A stable, well-functioning financial market for allA stable, well-functioning financial market for allFI's comments on Nasdaq Clearing's decision today
Nasdaq Clearing AB has decided to declare a clearing member in the firm’s commodity market in default. The member is active in the electricity derivatives markets through trading on the Norwegian Stock Exchange, Nasdaq Oslo ASA. These financial instruments are centrally cleared in Nasdaq Clearing AB, a firm under Finansinspektionen’s (FI’s) supervision.
Nasdaq Clearing has managed the member's positions in accordance with its default management framework. FI is following the developments closely and is maintaining ongoing contact with Nasdaq Clearing and other affected authorities and organisations. The collateral posted by the defaulting member has not been sufficient to cover the losses. Consequently, parts of Nasdaq Clearings' capital as well as parts of the default fund contributions posted by non-defaulting commodity clearing members will be utilised to cover the losses. The decision to declare the member in default has no impact on the clearing of equity and fixed income derivatives.
FI's supervision of central counterparties (CCP)
A CCP's primary assignment is to take over counterparty risks by acting as a counterparty to both the seller and the buyer in a financial transaction. A CCP is therefore an important part of the financial system. Given the concentration of counterparty risk that arises at a central counterparty, FI and other international supervisory authorities consider central counterparties to be systemically important. Stricter requirements for this type of operations have therefore been introduced in recent years, primarily through the EMIR regulation.
FI conducts ongoing supervision of Nasdaq Clearing to ensure, for example, that the firm meets the requirements placed on a CCP by the EMIR regulation.
