Central Counterparty for Equities (CCP)

In March 2003, Deutsche Börse introduced the Central Counterparty (CCP) on the Xetra® trading system and on the floor at FWB® Frankfurter Wertpapierbörse (Frankfurt Stock Exchange). In trades between buyers and sellers, the CCP generally acts as a counterparty. Thus, Deutsche Börse has extended the existing two-tier process chain on the cash market (trading and settlement) by adding a clearing function.

The highly sophisticated and, at the same time, flexible concept of the CCP offers market participants many advantages. The Central Counterparty ensures, for instance, for both buyers and sellers of equities absolute anonymity across the whole securities process chain. Another advantage of the CCP: participants are offered central risk management with immediate determination and provision of the risk positions and margin requirements. The functionality of gross delivery management enables market participants to plan their trades ahead of settlement, i.e., to decide when a trade is to be routed to settlement. With the CCP it is, moreover, possible to offset the purchases of a participant against its sales (netting).