CME to make enhancements to EBS Credit scaling factor
Effective this Sunday, December 4 (trade date Monday, December 5), several enhancements will be made to the EBS Credit scaling factor functionality.
EBS Firm risk administrators will have the ability to select the counterparties that NDF scaling factor groups should be applied to. Currently, NDF scaling factor groups, each with their own distinct scaling factor value, apply to all counterparties equally.
This change will allow the risk administrators to select the counterparties that should receive the scaling factor treatment when trading an NDF instrument identified in the scaling factor group.
Counterparties not identified in the scaling factor group will be charged credit utilization of 100% of the notional value of the trade when trading an NDF instrument in the group.
EBS Credit functionality is available for all EBS instruments. It allows a market participant firm to manage its prime and bilateral risk with other market participants for all EBS instruments comprised of Spot, precious metals and non-deliverable forwards (NDF) on EBS Market, eFix Matching Service and EBS Direct trading venues.
EBS Credit supports product scaling factors, which reduce (or increase) the bilateral credit amount utilized for a given trade in a particular instrument with a particular counterparty.