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Putting aside operational/reputational/business risks for a minute, a financial institution is concerned with the risk of losing money on their positions. What about an exchange ?

I can only think of the case where a multiple counterparties with huge exposures default simultaneously or close to each other totaling more than the clearing members can cover. What other risks (other than operational/reputational) might they face?

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One of the risks that an exchange (i.e. the clearing corporation associated with it) faces is 'last-trade' risk. When an order from a trading member hits an exchange, the exchange does not verify the trade against the trading member's remaining exposure limit before-hand. This is because it takes some time to cross-verify from the risk system, and since orders are stacked on 'price + time' priority basis, exchange wants to offer fast access to its client. This is, however, checked subsequently.

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    $\begingroup$ Hi Uditg_ucla, welcome to Quant.SE! $\endgroup$ – Bob Jansen Nov 24 '15 at 10:19
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Markets can disappear or go elsewhere. An example from Wikipedia: "LIFFE's most-traded product was a futures contract on Bunds, the 10-year German Government Bond. The DTB offered an identical product but, as an electronic exchange, it had a lower cost base. The progress of DTB can be gauged from the fact that in mid-1997 the DTB had less than 25% of the market. By October, it had more than 50%, and a couple of months later LIFFE was left with only 10%. The Bund represented about a third of LIFFE's business. The exchange, which had turned in a profit of £57m in 1997, reported a loss of £64m in 1998." Source: https://en.wikipedia.org/wiki/London_International_Financial_Futures_and_Options_Exchange

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