Clearing Agreement for Switzerland

Clearing Agreement Template for Switzerland

A comprehensive legal agreement governed by Swiss law that establishes and regulates the relationship between a clearing house/central counterparty (CCP) and a clearing member. The document outlines the terms and conditions for clearing services, including membership requirements, risk management procedures, default mechanisms, and operational processes. It ensures compliance with Swiss financial regulations, particularly the Financial Market Infrastructure Act (FMIA) and FINMA requirements, while establishing clear rights, obligations, and procedures for both parties in clearing financial transactions.

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What is a Clearing Agreement?

A Clearing Agreement is a crucial document used to establish and govern the relationship between clearing houses/CCPs and their members in the Swiss financial markets. This agreement is essential when a financial institution seeks to become a clearing member and access clearing services for various financial instruments. The document encompasses detailed provisions for clearing operations, risk management, default procedures, and regulatory compliance under Swiss law, particularly the FMIA and FINMA regulations. It's designed to protect market stability and participant interests while ensuring efficient clearing operations. The agreement typically includes comprehensive terms about membership criteria, margin requirements, default management, fee structures, and technological specifications, making it a foundational document for participation in Swiss clearing systems.

What sections should be included in a Clearing Agreement?

1. Parties: Identification of the clearing house/provider and the clearing member/participant

2. Background: Context of the agreement and brief description of the clearing services to be provided

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and interpretation rules

4. Scope of Services: Description of clearing services, eligible transactions, and service levels

5. Membership Requirements: Ongoing requirements for maintaining clearing membership status

6. Rights and Obligations: Core responsibilities and rights of both parties

7. Margin Requirements: Rules for initial and variation margin, calculation methods, and eligible collateral

8. Default Procedures: Process for handling defaults, close-out procedures, and loss allocation

9. Fees and Payments: Fee structure, payment terms, and billing procedures

10. Risk Management: Risk monitoring, control measures, and reporting requirements

11. Representations and Warranties: Standard legal assurances from both parties

12. Confidentiality: Protection and handling of confidential information

13. Term and Termination: Duration, renewal, and termination provisions

14. Governing Law and Jurisdiction: Choice of Swiss law and jurisdiction details

15. Miscellaneous: Standard boilerplate provisions including notices, amendments, and assignment

What sections are optional to include in a Clearing Agreement?

1. Cross-Border Services: Additional provisions for clearing services involving multiple jurisdictions

2. Direct Electronic Access: Terms for electronic trading and clearing system access, if applicable

3. Client Clearing: Additional terms for members providing clearing services to their own clients

4. Segregation Models: Different account structures and segregation options if multiple models are offered

5. Additional Services: Terms for optional value-added services such as compression or reporting

6. Emergency Provisions: Procedures for handling market emergencies or technical failures

7. Insurance Requirements: Specific insurance coverage requirements if applicable

What schedules should be included in a Clearing Agreement?

1. Schedule 1 - Eligible Products: List of products and asset classes eligible for clearing

2. Schedule 2 - Fee Schedule: Detailed fee structure and calculations

3. Schedule 3 - Operational Procedures: Detailed operational processes and technical requirements

4. Schedule 4 - Risk Management Procedures: Detailed risk management requirements and procedures

5. Schedule 5 - Forms and Notices: Standard forms for various notices and requests

6. Schedule 6 - Technical Requirements: IT systems and connectivity requirements

7. Schedule 7 - Service Level Agreement: Detailed service levels and performance metrics

8. Appendix A - Contact Details: List of key contacts and escalation procedures

9. Appendix B - Eligible Collateral: List of acceptable collateral types and haircuts

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Switzerland

Publisher

Genie AI

Document Type

Service Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Financial Services

Banking

Securities Trading

Investment Management

Asset Management

Insurance

Commodities Trading

FinTech

Market Infrastructure

Relevant Teams

Legal

Compliance

Risk Management

Operations

Trading

Treasury

Technology

Finance

Client Services

Product Management

Regulatory Reporting

Collateral Management

Relevant Roles

Chief Risk Officer

Head of Operations

Legal Counsel

Compliance Officer

Chief Financial Officer

Head of Clearing

Risk Manager

Operations Manager

Clearing Operations Specialist

Default Manager

Collateral Manager

Systems Administrator

Head of Trading

Treasury Manager

Chief Technology Officer

Regulatory Reporting Officer

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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