UCH informs about changes in the risk management system for forward contracts, taking into account the scaling of the risk-oriented approach to the system of guaranteeing obligations based on the rating assessment of the counterparty risk.
The main change in risk management for forward trading is the modification of the guarantee system, where the size and terms of guarantee fees will depend on the rating of a particular participant. Instead of single fixed rates, the system will provide for flexible settings of interest rates for different risk groups of clearing participants.
The changes cover two key stages of ensuring:
- Guarantee fee for participation in the auction (GF1)
Differential rates: For participants with a higher rating (categories A, B, C), the fee rate will be 5%, while for less reliable participants (categories D and E) it will be 7.5 %.
Terms of transfer to the seller: Depending on the rating of the winner of the auction, the share of funds that is immediately transferred to the seller and that is blocked until a certain stage of contract execution will be determined.
For group A, the seller will immediately receive the full amount of the first guarantee fee for participation in the auction for inclusion in the forward payment after both parties sign the contract and pay the forward performance guarantee fee (GF 2).
For group B, after signing the contract and paying GF 2, the seller will be transferred 70% of the forward amount, the remaining 30% - after shipping at least 15% of the contracted volume of timber.
For groups C, D and E, after signing the contract and paying GF 2, the seller will be transferred 50% of the forward amount, the remaining 50% - after shipping at least 15% of the contracted volume of timber.
- Forward execution guarantee fee (GF 2)
Fee rates: The percentages of the total amount for the second fee will be the same as for the first: 5% for categories A, B and C, and 7.5% for categories D and E.
Ratio of cash and bank guarantee: Participants will have the right to cover part of the second installment with a bank guarantee, and this share will also depend on the rating.
The highest-ranked participants will be able to use more bank guarantees:
Group A: 30% in cash and 70% in bank guarantee.
Group B: 50% in cash and 50% in bank guarantee.
Group C: 60% in cash and 40% in bank guarantee.
Groups D and E: will have the strictest requirements (70% and 80% in cash and only 30% and 20% in bank guarantee, respectively).
