Clearing activities - KASE Clearing Centre

Clearing: reliability and efficiency on financial markets

The KASE Clearing Center provides clearing services for the following financial instruments

Stock market:

shares and ADR/GDR
KASE Global
investment fund securities
government securities
corporate bonds
MFO securities

Money market

repo
swaps

FX market

foreign currencies (exchange market and OTC)

Derivatives market

stock futures
currency futures

Central counterparty: reducing the default risk

The KASE Clearing Center, as the Central Counterparty (CCP), is the guarantor of stability and security on the serviced markets. It becomes the link between a buyer and a seller, taking on the risks of each transaction.

Operating principles:

Substitution of parties: when two participants conclude a transaction, the KASE Clearing Center stands between them. It becomes the seller for each buyer and the buyer for each seller. This allows to convert bilateral risks to secure obligations to a single, strictly regulated organization.
Risk protection: the main task of the CCP is guaranteeing fulfillment of obligations. If one of the participants is unable to complete a transaction, the CCP will use its collateral to settle the situation and protect the others. This is achieved through a multi-level risk management system.
Netting: the CCP optimizes the settlements by conducting multilateral netting. Instead of many individual transactions, only net obligations are fulfilled. This reduces risk, operation costs, the need for liquidity and makes the market more efficient. The KASE Clearing Center conducts multilateral netting by combining settlements into one pool in the following markets:

- Stock market (buy/sell transactions on the stock market and repo operations)
- FX market (spot transactions on the stock market and swap operations)
- Derivatives market (all transactions executed on the derivatives market)

Integrated approach: advantages of the CCP for market participants

Guarantee of transaction execution

The CCP acts as a party to each transaction (as buyer for the seller and as seller for the buyer), ensuring its execution

Settlement of unfulfilled obligations

The CCP concludes transactions to transfer obligations with unscrupulous participants, minimizing the risks for others

Reducing costs and increasing liquidity

Reducing the costs and increasing the liquidity for participants due to presence of the single counterparty, the CCP, and netting of mutual claims and obligations under transactions

Checking the availability of collateral

Checking the availability of collateral (single limit) at the stage of order entry into the trading system

Settlement of obligations using collateral

Settlement of obligations using collateral in cash and securities

Acceptability of collateral

Highly reliable and highly liquid securities are accepted as collateral

Our central counterparty services not just reduce the risk, they create the foundation for stable and effective market functioning.

We provide an unparalleled level of reliability and effectiveness, allowing our clients to focus on trading strategies rather than operational risks.