CC&G is a multi-asset clearing house that provides proven risk management capabilities on 14 markets, across a range of trading venues including Borsa Italiana, MTS, BrokerTec and Hi-mtf.
Asset classes cleared include equities, EFTs, closed-end funds, financial and commodity derivatives, bonds and repos.
CC&G aims to ensure the efficient and safe functioning of the markets served and feels committed to contributing to the protection of its members and their clients across multiple jurisdictions in Europe, promoting and offering its services in an equitable, transparent and non-discriminatory manner.
In its role, CC&G assures the implementation of a robust risk management framework, a set of rules and procedures to ensure full compliance with the applicable regulatory environment, and an STP Clearing System providing safe and efficient clearing processing.
Among its main objectives, CC&G, through the mitigation of counterparty risk and the provision of sound risk management, ensures the correct and smooth functioning of the regulated markets, undertaking consultation processes in circumstances of regulatory amendments and in case of implementation of new regulations and services.
CC&G was incorporated in Italy in 1992, under the Supervision of Bank of Italy, and it is authorized to offer services and activities in accordance with European Market Infrastructure Regulation (EMIR).
Robust Risk management Scheme
In a fast changing and intense competitive and regulatory environment, CC&G is at the fore front in offering a robust and efficient risk management system and to protect its Clients with asset segregation and state of the art margining methodology.
In particular CC&G’s financial safeguarding system is based on the following 3 levels of protection:
1. Membership requirements
Clearing Members must meet minimum Supervisory Capital requirements in accordance with their role (ICM or GCM) and the segment they want to . Each Member must have an organisational structure and IT systems that guarantee the ordered, continuous, and efficient management of the activities and relations foreseen by CC&G Rules.
2. Margin system
Members must deposit sufficient guarantees to cover the theoretical costs of liquidation, which CC&G would incur in the event of a Member’s Default, in order to close the open positions in the worst reasonably possible market scenario. All Clearing Members are therefore required to pay margins on all open positions.
Margins are calculated using the MARS methodology (Margining System) for the IDEM and Share BIt markets, and MVP (Method for Portfolio Valuation) for the MTS and BrokerTec markets. These are efficient, reliable and accurate systems for calculating margins. MARS is capable of recognizing the overall risk in a portfolio and allows for the offsetting of risk between closely correlated products, as well as allowing for cross-margining between derivatives and equity cash products in the portfolio.
CC&G has also introduced additional protection, which functions alongside the margins system, consisting of the Default Fund to cover that portion of the risk, generated by extreme variations in market conditions, that is not guaranteed by the margin system.
3. Default procedure
The procedure envisages the allocation of the losses and costs sustained by CC&G following the default of a Clearing Member according the below hierarchy (i.e. "default waterfall") set out in CC&G’s Rulebook Article B.6.2.3):