Guide to SFE Margins

Through the process of 'novation' SFE Clearing Corporation (SFECC) becomes the central counter-party (CCP) for all futures and options contracts traded at the Sydney Futures Exchange (SFE), between SFE Clearing Participants.

The process of novation provides a number of benefits for users including surety of payment, margin netting, risk management and liquidity.

Key to the financial integrity of SFECC as the CCP is the administration of both Initial and Variation Margins that minimise SFECC's exposure to changes in market prices (i.e. Market Risk) and counter-party failure (i.e. Credit Risk).

In addition to margins, SFECC imposes strict financial requirements and criteria on its Clearing Participants. For more information on the financial integrity of SFECC please go to the SFE website.