The Central Counterparty (CCP) is the clearing and settlement partner in transactions on the trading venues supported by SIX x-clear.
SIX x-clear does not actively participate in securities trading. Instead, it steps into a stock exchange transaction at the precise moment of trade matching on the respective trading platform, i.e. whenever buy and sell orders match. By so doing, the Central Counterparty represents the buyer to each seller and the seller to each buyer. The trade price corresponds to the price at which the stock exchange transaction is executed.
The CCP eliminates the counterparty risk arising from transactions between the seller and the buyer. It does not, however, guarantee the timely settlement of the transactions. Temporally, SIX x-clear operates in the window between trade and settlement. As soon as a stock exchange transaction is settled, the CCP’s task is accomplished.
The SIX x-clear members' individual trading activities are revealed only to the Central Counterparty, but not to the other participants in the market (full post-trade anonymity).
Concentration in a single counterparty allows for a large number of stock exchange trades to be combined in a single settlement transaction (optional settlement netting).
The offsetting of open positions at different trading centres (cross margining), generates a reduction in the collaterals to be deposited by SIX x-clear members.
With SIX x-clear as the Central Counterparty in a stock exchange transaction, the risk of a counterparty (buyer or seller) defaulting before settlement date, and of the subsequent failed settlement, is eliminated (no counterparty risk).
One of the main advantages of SIX x-clear's service offering is the free choice of settlement location, i.e. members can choose between two different settlement organisations (SIX SIS and Euroclear Bank) in the SIX Swiss Exchange Blue Chip Segment.
SIX x-clear members avail themselves of the services provided by SIX Group.
Within SIX Group, SIX SIS offers custody and settlement services for national and international securities. The accessibility of these services via a single platform – SECOM – means that members can benefit from having just a single technical setup across the entire value chain, from clearing through to global custody and settlement.