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Report on Margin
Cross-Margining
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A. Cross-margining may be defined as the practice of reducing the total margin payment of a market participant by allowing participants who trade in related products and possibly on more than one market (for example, the cash and derivative markets) to recognize reduced risks associated with offsetting open positions (i.e., where a decrease in a position's value in one market is likely to be offset by a gain in a corresponding position's value in another market).
B. Depending upon the market characteristics, market authorities might want to consider the possibility (including potential benefits, risks and legal restrictions) of establishing a cross-margining system which would be practiced as between cash and options products, or options and futures products
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Report on Margin
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