Golden Fortune Derivatives Exchange, with Central Counterparty Licence by SECC (centralcounterparty, hereinafter referred to as CCP) means that in the course of securities delivery, the original "buyer's seller" and "seller's buyer" are involved in the transaction settlement as the legal counterparty of the original market participant Party, and the entity that guarantees the execution of the transaction.
Its core is contract turnover and guarantee settlement. Due to financial derivatives, adopting margin delivery method, financial leverage is bigger, credit risk is higher. In order to reduce the credit risk of the counterparty in the delivery of financial derivatives, the central counterparty liquidation mechanism has been established internationally.
Refers to the original contract between the buyer and the CCP and the seller and the buyer CCP the contract between the two contracts replaced, the original contract was cancelled.
Means that the CCP must guarantee the normal conduct of the contract under any circumstances, even if the sale is in progress. If one of the parties fails to perform, the CCP must first perform the settlement obligation to the compliance party, and then hold thedefaulting party liable for breach of contract.
Under the CCP mechanism, the counterparty of all derivatives contracts is replaced by the service organization that provides the CCP service, and the CCP service organization guarantees the smooth execution of the contracts.
CCP delivery services can be provided by selecting CCP service providers with improved risk management systems.