Forwards on Baskets -

global equity exposure made simple

This Solution Helps

  • Institutional Asset Managers
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Get tailored exposure to global equity markets with Forwards on Baskets.

Why Forwards on Baskets?

Now, you can create and maintain a tailored, global equity exposure with one single transaction, centrally cleared and exchange-traded in a single currency. Nasdaq’s Forwards on Baskets is a simpler and more efficient way to handle a global equity exposure.

Forwards on Baskets make it possible to gain equity exposures in the US, Europe, Asia including emerging markets – all in one single transaction and without any bilateral risk dependency - in a trading and clearing currency of your choice: SEK, USD or EUR.

Create our Own Customized Basket of Index Futures

Curate your customized baskets from a selection of highly liquid and well-known index futures.

Benefits over OTC Agreements

Exchange traded products have several advantages over OTC agreements with the same purpose:

  • No bilateral risk.
  • Better price efficiency.
  • No cost for ISDA agreements.
  • Complies to Basel 3 and EMIR regulations.
  • One single transaction in selected currency.

Reporting & Clearing

Forwards on Baskets are reported to Nasdaq Nordic under the Exchange Rules and are cleared through the Nasdaq Clearing.

Basket Expiration Price

When calculating the basket expiration price, the official final settlement price of each basket component is used.

If there is no final settlement price by the time the forward contract expires (as for 0#JTI: and 0#HSI:), then the daily settlement price is used. The basket expiration price is calculated in SEK, USD or EUR, as applicable for each basket.

Basket Request Procedure

Members can request listing of a forward contract on a new basket by submitting the Basket Request Form to Nasdaq.

The new forward contract will be listed and tradable within two business days. Please contact Nasdaq Product Management team to receive the relevant form.

Margining

Margins are calculated using the OMS II margining model.

The initial margin is equal to the sum of the Risk parameter for the basket and the spread adjustment factor (currently at 0.5%). The Risk parameter is calculated using historical prices of the underlyings, estimated number of lead days to close down positions in a default situation, and a pro-cyclicality buffer. The Risk parameters are reviewed monthly. See the Derivative Rules for more information (Margin parameters: Appendix 13).

Eligible Collateral & Position Limits

Allowed collateral includes for example cash, government bonds and Swedish shares. Position limits apply.

Allowed collateral includes for example cash, government bonds and Swedish shares. See the Derivative Rules for more information (Eligible collateral Appendix 14).

Position limits apply. Each basket request is evaluated based on the weight of the included components and the requesting member will be notified if the expected trade value exceeds the position limit.

Transaction Fees and Collateral Management Fees

Transaction fees are calculated as a percentage of the transaction. Standard collateral fees apply.

Transaction fees are charged as a percentage of the notional amount of the transaction (buy/sell) and closing at expiration. Standard collateral management fees apply. See the Derivative Rules for more information (Fee List: Appendix 3 and 3B).

Access to Market Segment

To access this market segment you need to be a trading and clearing member and submit the entry form for the SEK/USD/EUR World Index.

Trading and Clearing Members can gain access to the specific market segment by submitting the Entry form for segment SEK/USD/EUR World Index.

Key Benefits

Flexible

Create a tailored global equity exposure by composing you own basket of indices.

Secure

Avoid bilateral risk by using Nasdaq’s on-exchange listed forwards on baskets, with central clearing by Nasdaq Clearing.

Cost Efficient

One transaction is all you need to get the exposure you want. Use the currency of your choice: SEK, USD or EUR.

Related Information

Related Information

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