Risk Management

The core functionality of SIX x-clear Ltd as a central counterparty (CCP) is to eliminate bilateral counterparty risk by identifying, quantifying and monitoring risks in the most effective and transparent way. SIX x-clear deploys a number of different mechanisms to minimize counterparty risk.

The following mechanisms are in place to guarantee a consistent risk management framework for Members as well as markets:

  • Duly monitored membership criteria
  • VaR margin model for equities and fixed income offered across all platforms by using cross-margin netting and the highly sophisticated VaR MIDAS margin model offered by the Norwegian Branch
  • Dedicated default fund for cash products (equities and fixed income) and one for derivatives and securities lending and borrowing transactions
  • Segregated link margin model in interoperable markets to cover inter-CCP risk
  • Risk-adjusted collateral criteria as part of the lending norms
  • Standardized and modular legal framework for Clearing Members