The initial margin is calculated with SPAN. („SPAN“ is a registered trademark of Chicago Mercantile Exchange Inc., which is used here under license. Chicago Mercantile Exchange Inc. disclaims any liability for the use of SPAN by a natural or legal person). LME Clear will receive the LME closing/settlement prices and will provide a snapshot of Reuters currency and interest rate data to supplement the end-of-day price rate. For more information on margin methodology and calculations, please download the detailed description of the services. The market brand of LME products is calculated using the following risk methods: Margin versus Collateral is monitored in real time. While LME Clear must reserve the right to ask members for additional guarantees at any time that it deems necessary, it will adopt a tolerance-based method for sending time calls within days. Thresholds are set to determine when additional safeguards should be made available. These thresholds may differ from the member`s rating based on credit quality.
This approach will assist members in their cash management tasks. Margin calculations are based on a two-day liquidation period and a 99% confidence interval. LME Clear has a strong risk management framework that provides the structure for clear risk strategies, processes and internal control mechanisms to manage, assess and control risks to the clearing house. The governance structure is in line with the technical standards of the AEMF.