Account Structure and Account Types

Following accounts are used by Muqassa for trade, position, margin, and collateral management:

Overview

Clearing is a process to guarantee and confirm the transactions prior to settlement between the Participants, to establish final positions for settlement. Muqassa clears exchange traded transactions on open offer basis, where Muqassa places itself between the counter parties at the time of matching. 

Products Cleared

  • Equities 
  • Sukuk & Bonds 
  • ETFs 
  • REITs 

Account Structure and Account Types

Following accounts are used by Muqassa for trade, position, margin, and collateral management:

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Members House Trade and Position Account

Accounts used to trade and keep related position for Member`s own transactions.

Market Maker (House/Client) Trade and Position Account

Market Maker (House/Client) Trade and Position Account can also be opened for Members for market making activities.

Client Trade and Position Account (Net/Gross)

Muqassa offers two types of client trade and position accounts:

First one is the Net Client Trade and Position Account, where positions taken on the same contract with opposite sides will be closed automatically by Muqassa. 

The other one is the Gross Client Trade and Position Account, where positions taken on the same contract with opposite sides will be kept in the account until it is closed by the Member.

Individual Client Trade and Position Account

Individual Client Trade and Position Account will be opened to capture trade and keep related position related to an Individual Client.

Allocation account

used as a temporary house Trading Account to captures both Member’s own trades and client trades. All trades captured on allocation account will be considered as the Member own trades until rectified.

Client Murabaha Trading Account

Client Murabaha Trading Account used to capture Murabaha Client trades.

Margin and Collateral Accounts

Member House collateral account

Account used to keep collateral against the margin requirement calculated for Member`s own positions at House -Trade and Position Accounts.

Client Collateral Accounts

Two types of client collateral accounts are offered:

Individual Client Collateral Account: Account that is used to keep collateral of an individual Client. The collateral at this account shall only be used to cover the margin requirement calculated for the positions of the Client. This account could be opened upon the request of the Member.

Omnibus Client Collateral Account: Account that is used to keep collateral of multiple Clients. The collateral at this account shall only be used to cover the margin requirement calculated for the positions of the same group of Clients. This is the standard account opened for each Member.

Default Fund Account

Default Fund Account is used to hold default fund contributions.

Free Cash Account

Free Cash Account is used to hold cash. It is free from any margin requirement.

Trade management

  • Rectify Trades will allow members to rectify any trade within the days & time restriction set by Muqassa. Rectify can include changing the account number or splitting quantity into several new trades. 
  • Split Trade will allow members to split the quantity of one trade into multiple trades.  
  • Average Price Trade is intended to combine a group of trades into one trade. 

Settlement Instructions

Muqassa- Cleared Trades  

  •     Member End client resulting from Gross trading account and trades with T+0 settlement date will be sent real time, if trades are resulting from Net Trading account instruction will be generated end of day.  
  •    Member to Muqassa Settlement instruction will be generated on net bases end of day 

 

Non- Muqassa Cleared Trades 

Member to Member (OTC Trades) will be generated real time (Gross) 

Collateral

  • Muqassa is accepting SAR cash as collateral. Collateral should be transferred by the Member to Muqassa account at the central bank (SAMA). 
  • Muqassa also accept securities (Member should deposit security as collateral to Muqassa collateral account at Securities Depository Centre. 

Member can withdraw collateral within the timeframes specified. Internal collateral transfer between Member accounts at Muqassa is possible.  

Collateral Investment

Muqassa invests the cash collateral in accordance with the investment policy. Certain portion of the interest received is deposited to member collateral accounts.

Daily Cycle Time

Particulars Time (KSA)
Cash Market Clearing operations timings  08:00 – 16:00
Deposit of cash collateral  09:00 – 15:30
Starts Intraday margin call 10:00 
Deadline for final end of day margin call cover  11:00
Withdrawal of cash collateral  11:00 – 15:30 
Final intraday margin call 14:30
Rectify trade time (including split and average price) deadline Trade Date (15:55)
Rectify Trade day (including split and average price) deadline 

T+0=NA 

T+1 on T+0 EOD 

T+2 on T+1 EOD
End of day margin calculation and margin call issuance 16:30
Auto Rectify by the CCP on intended settlement date  05:00
CCP placing mandatory buy-in orders for failed settlement regarding member to CCP instructions  2nd buy-in session 13:35 
Clearing house reports available from  17:00 
Default fund contribution (resize) Notification date + 3 working days

 

Fees

Cash Market Clearing (0.00005), which is equal to (0.5) basis points of the executed transaction value.