The settlement department of the exchange plays the role of a third party for all futures contract traders, that is, the settlement department is a buyer for every seller member and a seller for every buyer member. As far as the settlement department of the exchange itself is concerned, the daily profit and loss are balanced. In this way, traders only have business relations with the settlement department of the exchange, and the buyers and sellers of futures trading are not responsible for each other, but only responsible for the settlement department of the exchange. Because futures buyers and sellers can buy and sell contracts at will regardless of whether the counterparty performs the contract or not, the clearing institution of the exchange, as the third party of the counterparty, undertakes all the responsibilities of ensuring the timely performance of each transaction, thus simplifying the settlement procedures, promoting the transaction and improving the transaction efficiency.
2. Calculate the profit and loss of futures trading.
After the futures trader completes the transaction, he will summarize all the transaction information to the settlement department of the exchange. The settlement department makes settlement on the basis of verification, calculates the profit and loss of each member, and reflects it to the member's margin account. The daily debt-free settlement system is adopted for transaction settlement, and the settlement of the transaction results on the same day is completed.
3. Manage member funds and control market risks.
The clearing institution of the exchange manages the basic margin and trading margin of all members to ensure that all futures trading can be carried out and ensure the stability and financial integrity of the futures market. The settlement institutions of various exchanges shall implement strict settlement margin and daily debt-free settlement system. The Exchange has established the minimum deposit standard, and member companies or their customers must pay the minimum deposit to the clearing institution of the Exchange when settling the contract. At the same time, in order to ensure the interests of member brokerage companies, the margin charged by brokerage companies to customers is generally higher than that charged by exchanges to members. In this way, a series of strict systems and procedures have been established to ensure the normal operation of the futures market and prevent huge losses and liquidation confusion. After several big storms in China futures market, all the exchanges have realized that strengthening the settlement system and management monitoring are the key to controlling futures trading risks.