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TMX Post-Trade: Developments at CDS & CDCC
September 8, 20172017 IIROC Financial and Operations Advisory Section ConferenceS
Brian Z. GelfandChief Commercial Officer, TMX | CDS CDCC
1. CDS and CDCC Modernization: Projects Atlas and Mercury
2. CDCC Buyside Repo
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TMX Post-Trade: Developments at CDS and CDCC
CDS and CDCC Modernization: Projects Atlas and Mercury
The CDS & CDCC Modernization Program is made up of two key projects
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1. Produces a modern, refreshed technology platform that will allow CDS/CDCC to keep pace with the evolving needs of the industry
2. Creates opportunities to participate in future financial market infrastructure initiative.
3. Delivers a simpler, more flexible technology platform - changes will be easier, faster and cheaper to implement
4. Supports operational efficiencies through a single point of contact
5. Delivers an integrated solution for clearing, depository and risk management
Project ATLASCore Clearing & Settlement
Start Date: May 2017
Project MERCURYCorp Actions & Entitlements
Start Date: September 2017
ATLAS and MERCURY will leverage TCS BaNCS Market Infrastructure Platform
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ATLAS
TCS BαNCS Solutions
MERCURY will be aligned to the ATLAS CDS Modernization Delivery dates
6 * & ** Indicative timelines to be confirmed after each Solution Analysis is complete
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ATLAS & MERCURY Participant Engagement
CDCC Direct Clearing for Buyside Firms
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Direct Clearing for Canadian Buyside Firms
• Proposal will enable certain Canadian buy-side firms to clear cash or repo trades directly through CDCC
• Will extend CCP clearing benefits of capital, margin and collateral efficiencies to a new membership category – Limited Clearing Members
• Developed in consultation with clearing members, public pension funds, securities regulators, the Bank of Canada and IIAC
• Will enhance the efficiency, resiliency and capacity of Canadian capital markets
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Core Principles for LCMs
1. LCMs not subject to Clearing Fund contributiona. Margin subject to a multiplier
2. LCMs have no obligation resulting from the default of another Clearing Member
3. LCMs are subject to recovery powers in a modified fashion
a. CDCC shall not reduce its obligation toward an LCM as part of Recovery Process, with one exception
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Distinct Eligibility and Membership Standards
• Eligible institutions:o Federal or provincial crown, or crown-related
entitieso Provincially or federally regulated pension funds
that manage public sector pension plans.
• Credit Standards
• Ongoing Monitoring of creditworthiness and financial resilience
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Distinct Margin Framework
• Adjusted Base Initial Margino LCM initial margin subject to a multiplier because
LCMs will not contribute to the Clearing Fund
• Additional Margin for uncovered residual risko Ensures that CDCC will meet Cover 1 requirements
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Distinct Operational Timelines and Processes
• LCMs generally rely on external service providers for most back-office functionso They will have distinct timelines to satisfy their
obligations regarding Settlement, Intra-Day margin Calls and Pledging of collateral
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Phased Implementation
Two Phases:First group: February 2018Second group: July 2018
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For more detailed information
Please consult our website : WWW.CDCC.CA
• CDCC Notice to members 2017 – 126, published August 30th, 2017
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