What Is the Canadian Deriva𒈔tives Clearing Corporation (ꦦCDCC)?

The Canadian Derivatives Clearing Corporation (CDCC) is the central clearing counterparty for exchange-traded derivative products, such as options and futures, in Canada. The CDCC also acts as the clearinghouse for a growing range of 澳洲幸运5开奖号码历史查询:over-the-counter (OTC) financial instruments including fixed income and foreign exchange securities. CDCC is a wholly owned subsidiary of the Montreal Exchange and operates as a subsidiary of Bourse de Montreal, Inc.

Understanding the Canadian Derivatives Clearing Corporatio𝕴n (CDCC)

The Canadian Derivatives Clearing Corporation (CDCC), initially called the Trans Canada Options (TCO), was established in 1977 through the merger of the Montreal and Toronto options clearinghouses. TCO changed its name to Canadian Derivatives Clearing Corporation in 1996. 

By 2000, the CDCC became entirely owned by the Montreal ꦕExchange. Eight years later, the merger of the Montreal Exchange and the TSX Group changed the ownership of the CDCC to the TSX Group. Under this leadership, the Canadian Derivatives Clearing Corporation (CDCC) would expand its operations to include the clearing of fixed income transactions in 2012. 

The CDCC states that it is the only integrated central clearing counterparty in North America that clears and settles not only futures and options but contracts for 澳洲幸运5开奖号码历史查询:options on futures as well. The company has over🅺 35 years of being Canada's central clearing counterparty and guarantor of derivative products that are exchange-rated. Furthermore, the CDCC includes more than 30 clearing members.

The members include large institutions, such as the Bank of Montreal, BNP Paribas, Citibank Canada, Goldman Sachs Canada, J.P. Morgan Securities Canada, and Scotia Capital. Membership requires an extensive review process that includes a review of the 澳洲幸运5开奖号码历史查询:financial health of the applicants.

There are two dominant clearinghouses in the United States, the 澳洲幸运5开奖号码历史查询:New York Stock Exchange (NYSE) and the Nasdaq. In addition to the CDCC, Canada also has the CDS Clearing and Depository Services Inc (CDS Clearing), The CLS Bank, and the LCH Clearnet's SwapClear service.

Activities of the Canadian 🔯Derivatives Clearing Corporation (CDCC)

A clearinghouse acts to guarantee transactions💎 that take place between buyers and sellers. The most frequent association of a clearinghouse is with the futures market. All trades must transfer through a clearinghouse at the end of every trading session. Members are required to deposit enough funds to cover the member’s balance.

The purpose of a clearinghouse is to stabilize the market and expedite efficiencies. This is especially necessary when dealing with 𓆏the futures market ✨as the transactions are complex and require a stable intermediary.

The CDCC provides this by covering equities, fixed income, and currency 澳洲幸运5开奖号码历史查询:derivatives traded on the Montreal exchange, providing its members with clearing services on a large scale product suite. It also supports OTC options on equities and 澳洲幸运5开奖号码历史查询:exchange-traded funds (ETFs). In addition, it intends to offer clearing services for 澳洲幸运5开奖号码历史查询:repurchase agreements (repos).

CDCC also offers a service known as "Converge," which provides high-level financial risk management for complex and customized financial securities. These are for transactions that do not occur on an exchange. This service has been offered since 2006 for equity and fixed income products.

Margining on the Canadian Derivatives Clearing Corpor🌸ation (CDCC)

CDCC utilizes two risk-based margining methodologies. Its first system was established in 1990, the Theoretical Intermarket Margin System (TIMS). This system was developed by the 澳洲幸运5开奖号码历史查询:Options Clearing Corporation (OCC).

In 1997, CDCC decided to upgrade its margining system and began using the Standard Portfolio Analysis of Risk (SPAN), which was created by the 澳洲幸运5开奖号码历史查询:Chicago Mercantile Exchange (CME). SPAN is commonly used and approved worldwide and allows for a 澳洲幸运5开奖号码历史查询:value at risk (VaR) assessment on an overall portfolio basis. SPAN was developed in 1988.