mssect519mssect mssect44mssect mssect43mssect

Segregated Client on FX Market


Transfer of obligations and Collateral of a Segregated Client

Segregated Client is a client of a Clearing Member, which may use the transfer of obligations and collateral to the other Clearing Member.

One Settlement Account of the 1st level is registered for one Clearing Member.

Segregated Client has the right to forward to the NCC an application and to move to other Clearing Member (in cases defined in the Clearing Rules). Such mechanism gives an opportunity to enforce protection of non-defaulting clients from risks connected with the default of a Clearing Member.

The NCC also implemented the opportunity to protect funds of a Segregated Client: return or transfer of the Segregated Client funds is possible only in respect of accounts, which belong to a Segregated Client, or in respect of Settlement Accounts, fixed to the Segregated Client.

Presentation: Segregated Client on the FX market

Who could be the Segregated Client:

 

MP = CM

MP ≠ CM

Segregated
client:

Market Participant Client

Market Participant (Market Participant Client)

Client of a Market Participant Client

Market Participant Client

Segregated client is fixed to the particular Settlement Account. Segregated client has the right to forward to the NCC the Application for Collateral and Obligations Transfer. On the basis of such Application the NCC transfers obligations of a Segregated Client from one Clearing Member to the other Clearing Member, arising from trades, concluded with the CCP at the expense of a Segregated Client, and also transfers Collateral of a Segregated Client, recorded under such Settlement Account.

Principal Clearing Member – a Clearing Member, from which the NCC transfers obligations.

Receiving Clearing Member – a Clearing Member, to which the NCC transfers obligations.

Clearing Rulesthe Clearing Rules of the Bank “National Clearing Centre” (Joint-stock company). Part I. the Common part and the Clearing Rules of the Bank “National Clearing Centre” (Joint-stock company). Part IV. Clearing Rules on the FX market and Precious metals market.

Operating procedure for the Segregated Client registration

1.   Principal Clearing Member in advance registers in the name of a Segregated Client segregated Settlement Account of client type of the 1st level through the Application for the Settlement Account assignment in the hardcopy form or through the Request for the Settlement Account registration (CODERQ) in the form of electronic document. Account details for Collateral Return defined in this Application, shall correspond to the Segregated Client or to a Clearing Member.

Since of the date when new version of the Clearing Rules comes into effect, the Settlement Account will be registered on the basis of the Request for Trade Account registration.

2.   Principal Clearing Member forwards to the Exchange the Application for the Segregated Client registration in the hardcopy form.

New version of the Application for the Segregated Client registration is valid since of the date when the new version of the Clearing Rules comes into effect.

In the defined Application a Clearing Member gives the following information:

·         Settlement Account of the 1st level, registered for the Segregated Client;

·         name / surname and first names of the Segregated Client;

·         identification data of the Segregated Client in accordance with the registration of a client on the Exchange (personal data according to the passport, personal tax reference number)

·         details according to which the NCC will notify the Segregated Client (EDI, SWIFT, e-mail)

·         necessity to protect Segregated Client funds (is valid since of the date when new version of the Clearing Rules comes into effect) – as an option.

Registration of the Segregated Client means that the following conditions have been met:

·         is possible to conclude trades with the indication of the Settlement Account, fixed to such Segregated Client, only with the indication of the client code corresponding to the Segregated Client

·         is possible to return funds within the accounts details, payment receiver is the Segregated Client himself or a Clearing Member;

·         Segregated Client can use the procedure for Collateral and Obligations Transfer in cases stipulated by the Clearing Rules. With this aim the Segregated Client forwards to the NCC the Application on collateral and obligations transfer on his own

Registration of the Segregated Client with the indication of the necessity to protect Segregated Client funds means the compliance with the following conditions:

·         is possible to return funds according to the accounts details, payment receiver can be only the Segregated Client;

·         is possible to transfer cash funds only between settlement accounts fixed to the Segregated Client.

Clearing Member is responsible for the reliability of the information on the Segregated Client. Submission of the Application for the Segregated Client registration is irrevocable consent of the Principal Clearing Member to transfer by the NCC to the Receiving Clearing Member of Obligations and Collateral of the Segregated Clients in cases stipulated by the Clearing Rules, and also it is the consent to disclose to the Receiving Clearing Member the information on Collateral and Obligations of the Segregated Client in accordance with the Clearing Rules.

Operating procedures for the Segregated Client’s Collateral and Obligations transfer

1.   For Obligations and Collateral Transfer from the Principal Clearing Member to the Receiving Clearing Member, the Segregated Client provides the NCC with the Application for Collateral and Obligations Transfer. The application is provided in the hardcopy form, or via the EDI of the NCC, or via the S.W.I.F.T. system. In case if the Application is provided in the hardcopy form it is required to provide the set of documents for the confirmation of powers of an entity that signed the Application.

The Application for obligations transfer the following information is required to be indicated:

·         Name / surname and two first names of the Segregated Client;

·         Full name of the Principal Clearing Member;

·         Full name of the Receiving Clearing Member;

·         List of markets, where the Segregated Client is registered;

·         At least one of the grounds for transfer, listed in the Clearing Rules

The NCC checks the reliability of the grounds for Collateral and Obligations Transfer, indicated by the Segregated Client in the Application. Besides that the Clearing House is entitled to decline execution the Application for Collateral and Obligations Transfer, submitted by a Clearing Member, if there is information on the absence of the grounds indicated in the Application.

Attention: we recommend you to forward the Application for obligations transfer via the EDI of the NCC or to use the S.W.I.F.T. system for its operational processing. Any legal entity, non-residents inclusively, can be connected to the EDI system of the NCC.

If the Application can not be accepted then the NCC notifies the Segregated Client about this fact via the details provided to the NCC.

Submission of the Application for Collateral and Obligations Transfer is irrevocable consent of the Segregated Client to disclose to the Receiving Clearing Member the information on the size of Collateral and obligations of the Segregated Client in accordance with the Clearing Rules.

If the consent of the Principal Clearing Member is indicated as the ground for the transfer, then the Receiving Clearing Member must submit the Instruction for collateral and obligations of the Segregated Client transfer. This particular Instruction is provided in the form of paper document or via the EDI.

2.   The  Clearing House imposes restriction on return of cash funds from the Settlement Account, fixed to such Segregated Client, notifies the Exchange on the necessity to set the prohibition on submission of orders by a Market Participant and conclusion of trades with the indication of the Settlement Account, fixed to the Segregated Client.

3.   The Clearing House transfers to the Receiving Clearing Member via the EDI a message, which contains information per each foreign currency/precious metal:

·         On the size of obligations/claims of the Principal Clearing Member under obligations arising from trades in respect of the Settlement Account of the Segregated Client;

·         On the size of Collateral of the Principal Clearing Member recorded under the Settlement Account of the Segregated Client;

·         Information, which identifies the Segregated Client

4.   Receiving Clearing Member provides the Clearing House with the Consent to accept obligations / claims of the Principal Clearing Member via the EDI.

In this Consent the Receiving Clearing Member in addition to the name and identification data of the Segregated Client may indicate:

·         Necessity to register a Segregated Client (client may be registered not as segregated one);

·         Settlement Account and Trade Account, to which is required to transfer Collateral and Obligations.

Receiving Clearing Member can register the Segregated Client on the Exchange in advance or after the procedure for Collateral and Obligations Transfer takes place.

If the Segregated Client has obligations and Collateral in precious metals, Receiving Clearing Member must have the Agreement on impersonal metal account in effect and also provide the NCC with the Application for impersonal metal account registration for collateral recording.

5.   The NCC

·         registers Settlement Account in the name of the Receiving Clearing Member and fixes it to the Segregated Client;

·         transfers Collateral of the Segregated Client to the new Settlement Account;

·         starts recording obligations/claims of the Segregated Client as obligations/claims of the Receiving Clearing Member in respect of the Settlement Account

For the execution of the procedure for obligations and Collateral transfer the Receiving Clearing Member pays the fee in accordance with the Tariffs of the Clearing House (3 000 rubles).

6.   The NCC notifies the Principal Clearing Member and the Segregated Client on the start and end of the Procedure for Collateral and Obligations Transfer by forwarding relevant messages via the EDI.

Procedure for Collateral and Obligations Transfer is not executed in case if the Consent from a Receiving Clearing Member is not received.

Procedure for obligations and Collateral transfer can not take last more than 2 days.