Collateral Management Services

1. Increasing Trading Limit:

Trading Clearing Members and General Clearing members need to maintain adequate collateral balance for both their Daily Operation Limit and Margin requirement for Trading Clearing Members trades or General Clearing Members’ trades of their Trading members. To increase the trading limit, the Clearing Member must deposit additional Collateral with Dubai Clear.

2. Decreasing Trading Limit:

Trading Clearing Members and General Clearing members can withdraw excess collateral subject to outstanding collateral position and minimum Collateral requirements. Any collateral release will be processed by Dubai Clear only if outstanding Collateral position after release is sufficient to meet the Clearing Member’s outstanding margin and Settlement Default Fund requirements and also minimum Collateral requirements based on the membership category.

3. Reduction of Guarantee Value:

Trading Clearing Members, General Clearing members and Settlement Agents can reduce the Guarantee value subject to balance Collateral positions are sufficient to meeting the Dubai Clear minimum collateral requirements and outstanding margin and Settlement Guarantee requirements. If a member wishes to reduce its Guarantee value, the member must request the issuer of their Guarantee to submit an official letter to Dubai Clear to decrease the value of their Guarantee.

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1. Increasing Trading Limit:

Clearing Member must deposit additional Collateral in the following manner:

a) Submit a new Guarantee to Dubai Clear issued by UAE central bank approved financial institution, this can be submitted by the member or by the financial institution.

b) Deposit an amount of collateral value into Deposits Account to increase the limit with the settlement banks:

• Emirates National Bank of Dubai AC: 0592063720904, IBAN AE810260000592063720904
• Standard Chartered Bank AC: 01 4224175 03, IBAN AE14 04400000 0142 2417 503

c) Freeze Securities owned by Clearing Member. The Member authorized Dubai Clear to increase the Guarantee after deducting the haircut applicable on the Freezing securities' value for the member only, and hereby fully authorize Dubai Clear to liquidate the frozen securities in case of any default in paying the settlement amount on (T+2) by giving Dubai Clear full right to act on the Frozen securities.

2. Decreasing Trading Limit:

Submit the Collateral Management Service Form in the eServices System, the following needs to be taken into consideration when submitting the reduction request;

• There is no intraday processing for release of collateral.
• All release request received during the day before end of Dubai Clear working hours 4:00 pm will be processed after close of market for value next settlement day. Any request received after Dubai Clear working hours will be considered as request received on the following settlement day.
• Requests received on the preceding settlement day after 4:00 pm will be processed before market hours on best effort basis for same day value else will follow the cycle mentioned in Point c above.
• In special cases like MSCI or FTSE rebalancing days wherein there is a significant margins drop on (T+2) after settlement is completed around 11.00 am, collateral release request will be processed intraday immediately after settlement is completed on T+2 for same day value.
• In this case the member is required to send the release request on T+1 itself to ensure timely release on T+2 after settlement
3. Reduction of Bank Guarantee Value:
• The Guarantee Issuer send an official letter to Dubai Clear requesting no objection to apply the reduction.
• Dubai Clear will check if the member has any outstanding obligations, if not then the “no objection” confirmation will be issued to the issuer.
• Issuer will send the original amended Guarantee Letter to Dubai Clear.
• Dubai Clear will apply the required change on system level.
  
  Action taken by Dubai Clear after the request submission:
  • Dubai Clear will receive and review the request.
  • In case requirements where fulfilled, Dubai Clear will apply the required adjustments on systems level based on request type.
  • Dubai Clear will confirm to the member and approve or reject the request based on its status.

1. Increasing Trading Limit:

To increase the trading limit by;

• New guarantee, the issued guarantee should be sent via an official letter to Dubai Clear and should be in the format published by Dubai Clear.
• Deposit an amount of collateral value into Deposits Account with the settlement banks, the Collateral Management Service Form in the eServices System should be filled and attached with copy of the credit advice.
• Freeze Securities owned by Clearing Member, the Collateral Management Services Form through eServices System should be filled
2. Decreasing Trading Limit:

Collateral Management Service Form in the eServices System

3. Reduction of Bank Guarantee Value:

Collateral Management Service Form in the eServices System

1. Increasing Trading Limit:

The new original guarantee should be submitted to Dubai Clear office in Trade Center. Other requests (deposits of funds / freeze of securities) can be submitted through eServices by filling the Collateral Management Services Form.

2. Decreasing Trading Limit:

The request can be submitted through eServices by filling the Collateral Management Services Form.

3. Reduction of Bank Guarantee Value:

The request can be submitted through eServices by filling the Collateral Management Services Form attaching the official letter from the Guarantee Issuer. Dubai Clear will take the action only after receiving the original Guarantee.