The settlement department of the exchange is a subsidiary of the commodity futures exchange and the executive body of the exchange settlement system. Responsible for clearing the trading accounts of all member units, clearing daily transactions, collecting trading deposits (performance bonds) and additional deposits, managing and supervising delivery, and reporting trading data.
The role of futures exchange settlement
1. As a counterparty, guarantee the performance of the transaction.
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.
4. Supervise the physical delivery of futures trading.
Generally speaking, the exchange is not responsible for the whole process of actual commodity delivery, only for buyers and sellers who need spot delivery, and for the corresponding account transfer. In futures trading, all contracts must be settled by hedging or physical delivery.
Knowledge expansion: what is futures trading?
The futures exchange is the place to buy and sell futures contracts and the core of the futures market. It is a non-profit organization, but its non-profit only means that the exchange itself does not conduct trading activities, and it does not mean that it does not attach importance to interest accounting. In this sense, the exchange is also a financially independent for-profit institution, which realizes reasonable economic benefits, including membership fee income, transaction fee income, information service income and other income, on the basis of providing traders with open, fair and just trading places and effective supervision services. As the organizer of the futures market, the exchange mainly maintains the futures market through front-line supervision? Sangong? Honesty and credit. A set of institutional rules formulated by it provides a self-management mechanism for the whole futures market, which makes futures trading? Open, fair and just? The principle has been realized.