Oslo Clearing ASA Self Assessment ESCB-CESR Recommendation

The current applicable rate is 12 pct.
Collateral pledged for the Clearing Fund is held separate from collateral held for
Margin requirements.
The equities and derivatives segments both rely on the own capital of Oslo Clearing,
which they will share in common, when all preceding lines of defence have been
exhausted. The regulatory capital of Oslo Clearing is currently NOK 150 mill.
A more detailed description of the lines of defence and the prioritised order in the use
of resources is provided below.
Is there a high degree of assurance that the CCP will be able to draw on those
resources for the anticipated value in the event of a participant's default?
The majority of available resources in the form of margin collateral and the Clearing
Fund are pledged to Oslo Clearing. The pledge under Norwegian and Luxembourg law
constitute a high degree of assurance that Oslo Clearing will be able to draw on these
resources. Pledge under English law requires a court order to be able to draw on
these resources, thus for clearing members relying on credit institutions based in the
United Kingdom, cash collateral is deposited directly to Oslo Clearing (transfer of title)
How is use of the resources by the CCP ordered?
As described above, Oslo Clearing offers two separate clearing services and default
procedures, hence use of resources or other mechanisms is applied separately for
each service, until the own funds of Oslo Clearing, less a contribution of NOK 30 mill.
for equity clearing, are the only remaining resources to absorb any uncovered loss.
Resources will be used according to a given order, however the order and hence
default procedures will differ between the equity and the derivatives clearing. Figure
1 below, provides an illustration of the waterfall of resources for the two clearing
segments.
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