Cash securities transactions concluded at the BSE are transactions with multinet settlement guaranteed by KELER CCP. As from 01 January, 2013 KELER CCP completes clearing and undertakes guarantee, KELER is in charge of account management with respect to cash securities transactions with multinet settlement concluded at the BSE.
Receipt of trading data
KELER CCP accepts transactions in line with the provisions of the Bilateral Agreement concluded by the BSE and KELER CCP. The data of transactions transmitted cannot be modified subsequently by the clearing member, KELER CCP accepts a request on the modification of data on trading from the stock exchange only.Transactions made in the debt securities section are received at net price, with the use of the accumulated interest received from the issuer KELER CCP defines the gross value of the transaction. At the time of concluding the stock exchange transaction concerned the information is to be given whether the deal is made for own account or on behalf of clients.

Segregation
In line with the provisions of the Act on the capital market own and client securities and own and client funds are to be managed in a segregated manner, therefore KELER maintains dedicated accounts for securities and financial performance. KELER CCP confirms cash transactions with multinet settlement at own, non-clearing member and consolidated client level.

Netting and confirmation of transactions
KELER CCP completes multilateral netting by clearing member, by securities with a segregated breakdown, showing the segregated sell or buy positions of the clearing member consolidated by securities and calculated for Day T.Furthermore KELER CCP completes the segregated financial netting by clearing members of transactions for Day T, showing by settlement currencies the segregated sell or buy position of the clearing member calculated for Day T. KELER informs the clearing member until 7:30 hrs on T+1 Day on the financial and securities netting in the electronic customer relationship system KID or in the form of RCMS.

Principles of multinet settlement
Multinet settlement is completed as follows for the cash transactions concluded in the Equities Section and the Debt Securities Section (except for fix and auction deals):

 

  • settlement is completed in a rolling manner (settlement takes place daily and not only at the end of the month)
  • settlement cycle is T+3 in the Equities Section and T+2 in the Debt Securities Section,
  • multilateral netting is completed (by securities and in foreign currency a net buy or a net sell position is defined for each clearing member) (where T is trade date, number of days refers to business days).

 

The Delivery versus Payment (DVP) principle is applied during settlement, accordingly financial and securities settlement are interdependent, therefore if one is not completed, the other cannot be completed either.Multinet settlement can be completed on the consolidated client and own accounts of the clearing member, on the accounts opened by the clearing member for non-clearing members and also on the accounts opened for settlement agent clearing members and non-clearing members.
Undertaking guarantee
KELER CCP settles cash securities transactions concluded at the BSE. In May 2002 KELER was one of the first institutions in Europe to launch the central counterparty (CCP) system for cash securities transactions also, since 1 January 2009 KELER CCP is acting as the central counterparty. The essence of CCP is that the central counterparty guarantees transaction performance and in case of eventual default it acts as seller toward the buyer and as buyer towards the seller (this process is called novation), thus guaranteeing the transactions it accepted, therefore the central counterparty is liable for performance as a contractual counterparty. If either party fails to meet obligations, the central counterparty is obliged to honor obligations resulting from the transactions even with the use of its capital.Cash securities transactions with multinet settlement concluded at the BSE are considered regulated market transactions with multinet settlement guaranteed by KELER CCP. In cash securities transactions with multinet settlement (with T+2, T+3 settlement) KELER CCP guarantees performance after multilateral netting.

General rules of performance
The net securities seller on Day T is obliged to make sure that at the latest until 14:00 hrs on Settlement Day (SD) the securities required for the performance of transactions on Day T are available on the segregated stock exchange securities settlement sub accounts. The multinet net buyer on Day T is obliged to make sure that at the latest until 14:00 hrs on SD the HUF and foreign currency cover required for the performance of transactions to be settled on SD is available in a segregated manner at its bank accounts.From 08:00 hrs on SD (start of real time processing) KELER takes the securities required for the SD performance as an item with distinguished priority from the stock exchange securities settlement sub accounts of the clearing member and the stock exchange settlement sub accounts opened by non-clearing members and credits the securities on the technical stock exchange settlement account of KELER CCP that is used for settlement. Simultaneously KELER makes an entry with distinguished priority to debit the funds required for SD performance to the segregated bank accounts of the clearing member or if the HUF bank account of the clearing member is kept by the NBH from the bank account kept by the NBH and credits the amount to the stock exchange technical bank account of KELER CCP.KELER continuously verifies cover for the debit entries initiated and if sufficient cover is available on the accounts of the clearing member, the entry is made immediately. If the bank account is kept by the NBH, KELER inputs a debit order in VIBER to the NBH, and the NBH verifies cover and makes the entry to the account. In this case based on the advice of the NBH KELER credits the stock exchange technical bank account.

Performance of transactions with multinet settlement
The clearing member / settlement agent receives information on obligations related to the performance of transaction with multinet settlement from the call sent by KELER CCP or from the stock exchange trade confirmation.Having regard to the DVP principle applied for settlements clearing members involved can access securities or amounts due to them if the other side of the transaction (financial or securities performance) is completed.Following collection of the financial and securities collateral KELER posts the necessary debit and credit items to the technical securities account of KELER CCP and the securities accounts of the clearing member and to the stock exchange technical bank account of KELER CCP and the bank accounts of the clearing member. Account entries, securities and financial performance are final and irrevocable.Consequently the final deadline of multinet settlement is 14:00 hrs, however if the necessary securities and/or funds are available on the technical accounts of each member prior to the final deadline, performance can take place earlier.KELER CCP advises clearing members in a separate message via KID on the multinet settlement completed.In case of multinet settlement performed after 14:00 hrs (default) KELER CCP is entitled to collect fees related to default (securities default basic fee, late fee and default surcharge) as defined in its Fee Schedule.
Provision of collateral
In the period from the trade date of cash transactions with multinet settlement (Day T) until settlement date (SD, that is either T+3 or T+2 in case of stock exchange deals) clearing members are obliged to provide collateral.KELER CCP publishes the extent of this obligation in an Announcement.
More details are available at
tozsdeielszamolas@kelerkszf.hu
 
In November 2011 the Budapest Stock Exchange launched the BSE MTF platform that allows to trade foreign securities in HUF. Settlement and performance rules at the BSE MTF are identical to the rules of the BSE Equities Section. As from 01 January, 2013 KELER CCP completes clearing and undertakes guarantee, KELER is in charge of account management with respect to cash securities transactions with multinet settlement concluded at the BSE MTF.

Receipt of trade data
KELER CCP accepts transactions in line with the provisions of the bilateral cooperation agreement concluded by the BSE and KELER CCP.
The data of transactions transmitted cannot be modified subsequently by the clearing member, KELER CCP accepts a request on the modification of data on trading from the stock exchange only.
At the time of concluding the stock exchange transaction concerned information is to be given whether the deal is made for own account or on behalf of clients.

Segregation
In line with the provisions of the Act on the capital market own securities and client securities and own funds and client funds are to be managed in a segregated manner, therefore KELER maintains dedicated accounts for securities and cash performance.
KELER CCP confirms BSE MTF transactions at own, non-clearing member and consolidated client level.

Netting and confirmation of transactions
KELER CCP completes multilateral netting by clearing member, by securities with a segregated breakdown, showing the segregated sell or buy positions of the clearing member consolidated by securities and calculated for Day T.
Furthermore KELER CCP completes the segregated financial netting by clearing members of transactions for Day T, showing by settlement currencies the segregated sell or buy position of the clearing member calculated for Day T. KELER informs the clearing member until 7:30 hrs on T+1 Day on the financial and securities netting in the electronic customer relationship system KID or in the form of SWIFT messages in RCMS.

Principles of multinet settlement
Multinet settlement is completed as follows for the cash transactions concluded at the BSE MTF (except for fix and auction deals):
  • settlement is completed in a rolling manner (settlement takes place daily and not only at the end of the month) 
  • settlement cycle is T+3 in the BSE MTF,
  • multilateral netting is completed (by securities and in foreign currency a net buy or a net sell position is defined for each clearing member) (where T is trade date, number of days refers to business days). 
The Delivery versus Payment (DVP) principle is applied during settlement, accordingly financial and securities settlement are interdependent, therefore if one is not completed, the other cannot be completed either.
Multinet settlement can be completed on the consolidated client and own accounts of the clearing member, on the accounts opened by the clearing member for non-clearing members and also on the accounts opened for settlement agent clearing members and non-clearing members.

Undertaking guarantee
KELER CCP undertakes guarantee for the settlement of cash securities transactions concluded at the BSE MTF. The essence of central counterparty (CCP) is that the central counterparty guarantees transaction performance and in case of eventual default it acts as seller toward the buyer and as buyer towards the seller (this process is called novation), thus guaranteeing the transactions it accepted, therefore the central counterparty is liable for performance as a contractual counterparty. If either party fails to meet obligations, the central counterparty is obliged to honor obligations resulting from the transactions even with the use of its capital. Cash securities transactions concluded at the BSE MTF are considered regulated market transactions with multinet settlement guaranteed by KELER CCP.
In cash securities transactions with multinet settlement (T+2, T+3 settlement) KELER CCP undertakes performance guarantee after multilateral netting is completed.

Performance of transactions with multinet settlement
The net securities seller on Day T is obliged to make sure that at the latest until 14:00 hrs on Settlement Day (SD) the securities required for the performance of transactions on Day T are available on the segregated stock exchange securities settlement sub accounts. The multinet net buyer on Day T is obliged to make sure that at the latest until 14:00 hrs on SD the HUF and foreign currency cover required for the performance of transactions to be settled on SD is available in a segregated manner at its bank accounts.
From 08:00 hrs on SD (start of real time processing) KELER withdraws the securities required for the SD performance as an item with distinguished priority from the stock exchange securities settlement sub accounts of the clearing member and the stock exchange settlement sub accounts opened by non-clearing members and credits the securities on the technical stock exchange settlement account of KELER CCP that is used for performance. Simultaneously KELER makes an entry with distinguished priority to debit the funds required for SD settlement to the segregated bank accounts of the clearing member or if the HUF bank account of the clearing member is kept by the NBH from the bank account kept by the NBH and credits the amount to the stock exchange technical bank account of KELER CCP.
KELER continuously verifies cover for the debit entries initiated and if sufficient cover is available on the accounts of the clearing member, the entry is made immediately. If the bank account is kept by the NBH, KELER inputs a debit order in VIBER to the NBH, and the NBH verifies cover and makes the entry to the account. In this case based on the advice of the NBH KELER credits the stock exchange technical bank account.

Performance of transactions with multinet settlement
The clearing member / settlement agent receives information on obligations related to the performance of transactions with multinet settlement from the call sent by KELER CCP or from the stock exchange trade confirmation. Having regard to the DVP principle applied for settlements clearing members involved can access securities or amounts due to them if the other side of the transaction (financial or securities performance) is completed. Following collection of the financial and securities collateral required for performance KELER posts the necessary debit and credit items to the technical securities account of KELER CCP and the securities accounts of the clearing member and to the stock exchange technical bank account of KELER CCP and the bank accounts of the clearing member. Account entries, securities and financial performance are final and irrevocable. Consequently the final deadline of multinet settlement is 14:00 hrs, however if the necessary securities and/or funds are available on the technical accounts of each member prior to the final deadline, performance can take place earlier. KELER CCP advises clearing members in a separate message via KID on the multinet settlement completed. In case of multinet settlement performed after 14:00 hrs (default) KELER CCP is entitled to collect fees related to default (securities default basic fee, late fee and default surcharge) as defined in its Fee Schedule.

Provision of collateral
In the period from the trade date of cash transactions with multinet settlement (Day T) until settlement date (SD, that is T+3 in case of BSE MTF deals) clearing members are obliged to provide collateral.
KELER CCP publishes the extent of this obligation in an Announcement.

More details are available at:
tozsdeielszamolas@kelerkszf.hu
Pursuant to the decision of the State Debt Management Agency from 02 January, 2012 secondary trading in government securities (government bonds and 12-month discount treasuries) and market making are managed on the MTS Hungary platform operated by EuroMTS Ltd. Cash securities transactions made on MTS Hungary are transactions with multinet settlement guaranteed by KELER CCP. As from 01 January, 2013 KELER CCP completes clearing and undertakes guarantee, KELER is in charge of account management with respect to cash securities transactions with multinet settlement concluded on MTS Hungary.

Receipt of trade data
KELER CCP accepts transactions in line with the provisions of the bilateral cooperation agreement concluded by EuroMTS and KELER CCP. KELER CCP takes receipt of information related to transactions in the format of SWIFT MT518 messages once deals are concluded. The data of transactions transmitted cannot be modified subsequently by the clearing member, KELER CCP accepts a request on the modification of data on trading from MTS Hungary only. The MTS Hungary member can cancel deals submitted on the trading platform until the close of market on trade day. KELER CCP receives the cancellation as a new deal in the opposite direction, as a result the balance of the two transactions will be 0 after the end-of-day clearing. Therefore the cancelled transaction will impact neither the multinet financial position, nor the obligation to provide collateral. Transactions concluded on MTS Hungary are received at the gross price.

Segregation
In line with the provisions of the Act on the capital market own and client securities and own and client funds are to be managed in a segregated manner, therefore KELER maintains dedicated accounts for securities and cash performance. Currently only transactions for own account can be concluded at MTS Hungary.

Netting and confirmation of transactions
KELER CCP completes multilateral netting by clearing member, by securities with a segregated breakdown, showing the segregated sell or buy positions of the clearing member consolidated by securities and calculated for Day T. Furthermore KELER CCP completes the segregated financial netting by clearing members of transactions for Day T, showing by settlement currencies the segregated sell or buy position of the clearing member calculated for Day T. KELER informs the clearing member until 7:30 hrs on T+1 Day on the financial and securities netting in the electronic customer relationship system KID or in the form of SWIFT messages through RCMS.

Principles of multinet settlement
Multinet settlement in case of cash transactions concluded at MTS Hungary is as follows:
  • rolling settlement (settlement is completed every day and not only at a given date, e.g. at month end)
  • with T+2 settlement cycle,
  • with multilateral netting (each clearing member will have a net buy and a net sell position by securities and by currencies) 
    (T refers to trade day, days are business days).
Settlement is based on the DVP (delivery versus payment) principle, accordingly financial and securities settlement are interdependent, if either is not performed, the other will not be performed, either.
Multinet settlement is completed on the consolidated client and own accounts of the clearing member, on the accounts opened by the clearing member for non-clearing members and on the accounts of settlement agent clearing members and accounts opened for non-clearing members.

Undertaking guarantee
KELER CCP is in charge of the settlement of cash securities transactions concluded at MTS Hungary. KELER CCP is acting as the central counterparty (CCP). The essence of CCP is that the central counterparty guarantees transaction performance and in case of eventual default it acts as seller toward the buyer and as buyer towards the seller (this process is called novation), thus guaranteeing the transactions it accepted, therefore the central counterparty is liable for performance as a contractual counterparty. If either party fails to meet obligations, the central counterparty is obliged to honor obligations resulting from the transactions even with the use of its capital.
Multinet cash securities transactions concluded at MTS Hungary are considered transactions concluded at a regulated market guaranteed by KELER CCP.
In cash securities transactions with multinet settlement (with T+2 settlement) concluded at MTS Hungary KELER CCP guarantees performance after multilateral netting.

Principles of multilateral settlement
The net securities seller on Day T is obliged to make sure that at the latest until 14:00 hrs on Settlement Day (SD) the securities required for the performance of transactions on Day T are available on the segregated stock exchange securities settlement sub accounts. The net securities buyer on Day T is obliged to make sure that at the latest until 14:00 hrs on SD the HUF and foreign currency cover required for the performance of transactions to be settled on SD is available in a segregated manner at its bank accounts.
From 08:00 hrs on SD (start of real time processing) KELER withdraws the securities required for SD performance as an item with distinguished priority from the stock exchange securities settlement sub accounts of the clearing member and the stock exchange settlement sub accounts opened by non-clearing members and credits the securities on the technical settlement account of KELER CCP that is used for performance.
Simultaneously KELER makes an entry with distinguished priority to debit the funds required for SD performance to the segregated bank accounts of the clearing member or if the HUF bank account of the clearing member is kept by the NBH from the bank account kept by the NBH and credits the amount to the technical bank account of KELER CCP.
KELER continuously verifies cover for the debit entries initiated and if sufficient cover is available on the accounts of the clearing member, the entry is made immediately. If the bank account is kept by the NBH, KELER inputs a debit order in VIBER to the NBH, and the NBH verifies cover and makes the entry to the account. In this case based on the advice of the NBH KELER credits the technical bank account.

Performance of transactions with multinet settlement
The clearing member / settlement agent receives information on obligations related to the performance of transactions with multinet settlement from the call sent by KELER CCP or from the stock exchange trade confirmation.
Having regard to the DVP principle applied for settlements clearing members involved can access securities or amounts due to them if the other side of the transaction (financial or securities performance) is completed.
Once funds and securities collateral required for performance are withdrawn, KELER posts the corresponding credit and debit entries to the technical securities account of KELER CCP and the securities accounts of the clearing member and the stock exchange technical bank account of KELER CCP and the bank accounts of the clearing member. Account entries, financial and securities settlements are final and irrevocable.
Consequently the final deadline of multinet settlement is 14:00 hrs, however if the necessary securities and/or funds are available on the technical accounts of each member prior to the final deadline, performance can take place earlier.
KELER CCP advises clearing members in a separate message via KID on multinet settlement completed.
In case of multinet settlement performed after 14:00 hrs (default) KELER CCP is entitled to collect default related fees (securities default basic fee, late fee and default surcharge) as defined in its Fee Schedule.

Provision of collateral
In the period from trade date of cash transactions with multinet settlement (Day T) until settlement date (SD, that is the second settlement day after trade day in MTS Hungary: T+2) clearing members are obliged to provide collateral. KELER CCP publishes the extent of this obligation in an Announcement.

More details are available at
tozsdeielszamolas@kelerkszf.hu
Receipt of data on trading
As from 01 January, 2013 KELER CCP completes clearing and undertakes guarantee, KELER is in charge of account management with respect to derivative transactions concluded at the BSE. KELER CCP accepts transactions in line with the provisions of the Bilateral Agreement concluded by the BSE and KELER CCP.
The data of transactions transmitted cannot be modified subsequently by the clearing member, KELER CCP accepts a request on the modification of trading data from the stock exchange only. Following the closing of the market (Day T) KELER CCP receives same day derivative trades from the BSE and confirms transactions accepted. Due to real time position management KELER CCP immediately registers transactions allocated on the BSE (allocation cannot be changed) on the position management account concerned. KELER CCP transfers non-allocated transactions to the own account at the end of the day.

Segregation
Derivative positions are kept and confirmed at clearing member own, clearing member individual client, non-clearing member own and non-clearing member individual client level. Derivative transactions are settled at clearing member own and clearing member consolidated client segregation, this is valid for the entire settlement process. KELER CCP settles non-clearing member positions jointly with the consolidated client positions of the clearing member.
KELER CCP keeps derivative positions on position management accounts.
Only one position management account can be opened for the management of positions by client, including the client of the non-clearing member also, on this account KELER CCP keeps all the derivative positions of the client concerned. The clearing member can open several own position management account, this request is to be advised to KELER CCP upon account opening. Only one own position management account can be opened for non-clearing members. Clearing members involved in market making at the BSE are obliged to open a separate position management account for market making transactions.

Margining and settlement of derivative transactions
Fundamentally, stock exchange derivative transactions have two types: futures and options (including futures based options).
 
In order to ensure the conditions for the settlement of the above deals KELER:
  • keeps securities cash accounts for banks and brokers (own/client unlimited sub account available),
  • the NBH keeps the cash accounts of banks, at KELER there are accounts for collateral purposes only at own/client level,
  • keeps foreign exchange account (banks and brokers) for clearing members, within these accounts segregated (own/client) variation margin and collateral sub accounts are opened.
Deals concluded by clearing members are recorded in position management accounts in KELER CCP. Position management accounts are kept at own/individual client level, in a gross/net (option only net) manner, however, several own accounts (except for non-clearing members) can be opened and the clients of non-clearing members can also be registered. Another condition of settlement is the basic and additional financial collateral to be made by the clearing member, the continuous provision of basic collateral and derivative variation margin defined for the product concerned in the Announcement of KELER CCP and contribution to the Collective Guarantee Fund.
In order to avoid the accumulation of loss, and thereby to reduce the probability of default, KELER CCP settles variation margins daily on the basis of end-of-day settlement prices. For each open position the variation margin is calculated based on the end-of-day price /settlement price of the instrument given. The variation margin of the first day is the difference of the trade price and the closing price of Day T, for settlement days thereafter the difference of the daily closing price and the closing price of the previous settlement day is the variation margin. KELER CCP credits the gain generated as a result of variation margins calculated in the derivative markets to the segregated accounts and collects the arising loss also in line with the principle of segregation (i.e. revalues positions on a daily basis, according to the marked-to-market principle). Thus the clearing house accounts for deals at settlement prices, while positions are actually closed on each day and re-opened at a new price and in the same quantity. Simultaneously with the calculation of the margin, the premium of options is also settled. After making an option deal the beneficiary of the option pays the premium of the option bought during the financial settlement of daily variation margin. If a new position is created the beneficiary of the option has no further payment obligation thereafter until the closing or expiry/exercise of the option. From the time of opening the position the obligor of the option is obliged to meet the collateral payment obligation defined by KELER CCP for open positions. At the end of Day T KELER CCP calculates the daily variation margin and initial margin requirements by clearing members (on a net basis), as well as the basic and additional financial collateral requirement and the CGF value (on the first business day of the month) and informs the clearing member thereof in the stock exchange trading confirmation via the KID system. The spread preference that can be granted between expiries and products is automatically calculated in line with the provisions of the prevailing announcement of KELER KSZF. In case of insufficient variation margin KELER CCP acts in line with the provisions of its General Business Rules on the order of using guarantee elements. The clearing member is obliged to settle the debt arising until the start of trading on the same day or KELER CCP suspends the trading right of the clearing member, thus the suspended clearing member is authorized for position closing only on the day given. In case of default the clearing member has the obligation to pay the default fees defined in the prevailing Fee Schedule of KELER CCP.
Undertaking guarantee
KELER CCP settles standardized futures and option transactions concluded on the BSE. Since the launch of the derivative markets KELER participated as central counterparty (CCP) in the settlement of stock exchange transactions, from 1 January 2009 KELER CCP acts as central counterparty. In the framework of the central counterparty system the central counterparty guarantees the fulfillment of transactions, in case of an eventual default the central counterparty acts as seller towards the buyer and acts as buyer towards the seller (this process is called novation) to guarantee the transactions accepted. As a result of the CCP system if either party defaults KELER CCP is obliged to honor obligations resulting from the transactions even up to the amount of its share capital. Futures and option transactions are regulated market transactions guaranteed by KELER CCP. The guarantee undertaken by KELER CCP becomes valid upon KELER CCP confirming the transactions.

Position closing and performance (termination of futures and option position)
A futures transaction can be closed as follows:
• by position closing,
• by position transfer,
• upon expiry:
- with financial settlement (HUF, foreign currency)
- with physical delivery (securities delivery, warehouse warrant delivery).
 

Position closing
It is not necessary to keep a position until expiry, in order to terminate risks resulting in price changes the position can be closed with the opening of a position of opposite direction. The simplest case of position closing is the conclusion of a deal of opposite direction, when the positions are automatically netted out (the position shall practically cease, although it is not deleted from the open interest), the obligation to provide collateral shall also cease. An additional case of position closing is closing instruction given with the conclusion of a deal of opposite direction, when positions are deleted from open interest.
 
Transfer of open position
Prior to expiry clearing members can order the transfer of positions. By completing the Cash sale and purchase form contract of the BSE the open positions will be transferred, the physical delivery will be included in the Pending delivery items and the physical delivery shall take place between the seller/buyer concluding the contract.

Performance with physical securities delivery
Positions involving physical delivery that are unclosed by expiry (e.g. equities, notional, wheat) may only be performed by physical delivery. In the case of performance involving delivery the seller must physically deliver the underlying of the deal (foreign currency, securities or commodity). The physical delivery of foreign currency or securities may be settled by account transfer, while the delivery of commodities may be effected via the transfer of warehouse receipts or with actual physical delivery also. The buyer must take over the delivered product and pay its counter-value to the seller. Performance with physical delivery of securities: In the case of deals involving the physical delivery of securities, on the settlement day following expiry (equities T+3, debt securities T+2) the party with selling position must make sure by 10:00 hrs that the traded securities are available in its securities account in line with position segregation, while the party with buying position must deposit the counter-value of the traded volume of securities in the purchase price deposit account also in line with position segregation. (In the case of transaction concluded by banks the cash account kept by the NBH is debited via VIBER.) Cash transactions also can be made at the BSE, the trade shall be included in the Pending delivery items and not listed as open position; neither initial, nor variation margin is calculated, and no guarantee applies to such deals.
 
Physical delivery in Commodities section
The performance of wheat instruments may take place by physical delivery (delivery/single round drawing), or with warehouse receipt (issued by an accepted warehouse) / 2 delivery round drawing. In the case of products where BSE does not require performance by warehouse receipt, KELER KSZF does not guarantee physical performance. In this case deals are settled up to the settlement price prevailing on the date of expiry, thereafter deals shall be considered prompt deals. Essentially, delivery can be completed in two ways. In the first case the clearing house creates the sales relationship concerning direct physical delivery between the clearing members in respect of the futures positions unclosed by the last trading day preceding the month of delivery and spot-based options drawn and allocated on the given day, by matching in a predefined way with so-called drawing the seller and buyer members obliged to deliver or take receipt respectively of the underlying of the position. Performance takes place between the sellers and buyers matched in this way. In the second case the clearing house does not match sellers and buyers directly, but each party performs its commitment towards the clearing house (this is performance with warehouse receipts), thereafter the clearing house shall act as an actual counterparty and shall perform its delivery or payment obligation towards the clearing members. The performance of delivery items is T+45 days, the settlement cycle can be extended based on the joint statement of the buyer/seller. Until the delivery is completed initial margin remains with KELER CCP.

Termination of option transaction/Closing of option position (liquidation)
Until option expiry the beneficiary of the option can liquidate the position by selling the same quantity of option of the same series. The obligor of the option can liquidate its position by buying the same quantity of option of the same series. In case of net position management liquidation is completed automatically.

Option exercise
Options are closed by exercising the option position, the position will be deleted and performance by the beneficiary and obligor to the option is completed. When an option with futures base is excercised, the futures positions corresponding to the underlying option product will be opened in the position account of the beneficiary and obligor to the option. This is when option premium is paid for futures based options.

More details are available at
tozsdeielszamolas@kelerkszf.hu