CFTC-PR-9023-24 (12-17-24) (CFTC-PR-2412) CFTC Grants QC Clearing LLC DCO Registration Excerpt: December 17, 2024 – WASHINGTON, D.C. — The Commodity Futures Trading Commission today announced it has issued QC Clearing LLC an Order of Registration as a derivatives clearing organization under the Commodity Exchange Act. QC Clearing is a limited liability company registered in Delaware […]
Category: Derivatives Clearing Organization (DCO)
A Derivatives Clearing Organization (DCO) is a specialized entity that facilitates the clearing and settlement of derivatives transactions, ensuring that both parties to a contract can fulfill their obligations. By acting as an intermediary, a DCO mitigates counterparty risk through a process known as novation, where the DCO becomes the buyer to every seller and the seller to every buyer. This structure enhances market stability and transparency, as the DCO manages the collateral and margin requirements necessary to cover potential losses. Registered with regulatory bodies like the Commodity Futures Trading Commission (CFTC), DCOs play a crucial role in the financial markets by promoting confidence and efficiency in trading derivatives.