The Singapore Exchange Regulation (SGX RegCo) is consulting the market on proposing changes to the Central Depository’s (CDP) margining framework and the CDP Clearing Fund.
The CDP collects margins and Clearing Fund contributions to mitigate the impact on the rest of the financial system, should a Clearing Member default on its payments.
In its Nov 3 statement, the SGX RegCo has proposed to offer differentiated margin changes for groups of securities with different risk profiles. This is so that margins will commensurate more closely with the level of risk brought to the system. Under the proposed margin changes, the SGX RegCo is also looking to introduce margin offsets for greater efficiency. Finally, the market regulator is proposing to enhance anti-procyclicality measures to better temper sudden margin increases.
