On the surface, the role of clearing members is directly reflected in providing fund settlement and clearing services for trading members, but the reality is far more than that. The risk monitoring of trading members and exchanges is the essence throughout the whole trading process, and clearing members really play their role. Therefore, clearing members should carefully analyze the risks they face in order to better assume their due role. Generally speaking, clearing members face the following risks.
First, the risk from trading members.
A proprietary trading member fails to manage the investment of its own funds, resulting in insufficient margin in its proprietary account, or a brokerage trading member fails to manage the investors' positions, resulting in insufficient margin and unable to cover the positions in time, or even if the trading member is forced to close his position, the settlement risk incurred by the trading member must be borne by the clearing member to the Exchange. This kind of risk is the most common risk faced by clearing members.
The second is the risk from other clearing members.
The settlement guarantee system is implemented in stock index futures, that is, all settlement members must deposit the guarantee money with the exchange to deal with the default of all settlement members, which actually requires settlement members to establish a common guarantee system and form mutual insurance. Under this system, when individual clearing members breach the contract and cannot make up the margin with their own funds within the specified time, the Exchange will start procedures to require other clearing members who have not breached the contract to make up the margin gap with their own funds. The system is to maintain the safe operation of the whole futures market, and its fairness and rationality are beyond doubt. However, the screening criteria and risk control ability of clearing members should be further strictly required to improve the overall risk resistance ability of clearing members, because after all, no clearing member is willing to bear the risks of other clearing peers.
Third, legal risks.
Legal risk may be the biggest headache for market participants including clearing members after the introduction of stock index futures. There are hidden legal risks in many links. For example, when the stock index futures fluctuate greatly in the day, the trading members are short of funds in the day, and the settlement members need to recover the money or even close the position forcibly. If there is no necessary legal basis and detailed contract agreement in advance, the two sides may have disputes and disputes on the exercise of power by the settlement members, the delivery of notices, the time limit for recovering the money, and the standard for closing the position forcibly.
Fourth, market systemic risk.
The general reaction of the market to systemic risk is quite worried but helpless, because it is like a latent volcano, which will erupt one day, just don't know when. In extreme cases, when systemic risks occur, futures prices continue to rise and fall, and members or investors cannot close their positions. In the end, the trading members will break out or even go bankrupt in a large area, and the settlement members need to take risks for the huge losses incurred by the members with their own funds. After the emergence of systemic risks, it is imperative to maintain the ability of the market to run continuously. Therefore, from the overall situation, market participants should obey the unified arrangements of the regulatory authorities and the exchange. However, after paying the bill, how to recover and recover the losses will be a problem that all business entities have to consider (refer to Zhang Yun Finance! )