The Ulaanbaatar Securities Exchange implements the market efficiency diminishing operating and inefficient transaction costs as a consequence of clearance for the transactions occurring during the trading through the clearing members and conducting risk management while managing post trade clearing and settlement procedures within the license of clearing operation in stock market. Additionally, we have advantages of providing financial market sustainability, preventing systematic risk, and reducing default risk throughout margin and collateral funds.

We operate using internationally adopted common methodologies, two-tier settlement and multilateral netting settlement structure. As a consequence of using multilateral netting settlement structure, CCP acts as a buyer for the seller, a seller for the buyer and this means that CCP takes credit risk on behalf of the trading participants. We verify and record orders in accordance with international standards in order to develop a sustainable and efficient market.

Clearing members shall be professional participants in the market and legal entity having participantship with the CCP, who has responsibilities to ensure that securities clearing and settlement procedures should be completed regularly and to mitigate credit risk. Clearing member could be one of the 2 types of memberships, a general clearing member who can handle settlement for other members and a direct clearing member who can conduct settlement for itself.

Currently, the following members that signed membership contract with the Exchange operate:

Please contact the following address for any inquiries or requests to join as a clearing member.

UBX Membership division

Phone: +976-7000-0501, +976-7000-0502
Mail: info@ubx.mn

We cooperate with commercial banks that conduct funds transfer and depository institutions that have duties to deposit securities and to record the ledger while running clearing and settlement procedures.

Depository institution

Central Securities Depository - Clearing participant that handles securities deposit, recording transactions based on the CCP's instruction, and performing settlement after signing contract with CCP and clearing members, is responsible to notify the CCP concerning any change in clearing participant's securities account.

We commenced cooperation with custodian banks in 2019 and the following banks have been working with us representing a part of our clearing and settlement system, and having main duties to perform any transaction under the settlement instruction we provided and to record any deposit and transfer.

	Golomt bank The Exchange has been working with the custodian bank of Golomt bank signing a cooperation agreement since July, 2019.
	Khan bank The Exchange has been working with the custodian bank of Khan bank signing a cooperation agreement since May, 2020.
	Trade and Development The Exchange has been working with the custodian bank of Trade and Development bank signing a cooperation agreement since April, 2020.
Settlement bank
	Capitron bank Capitron bank is responsible for creating a deposit account for the payment transactions after trading upon the requests from CCP and clearing members and performing payment instructions according to the contract, holds a collateral account and works as a settlement bank signing a contract with the Exchange.
	Bogd bank Bogd bank is responsible for creating a deposit account for the payment transactions after trading upon the requests from CCP and clearing members and performing payment instructions according to the contract, holds a collateral account and works as a settlement bank signing a contract with the Exchange.

The Risks might be arised from the CCP clearing and settlement, are members' solvency risk, risk of security price variation, collateral liquidity risk and other risks. In order to cover the risks, we implement a dedicated and non-stop risk management system.

When the clearing member becomes default, alternatively, not being able to perform payment obligation, the whole clearing and settlement procedure is impacted worse, furthermore, systematic risk is occured. We use the following sequence which is the international most common methodology to settle the loss if the clearing member defaulted.