Cross-margining agreement

An agreement between CCPs to consider positions and supporting collateral at their respective organisations as a portfolio for participants that are members of both organisations. Positions held in cross-margined accounts are subject to lower collateral requirements because the positions held at one CCP collateralise part of the exposure of related positions at the other CCP. In the event of default by a participant whose account is cross-margined, one CCP can use the positions and collateral in the cross-margined account at the other CCP to cover losses.