| Market: | All |
| Products: | Derivatives |
| Date: | 22 May 2007 |
Project: Mutual Clearing Fund for Powernext® Futures Market
Announcement
LCH.Clearnet SA is pleased to confirm the Clearing Fund for Powernext® Futures go live.
Key Milestones
31 May 2007: Cut-off calculations
6 June 2007: First contribution call and implementation of the Terms of Business.
Reminder Principle
This mutual clearing fund will provide adequate financial resources for default management purpose at a lower cost for all the Powernext® Futures membership community. The Clearing fund is risk driven and aims to be resilient.
The collective provision needs to be sufficient to cover the potential failure of LCH.Clearnet SA's largest Powernext® Futures clearing member, defined as the member whose risk exposure after deduction of its individual initial margin and margin calls is the highest.
The size of each member's contribution is assessed by LCH.Clearnet SA every month and is based on the relative weight of each member's specific uncovered risk compared to the total sum of the uncovered risk of all members. Each Powernext® Futures member makes therefore a contribution to the mutual clearing fund in proportion to its share of total risk on a previous period of 60 days.
The related documents are available on LCH.Clearnet’s website:
http://www.lchclearnet.com/customer_notices/flash_infos/derivatives/ 2007-04-26.asp
The launch of the clearing fund is accompanied by the implementation of the Terms of Business which will supersede the Master Agreement and Service Level Description currently governing the relationship between LCH.Clearnet SA and each member on Powernext® Futures. For the avoidance of doubt, the enforceable version of the Terms of Business will be the version available on LCH.Clearnet‘s website :
You will also find here attached the project presentation document used during the last General Members Meeting held on May 10th, 2007.
For further information, please contact, your LCH.Clearnet SA Product Implementation & Powernext® Customer Relationship manager:
Michel Bokobza: +33 1 70 37 65 55, michel.bokobza@lchclearnet.com
Customer and Market Management LCH.Clearnet SA