Under the 3-year agreement, any of the Covered Markets can elect to use CCorp's trade management services for futures contracts covered by the deal, as well as CCorp's services for processing "give-up" transactions and billing services for give-up futures. A give-up transaction occurs when a member firm (the "Carrying Member") contracts with another firm (the "Executing Member")
to execute a trade. The Executing Member then "gives up" or transfers the resulting position to the Carrying Member.
OCC will continue to perform all main clearing and settlement functions for Covered Markets that elect to use the Ccorp trade management and give-up services. These services include: acting as guarantor, overseeing clearing fund and margin deposits, facilitating margin and settlement obligations, managing post-trade transactions, processing and disseminating trade data and
offering 24-hour member support services.
Dennis A. Dutterer, President and CEO of CCorp, said the agreement with OCC is consistent with The Clearing Corporation's model of providing turn-key clearing and processing solutions to a variety of derivatives marketplaces.
"We're delighted to join with the OCC in offering these value-added services to OCC and the Covered Markets, which represent the nation's options exchanges," Dutterer said. "Our agreement illustrates The Clearing Corporation's strategic decision to work with a variety of marketplaces. Our stockholders and the exchanges for which we provide clearing services benefit as we broaden
our client base."
"Our agreement with The Clearing Corporation offers a turn-key front end clearing solution for most of our exchanges and all of our clearing members," said Michael E. Cahill, President and Chief Operating Officer of OCC. "It allows futures clearing firms to access OCC and the Covered Markets via their existing communication links with Ccorp and to use familiar trade management
and give up systems. The result is a clearing solution that combines the best resources of both entities to meet the needs of the exchange and clearing community."
Financial terms of the agreement were not disclosed.
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