Clearing and Settlement FAQs

Which are the Clearing Bank?

The Clearing House has currently empanelled the following bank, designated as Clearing Bank for the purpose of settlement of funds i.e. for pay-in / pay-out and margin obligations of the Clearing Members.

Sr. No. Name of the Bank Address Contact Person Contact Number
1 Barclays Bank Mauritius Limited Corporate Division,
Barclays House,
68-68A Cybercity
Ebene
Mauritius
Mr. Shaheel Deepak Tulsidas – Relationship Manager Tel: (+230) 4041628
Email:
shaheel.tulsidas@barclays.com

How many bank accounts does a Clearing Member need to open with the Clearing Bank?

The Clearing Members shall open and maintain the following US Dollar and Mauritian Rupee (only if the Clearing Member is clearing trades for Mauritian Rupee contracts) denominated accounts with one of the designated Clearing Banks for the purpose of settlement through the Clearing House:

  • Clearing and Settlement Account
  • Clearing Member’s own proprietary account,
  • Client Account
  • Any other banking accounts as may be specified by the Clearing House from time to time.

What is the settlement schedule of the Clearing House?

The daily mark to market profit / loss settlements and the final settlement of obligations in Commodity / Currency / Equity Market Segments shall be affected on T+1 basis (where T = trade day).

The Clearing Members are required to have clear balance of funds in their settlement account towards their pay-in obligation by 8:30 hours (Mauritian Time GMT + 4) on the settlement day.

The pay-out of funds shall be effected to the receiving Members settlement accounts on or before the scheduled payout time i.e. 13:00 hours (Mauritian Time GMT + 4).

What will happen in case of non- fulfillment of pay-in obligation on the settlement day?

A Clearing Member’s exposure will be reduced by the amount of pay-in shortfall. However, if the Initial Margin of that Clearing Member including the minimum Initial Margin brought in on behalf of the affiliated Trading Members fall below the minimum required Initial Margin (i.e. for all segments) then the Exchange and / or its designated Clearing House may segregate this shortage with respect to open positions of the Clearing Member and may disallow and / or suspend the Clearing Member in the relevant segment(s) and / or square off the positions.

What is the procedure for Additional deposit towards margins?

A Clearing Member may bring in Additional Margins by way of cash on its behalf or on behalf of the Trading Members affiliated to them. The Additional Margin deposit can be made either in US dollar or in Mauritian rupee. Clearing Member(s) are required to send their request in multiples of US $ 1,000 (One Thousand US dollar only) or MUR 25, 000 (Twenty Five Thousand Mauritian rupee only) to the Clearing House.

The procedure for providing Additional Margin in US dollar (USD) or Mauritian rupee (MUR) will be as per one of the three methods given below.

The Clearing Members will:
  1. Instruct their Clearing Bank to transfer funds as Additional Margins to the Clearing House, Clearing and Settlement Account (as per Annexure 1 - 075/2013/CnS/GEN/4) held with the same Clearing Bank.

    Clearing Member shall fax the Instruction (as per Form 1) on (+230) 4040104 to the Clearing House.
    OR
  2. Transfer Additional Margins through internet from their Clearing and Settlement Account to the Clearing House, Clearing and Settlement Account (as per Annexure 1 - 075/2013/CnS/GEN/4) held with the same Clearing Bank. Clearing Member shall use the standard message of “Clearing Member Code and Clearing Member Name” while effecting transfer through internet.

    After confirmation with the Clearing Banks, the Clearing House will give effect of the above increase to the Clearing Member.

    Clearing Member shall fax the Instruction (as per Form 1) on (+230) 4040104 to the Clearing House.
    OR
  3. a) Clearing Member shall fax the Instruction (as per Form 1) on (+230) 4040104 to the Clearing House.
    b) The Clearing House will send the instruction to the Clearing Bank to debit the Clearing Member’s Clearing and Settlement Account. Once the funds are debited and confirmed by the bank, the effect of the above increase will be given to the Clearing Member.

What is the procedure for Release of Additional deposit towards margins?

The Clearing Member may request the Clearing House to refund the Additional Margin in multiples of US $ 1,000 (One Thousand US dollar only) or MUR 25, 000 (Twenty Five Thousand Mauritian rupee only) placed with the Clearing House towards margins (as per Form 2).

The Clearing Member will fax their request to the Clearing House in the above format i.e. latest by 15 minutes after the close of trading on the Exchange. The Clearing House will process the request at End of Day and release the additional deposit to the Clearing Member on the next working day along with the pay-in instructions. The total deposit of the Clearing Member will be reduced immediately on releasing the amount from the system.

Upon the electronic instructions sent by the Clearing House, the Clearing Bank would credit the Clearing and Settlement Account of the Clearing Member on the next working day with the amount of margins released.

How are Initial Margins levied?

Real time margin would be computed by the Clearing House using SPAN® (Standard Portfolio Analysis of Risk), which is used by most of the leading international exchanges and clearing corporations across the world.

Initial Margin shall be computed at the client level on an online real time basis, payable on all open positions of the Clearing Member(s) and shall be payable upfront by Clearing Member(s) in accordance with the margin computation methodology adopted by the Exchange and / or its designated Clearing House from time to time.

How are the Members alerted on breach of Margin limits?

The Exchange and / or its designated Clearing House will generate the alerts and transmit the same to the members on their MAT Id’s. The Clearing Members are alerted at three levels of utilisation of the Initial Margin, namely upon reaching 60%, 75% and 90% margin utilisation. The Clearing Members are placed in "Square-off Mode", upon reaching 100% utilisation of their margin limits, after which these members can initiate only such trades which would reduce their open positions.

What is Mark-to-Market Loss monitoring?

Mark to market (MTM) of positions held by each Member is carried out on a real-time basis. The loss positions of Trading Members are computed on line in order to ensure that a Trading Member does not accumulate losses beyond a particular level.

How is Mark-to-Market Loss monitored?

The Exchange and / or its designated Clearing House adopts the following procedure:

  • In respect of any trade of any previous day still remaining open, the MTM loss monitoring is calculated by comparing the difference between the previous day's settlement price and the current market price on the Exchange.
  • In case of the current day’s trades, Mark-to-Market loss would be computed by comparing the difference between the traded price at which the trade took place and the current market price on the Exchange.
  • At the end of the trading, the daily Mark-to-Market for all the open positions is computed using the current day’s settlement price on the Exchange.
  • MTM loss is calculated at the contract level for all the clients of the Trading Member. MTM profits in one contract are not adjusted for MTM losses in the other contract of the Trading Member.

What is the MTM Loss limit?

The maximum MTM Loss Limit available to the Member is currently fixed at 75% of the total deposits of the Member (i.e. total of all Interest Free Security Deposit if any, plus initial margin and additional margin).

Are members alerted on breach of MTM Loss limits?

The MTM loss limit available to the Clearing Member is currently fixed at 75% of the total deposits (i.e. Initial Margin and Additional Margin). The Exchange and / or its designated Clearing House will generate and transmit alerts to the Members at 60%, 75% and 90% of their MTM loss limits. On the MTM loss limit reaching 100%, the Clearing Member will be placed in square off mode where the Clearing Member will be allowed to only square off their existing positions and will not be allowed to create fresh positions.