casse di compensazione

English translation: clearing house

15:38 Aug 5, 2020
Italian to English translations [PRO]
Bus/Financial - Business/Commerce (general) / CONVENZIONE PER LA GESTIO
Italian term or phrase: casse di compensazione
3. Il GESTORE agirà in buona fede ed eserciterà la debita diligenza ai fini della selezione e della nomina di intermediari di borsa, market maker, casse di compensazione, deposit taker e controparti ("INCARICATO") presso i quali saranno effettuate le transazioni per MN. Alla data di entrata in vigore del presente CONTRATTO, si prevede che le transazioni in derivati "over-the-counter" per MN saranno effettuate principalmente presso gli intermediari elencati all'Allegato 2. Non si prevede che si verifichino frequenti variazioni significative dell'elenco degli intermediari utilizzati per le transazioni in derivati “over-the- counter” per MN, anche se è possibile che tale elenco cambi nel corso del tempo. Il GESTORE non è responsabile della negligenza, inadempienza dolosa o condotta fraudolenta di un INCARICATO (diverso dalle società del GRUPPO), se il GESTORE stesso ha agito in buona fede, ha esercitato la dovuta diligenza ai fini della selezione e dell'impiego di ciascun INCARICATO e non ha violato alcuna normativa. Nell'eventualità in cui MN subisca una perdita in conseguenza di una mancata consegna di documenti necessari o di un altro atto di negligenza, inadempienza dolosa o condotta fraudolenta da parte di un INCARICATO (diverso dalle società del GRUPPO
garrett higgins
Local time: 17:26
English translation:clearing house
Explanation:
A clearing house is a financial institution formed to facilitate the exchange (i.e., clearance) of payments, securities, or derivatives transactions. The clearing house stands between two clearing firms (also known as member firms or participants). Its purpose is to reduce the risk of a member firm failing to honor its trade settlement obligations.
http://en.wikipedia.org/wiki/Clearing_house_(finance)
(This links to "camera di compensazione", which is the same thing.)

http://dictionary.reverso.net/italian-english/cassa di compe...
Selected response from:

philgoddard
United States
Grading comment
thanks
4 KudoZ points were awarded for this answer



Summary of answers provided
4 +1clearing house
philgoddard
4central counterparties
Mark Pleas
3social insurance provider
Wolfgang Hager


  

Answers


38 mins   confidence: Answerer confidence 3/5Answerer confidence 3/5
social insurance provider


Explanation:
this is a Swiss institution, employer co-financed social security supplied by both cantonal and national casse. Choosing one of these is the obligation of the contracting party, i.a. .


    https://www.storiadellasicurezzasociale.ch/istituzioni/il-sistema-delle-casse/casse-di-compensazione
Wolfgang Hager
Italy
Local time: 18:26
Specializes in field
Native speaker of: Native in GermanGerman
PRO pts in category: 24

Peer comments on this answer (and responses from the answerer)
neutral  philgoddard: No, the context is banking.
56 mins
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1 hr   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +1
cassa di compensazione
clearing house


Explanation:
A clearing house is a financial institution formed to facilitate the exchange (i.e., clearance) of payments, securities, or derivatives transactions. The clearing house stands between two clearing firms (also known as member firms or participants). Its purpose is to reduce the risk of a member firm failing to honor its trade settlement obligations.
http://en.wikipedia.org/wiki/Clearing_house_(finance)
(This links to "camera di compensazione", which is the same thing.)

http://dictionary.reverso.net/italian-english/cassa di compe...


philgoddard
United States
Specializes in field
Native speaker of: English
PRO pts in category: 281
Grading comment
thanks

Peer comments on this answer (and responses from the answerer)
agree  Adrian MM.
6 hrs
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40 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5
central counterparties


Explanation:
The use of "casse di compensazione" (central counterparties) in derivatives transactions became mandatory with the entry into force of the European Market Infrastructure Regulation (EMIR) in 2013. The EU made them mandatory in order to reduce risk.

From la Repubblica: "Dal 2013, buona parte dei derivati over-the-counter (Otc), ossia quelli scambiati al di fuori dei mercati regolamenti, dovranno obbligatoriamente passare attraverso le cosiddette 'casse di compensazione'. Un organo terzo tra il venditore e l'acquirente che, dietro compenso, si assumerà il rischio che una delle parti coinvolte nei contratti vada in insolvenza."

From Wikipedia: "The European Securities and Markets Authority (ESMA) applies mandatory clearing obligations for specific OTC derivative contracts if a contract has been assigned a central counterparty under EMIR. The obligations require that over-the-counter derivatives trades are cleared through central counterparties."

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Note added at 1 hr (2020-08-05 17:27:35 GMT)
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I notice that a page at the EU website refers to them as "central clearing counterparties" (CCP):

"Central clearing counterparties (CCPs)
CCPs interpose themselves between counterparties to a derivative contract, becoming the buyer to every seller and the seller to every buyer."

(https://ec.europa.eu/info/business-economy-euro/banking-and-...


However, the use of the word "clearing" here would appear to be erroneous; the actual EMIR regulation itself does not use the word "clearing", and instead has "CCP" stand for "central counterparty" itself:

"1. This Regulation lays down clearing and bilateral risk-management requirements for over-the-counter (‘OTC’) derivative contracts, reporting requirements for derivative contracts and uniform requirements for the performance of activities of central counterparties (‘CCPs’) and trade repositories."

(https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CEL... does not use


As for the difference between "counterparties" in general and "central counterparties" in particular, one London law firm summarizes it as follows:

" 'Non-financial counterparties' are all other Union counterparties to OTC derivative transactions (other than central counterparties)."

(https://www.ashurst.com/en/news-and-insights/hubs/finance-hu...

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Note added at 2 hrs (2020-08-05 17:53:08 GMT)
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I should add that although a central counterparty is always a clearing house, a clearing house is not always a central counterparty.

According to Wikipedia, the creation of central counterparties was first agreed upon by the G20 (not just the EU) in 2008: "In the wake of the financial crisis of 2007–08 the G20 leaders agreed at the 2009 Pittsburgh summit that all standardised derivatives contracts should be traded on exchanges or electronic trading platforms and cleared through central counterparties (CCPs)." (https://en.wikipedia.org/wiki/Central_counterparty_clearing)

Also from Wikipedia: "After legally binding agreement (i.e., execution) of a trade between a buyer and a seller, the role of the clearing house is to centralize and standardize all of the steps leading up to the payment (i.e. settlement ) of the transaction. The purpose is to reduce the cost, settlement risk and operational risk of clearing and settling multiple transactions among multiple parties. In addition to the above services, central counterparty clearing (CCP) takes on counterparty risk by stepping in between the original buyer and seller of a financial contract, such as a derivative. The role of the CCP is to perform the obligations under the contract agreed between the two counterparties, thereby removing the counterparty risk..."

Here is a helpful video that explains the situation: https://www.youtube.com/watch?v=o-Yxjs33aQs It says, "As the name implies, a central counterparty fulfills the function of central clearing for buyers and sellers of securities, *but beyond that it also acts as a guarantor for transactions*."

In short, when a clearing house assumes all the systemic risk and serves as a guarantor -- which is now required in the case of derivative transactions -- then it is acting as a central counterparty.

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Note added at 2 hrs (2020-08-05 18:27:29 GMT)
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It occurred to me to go and check the EU's own Italian translation of the consolidated EMIR regulation, at https://eur-lex.europa.eu/legal-content/IT/TXT/HTML/?uri=CEL...

It turns out that "cass*" does not occur anywhere in the consolidated regulation (or even in the original regulation of 4 July 2012). But the regulation refers to "compensazione" a total of 134 times. In fact, in Art. 1 it refers to "compensazione", "controparti centrali", "controparti finanziarie" and "controparti non finanziarie":

"Articolo 1

Oggetto e ambito di applicazione

1. Il presente regolamento fissa obblighi di compensazione e di gestione del rischio bilaterale per i contratti derivati over-the-counter («OTC»), obblighi di segnalazione per i contratti derivati e obblighi uniformi per l’esercizio delle attività delle controparti centrali («CCP») e dei repertori di dati sulle negoziazioni.

2. Il presente regolamento si applica alle CCP e ai loro partecipanti diretti, alle controparti finanziarie e ai repertori di dati sulle negoziazioni. Si applica altresì alle controparti non finanziarie e alle sedi di negoziazione nei casi previsti."

Since the text does not refer to any entity other than CCPs providing services "di compensazione", it seems that, in the case of post-2013 derivatives, a "cassa di compensazione" must be identical with what the EMIR refers to as a "controparte centrale" (central counterparty).


    https://www.repubblica.it/economia/finanza/2012/04/09/news/derivati_arrivano_le_cassa_di_compensazione-33019833/?ref=search
    https://en.wikipedia.org/wiki/European_Market_Infrastructure_Regulation#Key_aspects
Mark Pleas
Japan
Local time: 02:26
Specializes in field
Native speaker of: Native in EnglishEnglish

Peer comments on this answer (and responses from the answerer)
neutral  philgoddard: I think this is on the right lines, but (a) this text is not just about derivatives, and (b) we have "controparti" later in the sentence.
49 mins
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