Prevention of Financial Market’s Systemic Risk
If and when a financial company goes bankrupt, the CCP makes the settlement for the company, preventing systemic risk of spreading to other financial companies.
Reducing Settlement Risk by Netting and Mitigating Counterparty Risks
The clearing organization becomes a buyer to sellers and a seller to buyers, assuming the responsibility of settlement.
Reducing Burden of Participants’ Settlement Works

As the settlement is centralized to and netted by the CCP, related operational burden is reduced.


< Centralization of Settlement to CCP and Netting >
Centralization of Settlement to CCP and Netting
Clearing mechanism contributes to the development of the OTC derivatives market
Promoting transactions and facilitating the standardization of the OTC market by mitigating counterparty risk.
In addition, the CCP service provides some merits regarding the equity capital requirements on the counterparty risk by the Basel agreements
Risk weight of 2% is applied to transactions with a qualifying CCP.
Content Manager
  • OTC CCP Rules 051-662-2764