIO 1
The trader acquires the visibility of its balances in its role as ICM
The "replaced" GCM can no longer view the trader's balances, but retains visibility over them in its role as settlement agent
The settlement agent continues to have the same visibility over the trader’s transactions compared to the pre-variation situation seeing as the settlement agent has remained the same
The following data is subject to changes on the transaction:
o general clearing member
o code of the participant that owns the bilateral net balance
The following data is subject to changes on the bilateral net balance (transaction between general clearing member and CCP):
o issuer
o negotiation type (in certain instances)
SCENARIO 2
The trader acquires the visibility of its balances in its role as ICM
The "replaced" GCM can no longer view the trader's transactions even in its role as
"replaced" settlement agent
The "new" trader’s settlement agent, that is the ICM, can now view all transactions
The following data is subject to changes on the transaction:
o settlement agent
o general clearing member o settlement account
o code of the participant that owns the bilateral net balance
The following data is subject to changes on the bilateral net balance (transaction between general clearing member and CCP):
o issuer
o negotiation type (in certain instances) o settlement agent
o settlement account
Move from case 4 to case 3A
SCENARIO
The trader moves from a direct registration to the CCP to an indirect participation in the CCP
CONSEQUENCES
The "replaced" ICM can no longer view the trader’s balances
The "incoming" GCM can view the trader’s balances
The settlement agent continues to have the same visibility over the trader’s transactions as it had in the pre-variation situation seeing as the settlement agent has remained the same
The following data is subject to changes on the transaction:
o general clearing member
o code of the subject that owns the bilateral net balance
Only the field relative to the general clearing member is subject to changes on the transaction
The following data is subject to changes on the bilateral net balance (transaction between general clearing member and CCP):
o issuer
o negotiation type (in certain instances)
Move from case 3A to case 5A
COMBINED SCENARIO SCENARIO 1
The trader changes GCM while using the same settlement agent
SCENARIO 2
The trader changes GCM and at the same time changes its settlement agent which must coincide with the one of the GCM
CONSEQUENCES SCENARIO 1
The trader’s settlement agent continues to view the trader’s transactions, but no longer as "replaced" GCM
The "incoming" GCM can view the trader’s transactions
The following data is subject to changes on the transaction:
o general clearing member
o code of the participant that owns the bilateral net balance
SCENARIO 2
The "old" trader settlement agent can no longer view the transactions
The "incoming" settlement agent can now view the trader’s transactions
The "replaced" GCM can no longer view the trader’s transactions
The "incoming" GCM acquires the visibility of the trader’s transactions
The following data is subject to changes on the transaction:
o settlement agent
o general clearing member o settlement account
o code of the participant that owns the bilateral net balance
The following data is subject to changes on the bilateral net balance (transaction between general clearing member and CCP):
o issuer
o settlement agent o settlement account
Move from case 5A to case 3A
SCENARIO
The trader changes GCM using its own settlement agent
CONSEQUENCES
The "replaced" GCM can no longer view the trader’s balances
The "incoming" GCM can view the trader’s balances
The settlement agent continues to have the same visibility over the trader’s transactions as it had prior to the pre-variation situation seeing as the settlement agent has remained the same
The following data is subject to changes on the transaction:
o general clearing member
o code of the participant that owns the bilateral net balance
The following data is subject to changes on the bilateral net balance (transaction between general clearing member and CCP);
o issuer
Move from case 3B to case 5B
COMBINED SCENARIO SCENARIO 1
The trader changes GCM maintaining the same settlement agent that uses two different accounts for the trader and the GCM
SCENARIO 2
The trader changes GCM and changes settlement agent at the same time, which then uses two different accounts for the trader and the GCM
CONSEQUENCES SCENARIO 1
The trader’s settlement agent continues to view the trader’s transactions but no longer as "replaced" GCM
The "incoming" GCM can now view the trader’s transactions
The following data is subject to changes on the transaction:
o general clearing member
o code of the participant that owns the bilateral net balance
Only the field relative to the issuer is subject to changes on the bilateral net balance (transaction between general clearing member and CCP)
Only the field relative to the issuer is subject to changes on the bilateral net balance (transaction between trader and its general clearing member)
SCENARIO 2
The “old” trader settlement agent can no longer view the trader’s transactions, even as
"replaced" GCM
The "incoming" settlement agent acquires the visibility of the trader’s transactions
The "incoming" GCM acquires the visibility of the trader’s transactions
The following data is subject to changes on the transaction:
o settlement agent
o general clearing member o settlement account
o code of the participant that owns the bilateral net balance
The following data is subject to changes on the bilateral net balance (transaction between trader and its general clearing member):
o settlement agent o settlement account o counterparty
The following data is subject to changes on the bilateral net balance (transaction between general clearing member and CCP):
o issuer
o settlement agent o settlement account
Move from case 5B to case 3B
SCENARIO
The trader changes GCM using its own settlement agent and two different accounts
CONSEQUENCES
The "replaced" GCM can no longer view the trader’s balances
The "incoming" GCM can view the trader’s balances
The settlement agent continues to have the same visibility over the trader’s transactions as it had prior to the pre-variation situation seeing as the settlement agent has remained the same
The following data is subject to changes on the transaction:
o general clearing member
o code of the participant that owns the bilateral net balance
Only the data relative to the counterparty is subject to change on the bilateral net balance (transaction between trader and its general clearing member)
Only the data relative to the counterparty is subject to change on the bilateral net balance (transaction between general clearing member and CCP)
Move from case 4 to case 5A
COMBINED SCENARIO SCENARIO 1
The trader moves from direct to indirect participation to the CCP
SCENARIO 2
The trader moves from direct to indirect participation to the CCP and changes settlement agent using the one used by the GCM
CONSEQUENCES SCENARIO 1
The "replaced" ICM can no longer view the trader’s balances
The "incoming" GCM can view the trader’s balances
The settlement agent continues to have the same visibility over the trader’s transactions as it had prior to the pre-variation situation seeing as the settlement agent has remained the same
The following data is subject to changes on the transaction:
o general clearing member
o code of the participant that owns the bilateral net balance
The following data is subject to changes on the bilateral net balance:
o issuer
o negotiation type (in certain instances)
SCENARIO 2
The "replaced" settlement agent can no longer view the trader’s transactions
The "incoming" settlement agent can view all the transactions of the trader that was previously directly involved in settlement
The "new" general clearing member has a full view of the trader's balances, by interfacing directly with the CCP
The "replaced" general clearing member can no longer view its own transaction balances
The following data is subject to changes on the transaction:
o settlement agent
o general clearing member o settlement account
o code of the participant that owns the bilateral net balance
The following data is subject to changes on the bilateral net balance:
The following data is subject to changes on the bilateral net balance: