Collateral Management

Collateral Assessment

IDClear conducts collateral valuation on assets belonging to Clearing Members as well as its clients that have a market value. The collateral value is adjusted with haircut value, the percentage of eligible collateral, exchange rate, and securities collateral value limits (collateral disallowance). Collateral valuation performed by IDClear, refers to the principle 5 of PFMI-IOSCO. This principle requires IDClear to receive collateral not only considering credit risk, liquidity risk, and lower market risk but also consider the Wrong Way Risk, Concentration Risk, Operational Risk and Legal Risk.

The formula used in valuing online and offline collateral at IDClear is as follows:

  1. Offline collateral with IDR currency
    Offline Collateral Value = Nominal Value*(1-Haircut)*Collateral Eligibility
  2. Offline with non IDR currency
    The offline collateral that is newly pledged by the Clearing Member will be effective on the following day after the documents verification is completed.
    Offline Collateral Value = Nominal Value*(1-Haircut)*Exchange Rate*Collateral Eligibility
  3. Cash with IDR currency
    Online Collateral IDR Cash Value = Volume IDR*Collateral Eligibility
  4. Cash with non IDR currency
    Online Collateral Non IDR Cash Value = Volume Non IDR*(1-Haircut)*Exchange Rate*Collateral Eligibility
  5. Stocks
    Stock Online collateral valuation considers the perfect collateral and concentration limits. Volume and value of collateral value exceeding the concentration limits are not accounted as collateral.
    Online Collateral Stock Value = Volume*Lowest Price*(1-Haircut)*Collateral Eligibility
  6. Government and Corporate Bonds
    Bonds Online collateral valuation considers the perfect collateral and concentration limit. If the bonds collateral value exceeds the concentration limit then the excess is not accounted as collateral.
    Bond Collateral Value = Market Price*Volume*(1-Haircut)*Collateral Eligibility

To determine the value and type of collateral managed by IDClear please see the online collateral statistic data dan offline collateral statistic data.