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Clearing Services

From the ground up, Cboe Digital has built an offering specifically to advance institutional development in the digital asset space including;

  • Multiple Accounts and Sub Accounts for individual clients
  • Account activity in CSV On Demand via Client Portal and End of Day via Secure File Transfer
  • Daily and Monthly Statement to stay compliant with U.S. federal and state-level regulations
  • Internal Multi-Level Approvals for Withdrawals

Our clearing services also include Direct Exchange drop copy processes for independent verification of trades through a robust, industry-standard API and the ability for technology providers (with member permission) to route on behalf of member orders via a single FIX session.

Margin Methodology

Cboe Clear Digital determines margin requirement for open futures positions using a hybrid model which is based on a combination of Filtered Historical Simulated VaR (FHS VaR) and Historical VaR. More information on the general FHS VaR model can be found here: Working Paper No. 525 Filtered Historical Simulation Value-at-Risk Models and their Competitors.

Cboe Clear Digital provides margin relief for portfolios which contain risk offsetting positions on the same underlying commodity. Cboe Clear Digital does not provide any margin offset for positions across different underlying commodities at this time. FCM Clearing Members may also be required to post additional margin to account for concentration, illiquidity or other risk factors that may expose Cboe Clear Digital to excessive risk as determined by Cboe Clear Digital Risk Management Department.

Margin Rates

See margin rates here.

CME SPAN™ RISK PARAMETER FILES

Cboe Clear Digital publishes risk parameter files that can be used with CME SPAN™ for portfolio margin calculation. Margin parameter files are available on https://www.cmegroup.com/ftp/span/data/ccd/.

Financial Safeguards

Default Management Rules and Procedures

While many safeguards are put in place by Cboe Clear Digital to limit the risk of exposure to potential losses from default, the following Financial Resources are available to Cboe Clear Digital as of the date indicated in the event an FCM Clearing Member is declared in Default pursuant to the Clearinghouse’s Rulebook (“Default Financial Resources”).

Default Financial Resource Type Value
As of Date January 9, 2024
Guaranty Fund Requirement $ 0
Corporate Contributions $ 25,000,000
Total Initial Margin Requirement $ 0

In the event an FCM Clearing Member is declared in Default pursuant to the Clearinghouse’s Rulebook, only the margin of the Defaulting FCM Clearing Member and, if applicable and subject to Cboe Clear Digital’s default waterfall, margin held in the Defaulting FCM Clearing Member’s customer account, may be used for default management. The order in which all Cboe Clear Digital Default Financial Resources will be used (“Default Waterfall”) is described below.

Defaulting FCM Clearing Member’s Initial Margin
Defaulting FCM Clearing Member’s Guaranty Fund Contribution1
Corporate Contribution
Non-Defaulting FCM Clearing Members’ Guaranty Fund Contributions
Assessment Powers on FCM Clearing Members2
Recovery & Wind-Down Tools3

1FCM Clearing Members will not have a Guaranty Fund contribution requirement until the Corporate Contribution reaches $100,000,000.
2See Cboe Clear Digital Rulebook for more information.
3Includes measures such as partial or full tear-ups, and variation margin haircutting.

Collateral Custodians

Cboe Digital accepts US Dollars and cryptocurrency for purposes of funding both digital asset spot contracts. Cboe Digital currently accepts US Dollars only for purposes of funding futures contracts. Below are the custodians at which the relevant collateral will be held when it is posted to Cboe Clear Digital:

Custodian
BitGo Trust Company
BMO Harris Bank, N.A.
Brown Brothers Harriman & Co.
Products
Spot only
Spot and Futures
Futures only
US Dollar
--
X
X
Bitcoin
X
--
--
Ethereum
X
--
--
Bitcoin Cash
X
--
--
Litecoin
X
--
--
USD Coin
X
--
--

Deposits & Withdrawals

Fiat

Spot

Members are able to send Fedwire or send ACH directly to Cboe Digital.

  • Cboe Digital charges $15.00 to process a wire transfer.
  • Funds from ACH Deposits may be held for 5 days to complete processing.

Futures

US Dollar cash balances posted to meet futures initial margin and guaranty fund requirements, as well as in excess there of, may be eligible to earn interest. The interest earned will be based on a rate determined by Cboe Digital less 10 basis points (annualized) and will be adjusted periodically based on market conditions. Interest is calculated on a daily basis and will be paid on a monthly basis.

Blockchain

Deposits

Cboe Digital does not charge fees for processing deposits of digital assets, but blockchain fees charged by the relevant network may reduce the amount of digital assets received in your account at Cboe Digital when you make a deposit.

Withdrawals

NOTE: Cboe Digital uses the legacy Bitcoin Cash address format

Frequently Asked Questions (FAQs) - Settlement Cycles

What is changing? 

Before the move to a standard spot market settlement cycle, all digital assets and/or USD used to conduct a trade would be immediately available for settlement of the trade. Now, although the price at the time of the trade is static, we will have cycles where all Members will settle obligations that result from trading activity during a specified window of time each business day.  

 

All trades must consist of two counterparties: a buyer and seller wishing to execute a trade on the same designated terms. When two Members have submitted compatible orders, Cboe Digital Exchange will match the orders and submit them to Cboe Clear Digital (or “Clearinghouse”) for clearing and settlement. Cboe Clear Digital may also approve certain well-qualified institutional Members to trade without pre-funding their account by providing them with trading limits. Those Members will be subject to additional credit-oriented review, and will be required to execute additional documentation. 

 

Are the trading hours changing? 

No, this change will not affect normal trading hours. 

 

When is the settlement cycle and how will I see the results of it? 

Standard cycles will occur each business day at 10:00 am CT. A new file will be automatically generated and made available containing all corresponding balance details for a Member’s account. Members may also query for the snapshot via our Clearing REST API using the Balances endpoint. Please refer to the API documentation found in the link below. 

 

https://www.cboedigital.com/api-documentation/ 

 

Can there be more than one settlement in a day? 

Based on market conditions, the Clearinghouse may initiate an ad-hoc settlement cycle. 

 

How long do I have to settle? 

Members will have two (2) hours to satisfy any outstanding obligations. 

 

What is the difference between a settlement cycle and settlement window? 

A settlement cycle encompasses all trading activity that occurs between the beginning and end of that period of time. Standard cycles are between 10:00 am CT from the previous business day and just before 10:00 am CT on the settlement day. The settlement window is the two (2) hour period of time where Members must satisfy any outstanding obligations resulting from their activity during the cycle.  

 

When are my trades considered “settled”? 

At the completion of the settlement window. 

 

When can I withdraw my funds? 

Members may request to withdraw available funds between the times of the current and next standard settlement cycles subject to the asset movement hours found in the link below. Available funds are the lesser of a Member’s asset balance at the time of the most current settlement cycle or the current balance at the time of the request. Withdrawals will be processed only after a Member has satisfied any and all outstanding obligations. 

 

https://www.cboedigital.com/about/hours-and-holidays/#clearing-services 

 

How are withdrawal requests handled around the settlement window? 

All withdrawal requests are placed in pending status awaiting final approval. Pending requests will be processed once Cboe Clear Digital has successfully collected and settled any outstanding obligations of Members. Once all obligations have been satisfied, any pending withdrawal requests will be processed. 

 

Can you provide scenario examples of how you would handle withdrawal requests? 

Day & Time Description Prior Cycle Current Cycle Current Balance
Monday
7am
Member deposits $100k BTC: 0
USD: $0
BTC: 0
USD: $0
BTC: 0
USD: $100k
Monday
10am-12pm
Monday Settlement Cycle BTC: 0
USD: $0
BTC: 0
USD: $100k
BTC: 0
USD: $100k
Monday
2pm
Member buys 1 BTC @ $40k BTC: 0
USD: $0
BTC: 0
USD: $100k
BTC: 1
USD: $60k
Tuesday
8am
Member wishes to withdraw $10k
  • - $60k is the lesser of Current Cycle and Current Balance
  • - $10k withdrawal request approved and processed
BTC: 0
USD: $0
BTC: 0
USD: $100k
BTC: 1
USD: $60k
Tuesday
10am
Tuesday Settlement Cycle Start BTC: 0
USD: $100k
BTC: 1
USD: $50k
BTC: 1
USD: $50k
Tuesday
11am
Member buys 1 BTC @ $40k BTC: 0
USD: $100k
BTC: 1
USD: $50k
BTC: 2
USD: $10k
Tuesday
11am
Member wishes to withdraw 2 BTC
  • - 1 BTC is the lesser of Current Cycle and Current Balance
  • - 1 BTC withdrawal request approved and processed
BTC: 0
USD: $100k
BTC: 1
USD: $50k
BTC: 2
USD: $10k
Tuesday
12pm
Tuesday Settlement Cycle End BTC: 0
USD: $100k
BTC: 1
USD: $50k
BTC: 1
USD: $10k
Tuesday
3pm
Member wishes to withdraw $10k
  • - $10k is the lesser of Current Cycle and Current Balance
  • - $10k withdrawal request approved and processed
BTC: 0
USD: $100k
BTC: 1
USD: $50k
BTC: 1
USD: $10k
Wednesday
10am-12pm
Wednesday Settlement Cycle BTC: 1
USD: $50k
BTC: 1
USD: $0
BTC: 1
USD: $0
Wednesday
10pm
Member wishes to withdraw 1 BTC
  • - Current Cycle and Current Balance are equal
  • - Request is submitted outside of asset movement hours and remains pending
BTC: 1
USD: $50k
BTC: 1
USD: $0
BTC: 1
USD: $0
Thursday
7am
Member’s 1 BTC withdrawal request is processed BTC: 1
USD: $50k
BTC: 1
USD: $0
BTC: 1
USD: $0
Thursday
10am-12pm
Thursday Settlement Cycle BTC: 1
USD: $0
BTC: 0
USD: $0
BTC: 0
USD: $0

*All times are in Central Time (CT) 

 

What happens if I request more than the amount available in the settlement snapshot? 

If a Member has submitted a request for an amount greater than what was available at the time of the snapshot, the request will be rejected. The Member must submit a request for an amount equal to or less than their asset balance at the time of the snapshot or the current balance at the time of the new request. 

 

What happens if I have no trading activity to settle? 

Members who have no trading activity in the current settlement cycle—i.e. the period after the previous cycle and before the current cycle—will have their withdrawal requests processed promptly during the asset movement hours found in the link below. 

 

https://www.cboedigital.com/about/hours-and-holidays/#clearing-services 

 

How do I request trading limits? 

Members should reach out to [email protected] to inquire about the requirements and application process to obtain trading limits. Only Members who qualify under the definition of an eligible contract participant (“ECP”) as defined by Section 1a(18) of the Commodity Exchange Act (“CEA”) may be eligible to apply for trading limits. 

Blockchain Confirmations

Cboe Digital requires the following number of blockchain confirmations before funds are available in the customers account.

Asset Type
Number of Confirmations
BTC
3
ETH
64
BCH
12
LTC
12
USDC
64

Asset Movement Hours

Cboe Digital offers same day movement of assets when the request is received between the following hours here. All other requests will be performed on a best effort or trade date plus one basis.

Codes

Product Cboe Digital Symbol Cboe Digital Clearing Code CFTC Code
Financially Settled Bitcoin Futures
FBT
FBT
FBT
Financially Settled Ether Futures
FET
FET
FET

Futures - Ownership Control Reporting

View Cboe Digital’s OCR processes here.