Managing Counterparty Credit Risks

Interposed between market participants, NG Clearing provides security for all obligations and takes on the stressors, providing assurance to all parties

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CREATING THE ROADMAP FOR NIGERIA’S DERIVATIVES MARKET

Collateral Management

NG Clearing manages the exposures that it has with each clearing member as a consequence of the clearing contracts that have been accepted by calculating the potential losses it faces if one or more clearing members were to fail to perform their obligations under those clearing contracts when they fall due. NG Clearing covers these exposures by requiring their clearing members to provide collateral.

NG Clearing will calculate a margin requirement in respect of each clearing member, and the clearing member must satisfy the margin requirement through the posting of collateral.

We collect sufficient financial resources to cover credit exposures to each clearing member, fully, with a high degree of confidence; and maintain sufficient additional financial resources to cover a wide range of potential stress scenarios, including the default of the two participants with the largest aggregate credit exposure to NG Clearing in extreme but plausible conditions

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