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How Does the Clearinghouse Manage Settlement Risk?

The clearinghouse manages settlement risk through several layers of defense. These include demanding initial and maintenance margin, daily mark-to-market settlements, having strict membership requirements, and maintaining a substantial default fund.

This multi-layered approach ensures that the risk of a failure to settle is minimized and that funds are available to cover any losses from a default.

How Does MTM Reduce the Risk of Default for the Clearinghouse?
What Is the Difference between a Variation Margin and an Initial Margin?
What Is ‘Default Risk’ and How Does the Clearing House Mitigate It?
How Do Exchanges Use MTM Data to Calculate Margin Requirements?