QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: We are subject to various market risks, including those caused by changes in interest rates, credit, foreign currency exchange rates and equity prices.
+Added: We are subject to various market risks, including those caused by changes in interest rates, credit and foreign currency exchange rates.
Interest Rate Risk
3 unchanged sentences
We did not have any variable-rate borrowings at December 31, 2020.
−Removed: At December 31, 2019 , we maintained $303.8 million of commercial paper.
−Removed: Commercial paper is considered a fixed rate borrowing;
−Removed: however, because maturities for commercial paper are generally less than 90 days, commercial paper is considered subject to interest rate fluctuations.
CME Clearing House
13 unchanged sentences
We also have in place various measures intended to enable us to cover any default and maintain liquidity.
−Removed: Despite our safeguards, we cannot assure you that these measures will be sufficient to protect us from a default or that we will not be materially and adversely affected in the event of a significant default.
+Added: Despite our safeguards, we cannot guarantee that these measures will be sufficient to protect us from a default or that we will not be materially and adversely affected in the event of a significant default.
We maintain two separate financial safeguard packages:
13 unchanged sentences
Performance bond collateral of a defaulting clearing firm may also be used to secure a draw on the line.
−Removed: In addition to the 364-day multi-currency
−Removed: line of credit, we also have the option to use our $2.4 billion multi-currency revolving senior credit facility to provide liquidity for our clearing house in the unlikely event of default.
+Added: In addition to the 364-day multi-currency line of credit, we also have the option to use our $2.4 billion multi-currency revolving senior credit facility to provide liquidity for our clearing house in the unlikely event of default.
At December 31, 2020, aggregate performance bond deposits for clearing firms for both financial safeguard packages was $211.9 billion including cash performance bond deposits, non-cash deposits, Interest Earnings Facility funds and letters of credit.
1 unchanged sentence
The following shows the available assets at December 31, 2020 in the event of a payment default by a clearing firm for the base financial safeguard package after first utilizing the defaulting firm's available assets:
−Removed: (in millions)
−Removed: Clearing House
+Added: (in millions) Clearing House
Available Assets
7 unchanged sentences
We could assess non-defaulting clearing members 275% of their existing guaranty fund requirements up to a maximum of 550% of their existing guaranty fund requirements as provided in the rules.
−Removed: Assessment powers are calculated to reflect the potential obligation that each clearing member could be called for in the event clearing member defaults exhaust the guaranty fund, however the total amount available would be reduced by the defaulted clearing members assessment obligations since they would no longer be able to satisfy their obligations.
+Added: Assessment powers are calculated to reflect the potential obligation that each clearing member could be called for in the event clearing member defaults exhaust the guaranty fund;
+Added: however, the total amount available would be reduced by the defaulted clearing members' assessment obligations since they would no longer be able to satisfy their obligations.
The following shows the available assets for the interest rate swap financial safeguard package at December 31, 2020 in the event of a payment default by a clearing firm that clears interest rate swap contracts, after first utilizing the defaulting firm's available assets:
−Removed: (in millions)
−Removed: Clearing House
+Added: (in millions) Clearing House
Available Assets
13 unchanged sentences
Transactions with clearing house members are typically confirmed and novated shortly after execution, at which point the clearing house assumes the risk of settlement.
−Removed: For transactions with counterparties that are not members of the third-party clearing house, settlement typically occurs on the day following execution and, prior to settlement, BrokerTec Americas is exposed to the risk of loss in the event a
−Removed: counterparty fails to meet its obligations.
+Added: For transactions with counterparties that are not members of the third-party clearing house, settlement typically occurs on the day following execution and, prior to settlement, BrokerTec Americas is exposed to the risk of loss in the event a counterparty fails to meet its obligations.
If that were to occur, BrokerTec Americas would have the right to cover or liquidate the open position but could incur a loss as a result of market movements.
3 unchanged sentences
Gains and losses on foreign currency transactions result primarily from cash, debt and other monetary assets, liabilities, revenues and expenses denominated in British pounds, euros and Japanese yen.
−Removed: Aggregate transaction gains (losses) for 2019 , 2018 and 2017 were $(7.2) million, $(73.6) million and $9.4 million, respectively.
+Added: Aggregate transaction losses for 2020, 2019 and 2018 were $9.3 million, $7.2 million and $73.6 million, respectively.
We expect the foreign currency gain/loss to continue to fluctuate as long as we continue to hold monetary assets and liabilities at those subsidiaries.
−Removed: On January 31, 2020, the United Kingdom (U.K.) formally withdrew from the European Union (EU) after a majority of voters in the U.K.
−Removed: approved an exit from the EU, commonly referred to as Brexit.
Brexit continues to generate economic and political uncertainty throughout the world, particularly throughout the U.K.
14 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.