clearingyhtiöiden

Clearingyhtiöiden, commonly translated as clearing houses or central counterparties (CCPs), are specialized financial institutions that clear and settle trades on financial markets. In Finnish financial discourse the term clearingyhtiöiden refers to these firms collectively. A CCP interposes itself between buyer and seller, becoming the buyer to every seller and the seller to every buyer. This process, called novation, reduces bilateral credit risk and enables multilateral netting, which lowers the amount of capital that market participants must tie up for margin.

Key functions include risk management, collateral handling, and settlement. Clearingyhtiöiden require participants to post initial margins and variation margins, and they maintain default funds contributed by member institutions to cover losses if a participant fails. They monitor liquidity and capital adequacy, perform daily mark-to-market and netting, and, in case of trouble, activate recovery plans and, if needed, resolution processes.

Regulation and supervision of clearingyhtiöiden generally fall under national authorities and, for EU clearing houses, under EU frameworks such as EMIR (European Market Infrastructure Regulation). CCPs must be authorized by competent authorities, meet strict capital, liquidity, governance, and risk-management requirements, and undergo regular stress testing. They may operate across asset classes, clearing derivatives (such as interest rate, equity, and foreign exchange contracts) and, in some markets, cash securities, or act as a link between different markets through interoperability arrangements.

While clearingyhtiöiden increase market resilience by concentrating and centralizing risk management, they also introduce systemic risk if not properly supervised. Major CCPs include organizations like CME Clearing, Eurex Clearing, LCH.Clearnet, and Nasdaq Clearing, each serving multiple markets and products.