Clearing Accounts can be added to agreements in Docs throughout the entire agreement lifecycle. While an agreement is in Composition or Execution, any changes to the clearing account information requires all parties to the agreement to re-approve the workstream. On Executed and Terminated standard agreements, the clearing broker can add and expire accounts without triggering an amendment.
This article details managing accounts on an agreement by agreement basis, for information on how to manage Clearing Accounts from the Clearing Account library, please see our articles on the library.
Adding Accounts to a New Agreement
Any party to the agreement can add clearing accounts to an agreement when it is in Composition. There are three ways to add clearing accounts to the agreement
- Add from list of existing accounts. If another agreement exists between the clearing broker and customer/trader party to the agreement, Docs will show you a list of these previously used accounts. They can be added to the agreement by selecting the "+" sign on the account
- Add by selecting "Add New Account". If you need to add a single account, or a small number of accounts to the agreement and to reference data you can do so by selecting "Add New". This will allow you to add a new account. Note that you can modify all the information on the account once you hit save, EXCEPT for the Account Type. Once saved, the account type cannot be modified
- Add by uploading excel file. You can also add accounts to the agreement by uploading them in an Excel file. Within the clearing account workstream you will see an icon to download a template file for upload, and next to it an Upload icon. The Excel file will allow you to upload a large number of accounts at once.
NOTE: When uploading accounts using the Excel file, unless specified as an "FCM Processing Reference", the clearing accounts will upload with an account type of "Customer Clearing Account
Within the list of Available Clearing Accounts, any account that already appears on an agreement with the same agreement parties will be flagged by a warning icon. On hover over, a tooltip appears indicating on which agreement the account appears.
NOTE: Docs does not include preceding and following agreements when identifying potential duplicate agreement accounts.
Understanding Clearing Accounts on an Agreement
Whether in View mode or Edit mode, each clearing account contains the following data:
- Account ID: This corresponds to the account number
- Description: This free form text field can be used to add additional information to the account. Prior to the introduction of the Account Type field it was often used to specify if an account was a processing reference.
- Effective Date: This is the account effective date. It must fall within the effective period of the agreement itself. For more information, please review the article on Effective Dates.
- Expiration Date: This marks the end period of when the account is effective on the agreement in question. It must be after the account effective date, and, if left blank, will be populated automatically with the agreement termination date once one is set.
- Account Type: Two values are available here, "Customer Clearing Account" and "FCM Processing Reference". The system default is set to "Customer Clearing Account". You should use "FCM Processing Account" when adding accounts that are used for brokerage processing, or are otherwise non-customer references. For more information, please review the article on Clearing Account Best Practices.
Additionally, while in View Mode, each clearing account will also display when it was last modified and by whom. In this view, all columns in the clearing account grid can be expanded and can be sorted in descending or ascending order. The system will, by default, sort accounts by Account ID in descending order.
Managing Clearing Accounts on Executed Agreements
Once an agreement is Executed, the clearing broker can add and expire accounts from an agreement without initiating a new agreement version. The expiration date on an account can be updated as desired by the clearing broker, even if it has already been saved to the agreement. Additionally, the Description field can be updated. The one exception to this are LME agreements. On any agreement of the LME type, modifying the clearing accounts require all parties to sign off on the agreement again. As a result, any modification made of the clearing accounts will initiate an amendment to the agreement.
If any party other than the clearing broker modifies the clearing accounts in any way on an Executed standard agreement, an amendment will be initiated that all parties to the agreement will need to sign.
NOTE: If the clearing broker to the agreement deletes an account from the agreement this will also generate an amendment. To indicate that an account is no longer applicable on a specific agreement, it should therefore not be deleted, but rather expired by entering an account expiration date.