Designated contract market and Reserves: Difference between pages

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(''US'').
''Accounting''.


Designated contract market (DCMs) are defined in Section 5 of the Commodity Exchange Act (CEA), as "boards of trade (or exchanges) that operate under the regulatory oversight of the Commodity Futures Trading Commission (CFTC)". DCMs are most like traditional futures exchanges, which may allow access to their facilities by all types of traders, including retail customers. They may list for trading futures or option contracts based on any underlying commodity, index or instrument.  
This represents the amount of money ‘owed’ to the owner (shareholder) of the company.


In a profitable and conservative company, reserves will normally comprise a significant balance of accumulated undistributed profits.


Under the [[Dodd-Frank]] legislation, DCMs are one of two types of "exchange" on which [[mandatory cleared swaps]] may be traded. The other type of exchange is a [[swap execution facility]] (SEF). The intention of the legislation is to move what were bilateral derivative contracts on to the two types of exchange that enable participants to execute or to trade swaps with other market participants - so called "many to many" functionality.


''Banking''.


Unlike SEFs, DCMs may trade with persons/legal entities with a net worth of less than USD 10m.
Deposits maintained by non-[[central bank]] [[monetary financial institution]]s with their central bank in the latter's capacity as "the bankers' bank". Central banks may require institutions to maintain minimum balances with the central bank, in which case balances in excess of the minimum are known as "excess reserves". Of course banks publish accounts and use the term in the accounting sense also - do not be confused by this.


[[Category:Financial_products_and_markets]]
 
== See also ==
* [[Interest on excess reserves]]
* [[Merger reserve]]
* [[Official reserves]]
* [[Reserve requirements]]
* [[Special drawing rights]]
* [[Trapped cash]]
 
[[Category:Long_term_funding]]

Revision as of 11:42, 20 May 2015

Accounting.

This represents the amount of money ‘owed’ to the owner (shareholder) of the company.

In a profitable and conservative company, reserves will normally comprise a significant balance of accumulated undistributed profits.


Banking.

Deposits maintained by non-central bank monetary financial institutions with their central bank in the latter's capacity as "the bankers' bank". Central banks may require institutions to maintain minimum balances with the central bank, in which case balances in excess of the minimum are known as "excess reserves". Of course banks publish accounts and use the term in the accounting sense also - do not be confused by this.


See also

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