Derivatives Exchange Membership

What are the cons of Exchange Membership?

Membership provides benefits, but it also imposes obligations to adhere to the rules of the Exchange e.g. in respect of minimum financial resources, regulatory approvals, dispute resolution and general conduct in relation to off-Exchange clients and other Exchange members.

What are the types of members?

There are a number of ‘levels’ of Exchange membership, generally described as Clearing Members and Non–Clearing Members.

Clearing Members are subject to substantially higher capital requirements than their Non Clearing counterparts.  There is often a further sub category, Public Order and Non Public Order, which defines whether the Non Clearing member is allowed to directly execute trades on behalf of their clients who are not exchange members.

What is the exchange membership criteria?

As long as you can satisfy the criteria set by the Exchange, anyone can become a member. The criteria will include capital requirements as well as the necessary regulatory requirements imposed by financial regulators.