Clearing & Settlement
Below is a description on how NOREXECO trades are cleared through European Commodity Clearing (ECC), how daily and final settlement prices are determined, and how the NOREXECO Shanghai Final Index (NSFI) is administered under EU Benchmark Regulation.
Overview
How clearing and settlement works
NOREXECO trades are centrally cleared through ECC, with daily and final settlement prices published for every listed contract.
Central clearing
ECC acts as central counterparty, removing bilateral exposure and standardising margining and default management.
Daily settlement
Open positions are marked to market every trading day using published daily settlement prices.
Settlement indices
NFSI and NSFI determine final settlement for European and Shanghai-linked pulp contracts respectively.
Benchmark administration
NOREXECO is the Benchmark Administrator for NSFI under EU Benchmark Regulation.
Indirect trading member
Become a client of a Trading Member and get indirect access to the NOREXECO market
ECC
Clearing house partner
NFSI
European final settlement index
NSFI
Shanghai-linked final index
2021
NOREXECO Benchmark administrator approval
Clearing through ECC
Clearing NOREXECO traded contracts through European Commodity Clearing AG (ECC) denotes all activities from the time a commitment is made for a NOREXECO transaction until it is finally settled.
In general, a clearing house (Central Counter Party / CCP) acts as an intermediary between two trading entities. The clearing house post-trade takes on the counterparty risk against each of the two trading entities.
In trading of futures contracts, settlement is agreed for a future settlement date, creating counterparty/credit exposure and settlement risk. Clearing involves the management of post-trading, pre-settlement credit exposures to ensure that trades are settled in accordance with market rules, even if a buyer or seller should become insolvent prior to settlement.
• Risk margining
• Netting of trades to single positions
• Reporting and monitoring
• Failure and default handling
Banks clearing NOREXECO products at ECC
Trade members must maintain a clearing relationship with an ECC-approved clearing bank. The following institutions clear NOREXECO products at ECC:
• ABN Amro Clearing Bank N.V.
• Banco Santander S.A.
• Goldman Sachs International
• StoneX Financial Ltd
• Morgan Stanley & Co. International PLC
• Raiffeisenbank a.s
• Skandinaviska Enskilda Banken AB (publ)
Settlement and variation margin
All NOREXECO trades are centrally cleared by European Commodity Clearing AG (ECC), removing bilateral counterparty risk and providing standardised margining, settlement, and default management.
Daily settlement prices are published every trading day and used to mark all open positions to market. Variation margin and final settlement amounts are debited or credited via the participant’s clearing bank in line with ECC operating hours.
ECC operates a layered default waterfall (initial margin → default fund → clearing licence guarantee). Refer to ECC clearing conditions and the NOREXECO Rulebook for full details.
Settlement indices
NOREXECO Final Settlement Index (NFSI): For most pulp and recycled paper contracts, final settlement is based on the monthly NFSI — typically the arithmetic mean (two decimals rounded) of the relevant weekly industry indices included in the delivery month. NFSI is published at 11:00 CET on the last trading day.
NOREXECO Shanghai Final Index (NSFI): For Shanghai-linked contracts, final settlement is derived from the Final Delivery Settlement Price of the expiring monthly pulp contract at SHFE, with VAT deducted and conversion from RMB/MT to USD/MT. NOREXECO is the Benchmark Administrator for NSFI.
Benchmark Regulation
The EU 2016/1011 Benchmark Regulation requires that benchmarks used in the EU are managed by a Benchmark Administrator. NOREXECO was approved as a Benchmark Administrator by the Norwegian Financial Supervisory Authority on 30 March 2021.
NOREXECO is the Benchmark Administrator for the NOREXECO Shanghai Final Index (NSFI). The benchmark is based on the Final Delivery Settlement Price of the pulp contract traded at the Shanghai Futures Exchange (SHFE). SHFE publishes the Final Delivery Settlement Price in RMB/MT on the expiration day of each monthly contract.
NOREXECO calculates the NSFI by deducting the prevailing Chinese VAT and converting from RMB/MT to USD/MT.
Need contract dates or clearing onboarding?
Use the trading calendar for last trading days, or contact membership for ECC participant approvals and clearing bank setup.