ASX Clear (Futures)

ASX Clear (Futures) Pty Limited is an Australian clearing house and central counterparty (CCP) for futures and options traded on ASX 24, as well as eligible over-the-counter (OTC) derivatives submitted through an approved affirmation platform. By accepting and novating eligible trades, it becomes the counterparty to each clearing participant and manages the resulting credit exposures through margining, financial resources and default procedures. ^[1][2]

Role in the Australian derivatives market

ASX Clear (Futures) is part of the ASX Group’s clearing and settlement infrastructure. It is distinct from ASX Clear, which clears specified cash-market products and equity derivatives. The two clearing houses serve different markets and product sets: ASX Clear (Futures) primarily supports derivatives traded on ASX 24 and certain OTC derivatives, while ASX Clear handles products such as shares and exchange-traded equity options. ^[2]

The ASX 24 market is operated by Australian Securities Exchange Limited. It facilitates trading in futures and options on products including interest rates, equity indices, energy and commodities. ASX Clear (Futures) provides central counterparty clearing for that market and for eligible OTC interest-rate derivatives registered with it. ^[3] ASX describes the facility as clearing exchange-traded and OTC derivatives; OTC transactions must meet the applicable eligibility and submission requirements, including submission through an approved affirmation platform. ^[1]

Clearing is a post-trade function, separate from the execution of a trade on an exchange or the negotiation of an OTC contract. The trading parties submit eligible transactions for registration under the clearing house’s rules. A central counterparty structure is intended to reduce participants’ direct bilateral credit exposures by interposing the CCP between them. ASX characterises the CCP as the seller to every buyer and buyer to every seller in the relevant market. ^[1][2]

Novation and open contracts

When ASX Clear (Futures) accepts and novates a market contract or eligible OTC transaction, the original trade is replaced by two open contracts: one between the clearing house and each respective clearing participant. If a trading participant is not itself a clearing participant, its contract is with its guarantor clearing participant. The clearing participant is therefore responsible for meeting its obligations to the CCP, whether it clears its own trades or provides clearing services to other participants. ^[1]

After registration, a clearing participant may allocate or transfer an open contract to another clearing participant if the receiving participant accepts it. ASX’s description also provides for certain trading-only participants, with access granted by their guarantor, to allocate an open contract to a different clearing participant, subject to acceptance. ^[1] These arrangements make the clearing participant relationship central to the operation of the clearing system: market access and clearing can be performed by one entity or separated between trading and specialist clearing firms. ^[3]

ASX Clear (Futures) rules define the contractual and operational framework for registration, accounts, margin, position reporting, settlement, options, delivery and default. The published rule structure includes separate parts for registration and obligations, accounts and margins, options, mandatory cash settlement and delivery, and procedures following a default. ^[4] These rules, rather than general product descriptions, govern the rights and obligations of the facility and its participants.

Products and settlement

The cleared instruments include exchange-traded futures and options across several asset classes, and eligible OTC derivatives. ASX materials identify interest-rate, equity-index, energy and commodity contracts in the ASX 24 product range. ^[3] Examples of listed interest-rate contracts include 90-day bank-accepted-bill futures, interbank cash-rate futures, Treasury bond futures, and options on some of those futures. The contract specifications set out the terms of individual listed products. ^[5]

For OTC activity, ASX Clear (Futures) provides clearing for eligible interest-rate derivatives, including Australian- and foreign-currency interest-rate products where the relevant product and transaction meet facility requirements. The facility’s general description refers to OTC trades being submitted through an approved affirmation platform; eligibility should not be inferred merely from a product being an interest-rate derivative. ^[1] Separately, Australian rules may require certain financial institutions above a specified clearing threshold to centrally clear specified OTC interest-rate derivatives. ASIC describes its clearing mandate as applying to certain derivatives denominated in Australian dollars, US dollars, euros, British pounds and Japanese yen. That regulatory mandate is distinct from ASX Clear (Futures)’s product eligibility and acceptance process. ^[6]

ASX states that, at the end of each clearing day, it calculates variation margin based on changes in the value of positions and initial margin on open positions, for settlement on the following business day. Clearing participants arrange settlement through Austraclear and/or ASX Collateral. ^[1] In broad terms, variation margin addresses gains and losses as positions are revalued, while initial margin is collected to cover potential future exposure over the period needed to manage or close positions. The exact calculation, timing and obligations are specified in the facility’s rules and related risk documentation.

Participants and client accounts

Clearing participants are brokers authorised to clear trades through ASX Clear (Futures). A firm may act as both a trading participant and clearing participant, but the roles can be performed by separate entities. Specialist third-party clearers, for example, may provide clearing services to firms that trade but do not clear directly. ^[3] Clients generally have contractual relationships with their relevant participant or participants; the CCP’s direct contractual relationship is with clearing participants, subject to the facility’s rules and client-protection arrangements. ^[3]

ASX provides account structures that allow participants to offer clients an individual client account or a traditional client omnibus account for futures and OTC derivatives. ^[1] Segregation and portability arrangements affect how client positions and collateral may be identified and, subject to the applicable rules and operational conditions, transferred if a clearing participant defaults. Account structures do not eliminate the possibility of loss or guarantee that a transfer will be completed in every circumstance; the relevant rules and client agreements determine the applicable rights and procedures.

Risk management and default handling

The facility’s risk controls are designed both to reduce the likelihood of a clearing participant default and to manage the clearing house’s exposure if one occurs. ASX lists participant minimum capital requirements, intraday and end-of-day monitoring, initial and variation margin, daily stress testing, additional margin calls where required, and powers to restrict permissions, impose limits or direct participants to close out contracts. It also maintains a default fund, comprising commitments from clearing participants and committed ASX assets, which may be used to support the facility’s obligations in a default. ^[7]

If a clearing participant defaults, ASX Clear (Futures) may take steps including suspending the participant and closing out its open positions, as provided by the operating rules. ^[7] The default-management framework is intended to address the defaulting participant’s portfolio and the obligations created by its cleared positions. The facility’s public default overview explains that the rules establish its legal powers and the framework for managing a participant default, while also describing implications for participants and clients. ^[3]

The CCP model centralises and manages counterparty exposure; it does not make derivatives risk-free. A severe market move, a participant default, operational disruption or shortfall in available resources may create losses or affect the orderly handling of positions. Margin requirements and default resources are risk controls, not guarantees against all possible losses. The facility’s own rules and published disclosures set out the relevant procedures and limits.

Licensing and oversight

ASX Clear (Futures) is a licensed operator of a clearing and settlement facility under the Corporations Act 2001. ASIC states that operators of Australian clearing and settlement facilities must hold a licence unless exempt, and that ASIC and the Reserve Bank of Australia supervise facility operators and their participants. ASIC’s functions include assessing licence matters and enforcing licensees’ obligations. ^[8][3]

The Reserve Bank assesses ASX clearing and settlement facilities against its Financial Stability Standards and their broader obligation to reduce systemic risk. Its 2024/25 assessment covered ASX Clear (Futures), alongside the other ASX clearing and settlement facilities. ^[9] Such assessments concern the resilience and risk management of critical market infrastructure; they do not constitute an endorsement of any particular derivative, trading strategy or participant.

Distinction from ASX Clear

Despite the similar names, ASX Clear and ASX Clear (Futures) are separate central counterparties within the ASX Group. ASX Clear is associated with clearing shares, warrants, structured products and equity derivatives traded on ASX Trade or through approved market operators. ASX Clear (Futures) serves ASX 24 futures and options and eligible OTC derivatives. ^[2] This division reflects the different markets and products supported by the facilities, and each has its own operating rules, risk arrangements and regulatory assessments.

See also

- ASX 24 - ASX Clear - Australian Securities Exchange - Reserve Bank of Australia - Australian Securities and Investments Commission - S&P/ASX 200 Index