On May 9, 2025, UAE DC issued Circular DClear 2025/4 re updating its margin policy.
Clearing members may approach UAE DC for exception from upfront collection of Initial and variation margins on specific event-driven days provided to members.
The exception is only available for clearing members dealing with custodian clients.
Updates lead to reduce capital costs to members resulting in profitability improvement.
Amendments made to the margin policy will come into effect on May 15, 2025.
On Apr. 17, UAE DC issued circular amending its margin policy.
UAE DC issued circular DClear/2023/2 amending its margin policy due to the risk management framework enhancement to improve margin efficiency for its members.
Amendments
The Risk Management Systems had been upgraded in order to support real-time calculation of initial and variation margins, offer netting benefits to client’s positions.
Changes to levies' type of margins, utilization calculation, conditions for exceptions.
Variation Margin (VMs) calculated intraday at end of each calendar day at client trading account level for outstanding position for each symbol based on last trade price/daily.
Market mark is on intraday crystalized losses, mark to Market (MTM) on all outstanding net buy positions, or MTM on all the non-pre-validated outstanding net sell positions.
No change for the existing calculation methodology of variation margin for DVP Trades.
Changes will lead to margin cost deduction for members improving capital efficiency.
Members may refer to examples in the annexure to understand new methodologies.
The changes will come into effect on Apr. 15, 2024.
Implementation date of two changes re PCCP shall be in effect from Apr. 22, 2024.
Apr. 30, 2024 Updates
On Apr. 30, 2024, UAE DC updated margin policy requiring clearing members to post margins blocked against Collateral deposited by Clearing Member (CM) with the CCP.
Initial Margin, Variation Margin and Fails Margin are type of margins levied by the CCP.
CCP reserves right to levy additional margins based on market conditions, exposure.
Announced initial Margins (IMs) will be calculated on a near real-time intraday basis and at the end of each calendar day based on each client position for each symbol.
Variation Margins (VMs) will be calculated intraday and at end of each calendar day using Intraday Crystalized losses and Mark to Market -for all outstanding positions.
Fails Margins (FMs) will be calculated intraday and at the end of each day at each client trading account level for each symbol on all fails positions n the same manner as IM.
Stipulated that all margins calculated above will be blocked against the Net Collateral (Collateral Value minus value of Settlement Default Fund contribution) of CM with CCP.
May 9, 2025 Amendments
On May 9, 2025, UAE DC issued Circular DClear 2025/4 re updating its margin policy.
Clearing members may approach UAE DC for exception from upfront collection of Initial and variation margins on specific event-driven days provided to members.
The exception is only available for clearing members dealing with custodian clients.
Updates lead to reduce capital costs to members resulting in profitability improvement.
Amendments made to the margin policy will come into effect on May 15, 2025.
