The trade matching system will transmit the most updated transaction data to the Clearing Department which will in turn transmit such data to clearing members for their back office operations.
The system will activate the daily mark-to-market calculations. A settlement price will be determined for each contract at the end of the market hours, which will be transmitted from the trade matching system to the clearing system and serve as a basis for margin calculations. After the daily mark-to-market calculation, the clearing system will disseminate the relevant position data to the clearing members for their back office operations. After the trade confirmation, clients with insufficient margins have to post additional margin in their accounts to meet the margin requirements.
The settlement banks will receive from the Clearing Department a list of the clients who are required to post additional margins in their margin accounts and will in turn transmit the results of the margin transfer back to the Clearing Department.
Margining is a disciplinary tool that feeds down from the Clearing Department to the clearing members, and from the clearing members to their clients. Clearing members must assume responsibility for the margin requirements set for both their client account and their proprietary account.