Counterparty Risk in the Over-The-Counter Derivatives Market
Managing counterparty risk 7 th Annual International Conference, “Russian Derivatives Market”...
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![Page 1: Managing counterparty risk 7 th Annual International Conference, “Russian Derivatives Market” Moscow, 11 September 2012.](https://reader036.fdocuments.net/reader036/viewer/2022081603/56649f2c5503460f94c47d5c/html5/thumbnails/1.jpg)
Managing counterparty risk
7th Annual International Conference, “Russian Derivatives Market”Moscow, 11 September 2012
![Page 2: Managing counterparty risk 7 th Annual International Conference, “Russian Derivatives Market” Moscow, 11 September 2012.](https://reader036.fdocuments.net/reader036/viewer/2022081603/56649f2c5503460f94c47d5c/html5/thumbnails/2.jpg)
Managing counterparty risk Key features
ParticipantsAdmission criteria
End-to-end STP & reporting
Continuous Collateral optimisation & re-use
Automatic allocation & substitutions
Local securitiesComprehensive
Collateral reporting
Integration with core settlement & custody
ManagingC/P Risk
Local currency
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![Page 3: Managing counterparty risk 7 th Annual International Conference, “Russian Derivatives Market” Moscow, 11 September 2012.](https://reader036.fdocuments.net/reader036/viewer/2022081603/56649f2c5503460f94c47d5c/html5/thumbnails/3.jpg)
Russian Derivative MarketState of development
ParticipantsAdmission criteria
Local securitiesManagingC/P Risk
Local currency End-to-end STP
& reporting
Automatic allocation & substitutions
ComprehensiveCollateral reporting
Integration with core settlement & custody
Continuous Collateral optimisation & re-use
3
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Post-trade made easy in RussiaKey features – DRAFT – Pending Local authorisation
Full service offer:
• Direct link in CSD (market proximity)• Effective trading account
structure for Euroclear Bank clients ► allowing OTC and stock exchange
activity • Range of services including:
► Internal settlement, Lending & Borrowing, Triparty from omnibus account
• DVP in RUB on the local market • Enhanced interoperability
All Fixed Income instruments?
• Eligible for trading on Moscow Exchange
• Eligible for holding in the local CSD
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• Tax and asset servicing• Standardised, international
processes• Risk-controlled environment• Easy access to sell-side
Buy - Side (Global
Custodian)
Sell - Side(Investment
Bank)
Servicing the Russian market
• Liquid and robust settlement• Standardised, international
processes• Risk-controlled environment• Dynamic lending and collateral
management
• Inbound and outbound link• Efficient operability with
seamless access to Stock exchange
• DVP in RUB against local counterparties
• Same day funding (cash and securities)
Russian CSD
• Robust asset protection• Asset servicing• Financing capabilities• Lending and borrowing
Post-trade made easy in Russia
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OTC derivativesParticipant admission criteria
Clearing Member CCP
Client (Buy-Side)
Custodian
Triparty CollateralManager
Collateraltransformati
on
SWAP of non-eligible collateral against CCP
eligible collateral
It is more complex then it looks
Triparty CollateralManager
Buy-side to post initial margins 6
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