Version date: 14 December 2017 - onwards
OTC Question 18b: Indirect clearing [Last update 14 December 2017, applicable from 3 January 2018]
Article 4(2)(b) of RTS 2017/2155
Article 4(2)(b) of RTS 2017/2155 – Segregation level for indirect clearing accounts
In the event of a clearing member default, is it permissible for a CCP to liquidate all of the collateral recorded in all the gross omnibus indirect client accounts (referred to in paragraph 2(b)) together and apply the resulting sum collectively in order to cover losses or to enable the netting of positions across different accounts?
OTC Answer 18b
No, Article 4(4)(b) of the Indirect Clearing RTS requires that a clearing member shall open and main- tain in the CCP a segregated account for the exclusive purpose of holding the assets and positions of indirect clients of each client held by th e clearing member in an account as referred to in paragraph 2(b). Therefore, a clearing member would have to open a separate account at the CCP for each client’s pool of Indirect Clients who have elected the account referred to in paragraph (2)(b).