DCASS Terminal User Guide 2 – Account

2.1 Last updated date 10/2016

2 ACCOUNT

2.1 ACCOUNT STRUCTURE

2.1.1 ACCOUNT TYPE

There are eight types of clearing accounts in DCASS for trade and position keeping: House Account Client Offset Claim Account Market Maker Account Daily Account Omnibus Client Account Sink Account Individual Client Account APT Account A brief description of their function, their position keeping method and margining style is listed below.

Account Type

Function Position Keeping

Method

Margining Style

House Keep proprietary trades and positions

Net Net

Market Maker Keep trades and positions of Market Makers

Net Net

Omnibus Client

Keep trades and positions of clients on an omnibus basis

Gross Gross

Individual Client

Keep trades and positions for a single individual client.

Net Net

Client Offset Claim

Keep spread and offsetable positions of individual clients for client offset claim purpose

Gross Net

Daily A system account works as an intermediate account for Average Price Trade operation.

Trades and positions can only be kept in Daily Account for the day and must be allocated to other accounts before the end of a business day. Otherwise, the trades and positions will be emptied to the Sink Account.

If intra-day margin is triggered when there are positions in the Daily Account during the day, the margining style on such positions will be gross.

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Account Type

Function Position Keeping

Method

Margining Style

Sink A system default account to keep trades and positions not emptied from Daily Account at the end of a business day. Clearing Participants will be required to move trades/positions out of the Sink Account to other accounts on the next day.

Trades and positions will be attributed to house account and will be kept gross.

Gross

APT A system default account used for calculating average price trades. It will store the contract value difference as a result of the rounding difference in the calculation of the APT.

Intermediate trades with zero position

N/A

Notes: 1) Account types "CNET" and “ANET” are reserved for Clearing House internal use

only. Clearing Participants should ignore any accounts assigned with this account type

2) During the day, an account with “Net” position keeping method may still have both

long and short positions. The “Auto-Netting” process carried out during the After Business process will automatically net off the positions

Separate sets of clearing account types will be created for SEOCH and HKCC Participants. For General Clearing Participants (“GCP”), a separate set of clearing account types (excluding the Daily Account, Sink Account and APT Account) will be created for keeping the trades and positions of each Non-Clearing Participant registered under its appointed GCP. For account structure of Non-Clearing Participant, please refer to section 2.1.3

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2.1.2 NAMING CONVENTION

Account Type HKCC SEOCH

House HK CABC H(1) HK CABC Hn(2) HK CABC H-XXXXX(3), HK CABC Hn-XXXXX

HK CABC P HK CABC Pn HK CABC P-XXXXX HK CABC Pn-XXXXX

Market Maker HK CABC R-XXXXX HK CABC nnnn-XXXXX

HK CABC M-XXXXX HK CABC Mn

Omnibus Client HK CABC C HK CABC Cn HK CABC C-XXXXX

HK CABC A HK CABC An HK CABC A-XXXXX

Individual Client HK CABC Cnnnn HK CABC Annnn

Client Offset Claim HK CABC C9nnn HK CABC A9nnn

Daily HK CABC DA HK CABC DAS

Sink HK CABC SINK HK CABC SINKS

APT HK CABC APT

Notes: 1) “CABC” is the DCASS customer code assigned by HKCC/SEOCH 2) “n” represents a numerical value ranging from 0 to 9 3) “XXXXX” is the user group assigned by HKEX’s Trading Department for Exchange

Participant “ABC”

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2.1.3 EXAMPLE

The followings are the DCASS account structure of: (i) a Clearing Participant of HKCC

(ii) a Direct Clearing Participant of SEOCH:

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Notes: 1) Trades for HKFE products executed at HKATS will store in the corresponding

DCASS account and the position will be shown in the “C1” account. E.g. If traders of “ABC” specified “C” as the account to store the trades, the trades will be propagated to “HK CABC C”. The position will be shown in “HK CABC C1”

Trades for stock options executed at HKATS will store in the corresponding DCASS account and the position will be shown in the “A1” account. E.g. If traders of “ABC” specified “A” as the account to store the trades, the trades will be propagated to “HK CABC A”. The position will be shown in “HK CABC A1”

2) If no account information or an invalid account is specified in the order (e.g. trader

of “ABC” enters “CC” instead of “C1” as the account to store the trade), the system will automatically store the matched trade into a default account preset in HKATS. If the default account is “HK ABC C”, the trade will be propagated to “HK CABC C”, “Errol log” will be shown under the “Attention” field in the Trade History window for that particular trade

3) Trades that executed at HKATS and then propagated to DCASS can be identified in

the Trade History Window by having “Global deal nbr” with value and “Org. trade nbr” being blank

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The followings are the DCASS account structure of: (i) a Non-Clearing Participant registered under its appointed General Clearing

Participant of HKCC

(ii) a Non-Clearing Participant registered under its appointed General Clearing

Participant of SEOCH

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2.2 ACCOUNT DETAILS WINDOW

The Account Details window displays information about the Clearing Participant’s accounts. Search results can be filtered by specifying part of, or a full account name, and also by using the checkboxes in the Account State field. Account States are “Active”, “Inactive”, “Deleted” or “Registered”. Checking the “All” checkbox will include all states in the search. Selection Filters: Filter Description Account Specify a particular account, or use the wildcards (* and %) to

retrieve the matching accounts.

Account State Only the accounts of the states checked will be displayed: All, Active, Inactive, Deleted or Registered

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List Columns Field Description Account Indicates the Account ID

Account text

Will be used to specify the owner of the account if a customer is created to clear both HKCC and SEOCH products.

Auto Netting

Indicates whether the account’s position will be automatically netted during the After Business process. If the position keeping method of this account is “net”, it will be set to “yes”. For the account marked as “Auto Netting”, there is no need to perform “Position Netting” operation.

Created

The time and date on which this account was created.

Emptied To

Trades that are not dealt with before After Business processing will be transferred to this account.

Fee Type

Fee association for the account

Position Acct If a Position Account is defined for an account, this is where the positions are being held. Otherwise, positions are retained in the account.

Margin Acct

This is the account responsible for the margin calculations of all the accounts assigned to it. If a margin account which is not a CNET or ANET account (CNET and ANET accounts are reserved for Clearing House internal use) is defined for an account, the margin calculations for such account will take place at the margin account. Otherwise, margin calculations will take place at the account where the positions are held.

Modified The last time any field of the Account Details was changed.

Settlement Acct

The HKATS account in which this account is connected to.

State

The state of the account. Possible states are: “Active”, “Inactive”, “Registered” and “Deleted”

Account Type

Shows the account types which are grouped into two groups: HKCC and SEOCH (Please refer to Section 2.1 “Account Structure”) Type

House A/C

Market Maker A/C

Omnibus Client A/C

Individual Client A/C

Client Offset Claim A/C

Daily A/C

Sink A/C

HKCC

HOUSE

MM

OMNIBUS

CLIENT

CLIENT

DAILY

SINK

SEOCH

HOUSE_O

MM_O

OMNIBUS_O

CLIENT_O

CLIENT_O

DAILY_O

SINK_O

APT A/C

APT

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Please note that not all the columns available in the windows will be relevant, and as such, this manual will only list those which are relevant to each window. Those columns that are not contained in the guide can be ignored as they are not applicable to our operations. Note: The following columns are not applicable and are not used: Confirmation By CSD Account Custodian

Bank Investor Type Journal Number

Nationality Read Access Risk Conversion

Risk Currency Risk Margin Net

Trade Acct Account Alias

For convenience, it is recommended that the non-applicable columns be hidden when using the application.

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2.3 ACCOUNT PROPAGATION WINDOW

This window is used for displaying information about propagation relationship. As mentioned above, trades from HKATS accounts will go directly to DCASS accounts. Such relationships are referred to as “Trade Propagation”. Similarly, positions of an account may be stored in another account, this relationship will be termed as “Position Propagation”.

An account must be entered into the Account field to perform a search. Wildcards can be used in the Propagation Account field. In this example, positions of account HK CGA1 P will be shown in account HK CGA1 P1. List Columns Field Description Account

Account identification <exchange member number> of the position account, that is the receiving account.

Propagates

Propagated item type option: Trade Position Margin Settlement Origin

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2.4 ACCOUNT POSITION WINDOW

The Account Position window allows users to view the positions in the accounts at that particular time. It displays the Long and Short positions held in each of the Clearing Participant’s account. Specific accounts and series can be filtered for more relevant results. Checking the “Aggregate” checkbox will provide the total positions held for each series, irrespective of which account it is held in. An “*” in the Account column signifies that positions on that particular series are held in more than one account for the Clearing Participant. The default value of “CTD” for field “Date” will provide the real time position information. If “O/N” is selected, the start of day positions (Long and Short) will be provided. “CTD” and “O/N” are the positions brought forward from last business day after considering any capital adjustment if there is any. If “NTD” is selected, the positions (Long and Short) of next clearing day will be provided.

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For SEOCH user, the options [Expires] and [Only deny] can be used to check the “Denies auto” figure (This “Denies auto” is only applicable for SEOCH. See “Deny Automatic Exercise” ). The [Expires] button will filter out positions that are not expired today.

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The [Only deny] button will show positions with “Denies auto” figure not equal to zero.

Selection Filters: Filter Description Account Specify a particular account, or use the wildcards (* and %) to

retrieve the matching accounts. Position account should be used for searching (e.g. HK CGA1 C1). Searching an account with position propagation (e.g. HK CGA1 C) will yield nothing.

Series Specify a particular series, or use the wildcards (* and %) to retrieve the matching series.

Date CTD: the default value. Lists the current position for the current trading day NTD: Lists the position of next trading day O/N: provides the start of day position holding (Long and Short figures only. Other figures are not O/N figures)

Expires Checked to show the position that will be expired today. It should be used when Clearing Participants would like to check the positions with deny automatic request issued.

Only deny Checked together with “Expires” checked will show the positions that are going to be expired today and with Denies Auto figure not equal to 0.

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List Columns Field Description Account The account in which the positions are held

Series The series of the positions held

Long The number of long positions held. Blank indicates zero

Short The number of short positions held. Blank indicates zero

Net The net position of the account (i.e. Long minus Short)

Contr. Size The size of the contract

Cov. Qty The covered quantity (only applicable to call options on HK Stock,

see Section 5.4 “Covered Call”)

Denies Auto

The quantity which does not participate in auto-exercise (only applicable to SEOCH’s product, see Section 4.4 “Deny Automatic Exercise”)

Modified The time and date when the position was last modified

Notes: 1) The following columns are not applicable and are not used:

Delivery Start ISIN 2) On non-business days, DCASS Server is not connected to the DCASS Host.

Positions information displayed in the DCASS Terminal may not be correct. Reports TP001 and TP002 should be used instead.

Right-clicking a position in the Account Position window will activate the following menu. This menu provides direct access to various functions

Trade History: (See section 3.2); Exercise Request: (See section 4.1) Transfer Position: (See section 2.4.1); Deny Automatic: (See section 4.4) Covered Call: (See section 5.4); Cross Product Netting: (See section 2.4.3) Pos. to Net down: (See section 2.4.2)

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2.4.1 POSITION TRANSFER

The Position Transfer function is used to move positions from any one account except the Daily and Sink accounts to another. The positions moved can be partial or in whole but the new account must belong to the same Clearing Participant. Open the window by selecting “Transfer Position” from the Account drop down menu in the main Terminal menu bar or by right-clicking a position from the Account Position

window. The above screen dump shows the transfer of 64 CTD long positions of HEX122.50S3 and 64 CTD short positions of HEX122.50S3 from account A1 to P1 for the Clearing Participant CGA1. 1. Specify an account in the “Account” field (wildcards cannot be used) 2. Specify the series in the “Series” field (wildcards can be used)

3. Select “CTD” or “NTD” in the “Date” field 4. Click the <Search> button at the bottom of the window and all the positions fitting the

search criteria will be shown 5. The “Long Transfer” and “Short Transfer” fields represent the quantity of the Long

and Short positions to be moved to the new account respectively. By default, these fields consist of the full quantity of the positions held. Change the quantity if needed, “0” or blank means that no positions are transferred

6. Specify how the transfer is to be updated in “O/C/N/D” field 7. Input the new account to which the positions are to be moved in the “New Account”

field

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8. Check that the details are correct and click the <Transfer> button to make the

transfer. Confirmation is not required

9. After the transfer, the “Long Transfer” and “Short Transfer” fields will consist of the remaining quantity of the positions held. Close the window if no further transfer is required.

Notes: 1) The positions will be updated by trades marked “Pos. Transfer” (Free Text) and

“Transfer” (Type) which can be seen in the Trade History window 2) When Clearing Participants encounter the message “account does not exist" during

position transfer, Clearing Participants should stop and input a correct New account 3) “CTD” position transfer can be performed only before the System Input Cutoff Time 4) “NTD” position transfer is applicable to AHFT products only and it can be performed

after CTD position has been finalized. Selection Filters: Filter Description Account Specify the account that currently holds the position to be

transferred. Wildcards cannot be used for this particular field.

Series Specify a particular series, or use the wildcards (* and %) to retrieve the matching series.

New Account

Input the account into which the positions will be transferred.

Date Select CTD or “NTD” position

List Columns Field Description Series

The series of the positions held

Long

The number of long positions held. Blank indicates zero

Long Transfer

The number of long positions to be transferred to the new account. Blank indicates zero. By default this field contains the full quantity of the long positions held.

Short

The number of short positions held. Blank indicates zero

Short Transfer

The number of short positions to be transferred to the new account. Blank indicates zero. By default this field contains the full quantity of the short positions held.

O/C/N/D

Specifies the intended effect of the transfer on the new account O Open C Closed N Net (i.e. close as much as possible) D Default (i.e. open)

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2.4.2 POSITION NETTING

The Position Netting function allows the Clearing Participants to net down the position in all accounts except for the Daily and Sink accounts. Netting down can only be performed as long as there are both long and short positions held in the same accounts

on the series.

Notes: 1) Like Position Transfers, trades will be generated by Position Netting and can be

searched in the Trade History window. The Free Text of the corresponding trades are marked as “LongPosNetting”

2) Both “CTD” and “NTD” position will be updated if the position netting is performed before the System Input Cutoff Time

3) After the System Input Cutoff Time, position netting can be performed for AHFT products only and after “CTD” position has been finalized. After action, only “NTD” position will be updated.

To perform position net down:

1. Open the Account Position window and select the

position to be netted down

2. Right click on the position and select “Pos. to Net

Down” from the pop-up menu

3. The Positions to Net Down window will appear with

the corresponding “Account”, “Series” and “Date”

fields filled in. The “Net Down By” field will be

filled with the maximum allowed quantity and users

can manually change this field to a smaller number

4. Click <Send>

5.

6. A confirmation box will appear with the details of

the operation

7. Click <OK> to confirm the operation

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2.4.3 CROSS PRODUCT NETTING

The Cross Product Netting function is used to input position closing request between standard and mini HSI/HHI series. Cross product netting can only be performed for standard and mini series having the same contract month, strike price, call/put but with opposite positions at a ratio of 1:5. Clearing Participants must send their request in this window to perform cross product netting operation for non-autonetting accounts. For autonetting accounts, if needed, Clearing Participants can perform cross product netting in real time. Otherwise, offsetable positions in autonetting accounts will be automatically closed out during AB process. For position netting between standard and Flexible Option series, Clearing Participants should submit Form 4 “On-Behalf Internal Position Adjustment Request Form” to HKCC for the position closing request for all accounts. Offsetable positions of Flexible Options series in the autonetting accounts WILL NOT be automatically closed out during AB process. To perform cross product netting: Open the window by selecting “Cross Product Netting” from the Deal-Trade drop down menu in the main Terminal menu bar or by right-clicking a position from the Account Position window.

1. Specify the series in the “Series” field (wildcards can be used)

2. Specify an account in the “Account” field (wildcards can be used)

3. Specify the date in the “Date” field (CTD or NTD)

4. User can tick checkbox [Calculate Max offsetable Values] to request the calculation of the maximum offsetable values for each pair of positions. [Include Autonetting accounts] and [Include Non-autonetting accounts] checkboxes are used to include or exclude autonetting accounts and non-autonetting accounts from the searching result

5. Click the <Search> button at the bottom of the window to show all the offsetable

positions that meets the search criteria

6. The cross product netting window can be divided into two parts: (A) ‘Current Holding’ columns and (B) ‘Action’ columns. For each pair of positions, user should specify the number of standard contract to be netted down in the field of <Act Std Long> and <Act Std Short> (columns in RED) and the corresponding mini contracts of <Act Mini Short> and <Act Min Long> will be automatically calculated respectively. “0” or blank means that no positions are to be closed.

A B

A B

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(e.g. In the above screen dump of “Cross Product Netting” window, the request is to close 240 lots of HSIZ3 long position against the 1,200 lots of MHIZ3 short position, and 220 lots of HSIZ3 short position against the 1,100 lots of MHIZ3 long position.)

7. Verify the details and click the <Send> button to make the transfer

8. A confirmation window will pop up for user’s confirmation

9. Click <OK> to confirm the operation

10. For rows being executed successfully, the status will be updated to “Succeeded”. For rows not processed, status will be shown as “Failed”. Close the window if no further netting is required

Note: Like Position Netting, trades will be generated by Cross Product Netting and can be searched in the Trade History window. The Deal source and Free Text of the corresponding trades are marked as “XprdNet” and “Crs pdt netting”. “CTD” cross product netting can be performed only before the System Input Cutoff Time and “NTD” cross product netting can be performed only after “CTD” position has been finalized. Selection Filters: Filter Description Series Specify a particular series, or use the wildcards (* and %) to

retrieve the matching series.

Account Specify the account or use the wildcards (* and %) to retrieve the accounts that currently hold the offsetable positions.

Date Select CTD or NTD position to be netted down.

Calculate max offset values

Specify if Clearing Participants want to calculate the maximum offsetable values

Include Autonetting accounts

Specify if autonetting accounts are to be included.

Include Non-autonetting accounts

Specify if non-autonetting accounts are to be included.

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List Columns Field Description Account The account of the positions held

Std Series The standard series of the positions held

Cur Long The number of long positions held on standard series. Blank

indicates zero

Cur Short

The number of short positions held on standard series. Blank indicates zero

Mini Series

The corresponding mini series of the positions held

Cur Mini Long

The number of long positions held on mini series. Blank indicates zero

Cur Mini Short

The number of short positions held on mini series. Blank indicates zero

Act Std Long The number of standard long positions to be netted down. Default value is “0” if [Calculate Max offsetable Values] is unchecked. When [Calculate Max offsetable Values] is checked, it will show the max offsetable long positions for the standard series

Act Std Short The number of standard short positions to be netted down. Default value is “0” if [Calculate Max offsetable Values] is unchecked. When [Calculate Max offsetable Values] is checked, it will show the max offsetable short positions for the standard series

Act Mini Long The number of mini long positions to be netted down. A read-only figure which is automatically calculated based on the Act Std Short

Act Mini Short The number of mini short positions to be netted down. A read-only figure which is automatically calculated based on the Act Std Long

Status The status to indicate the result of the net down action