Amendments to the FCM Regulations of Eurex Clearing AG

1.    Introduction

This circular contains information with respect to Eurex Clearing's LSOC (Legally Segregated Operationally Commingled) service offering.

Under its LSOC clearing model, Eurex Clearing currently only accepts euro as currency for initial margin payments. Eurex Clearing now decided to also accept US dollar as initial margin. In order to set the legal basis, Chapter I of the FCM Regulations and the FCM Clearing Agreement of Eurex Clearing AG will be amended, as set out in the attachments.

The amended FCM Regulations and FCM Clearing Agreement will come into effect on 1 August 2019.

2.    Required actions

There are no required actions for the Participants. 

3.    Details 

The FCM Regulations and the FCM Clearing Agreement of Eurex Clearing AG will be amended as follows:

• Introduction of a right for Eurex Clearing to invest FCM Client Margin in the form of cash,
• Amendment of the existing trust arrangements with respect to cash accounts and introduction of a new trust arrangement with respect to the securities Eurex Clearing receives under the repo transactions resulting from the investment, and 
• Introduction of a possibility to repay cash collateral provided in a non-clearing currency, which is analogous to the permanent US dollar offering under the European framework (for details please see Eurex Clearing Circular 022/19). 

The acceptance of US dollar for initial margin payments is subject to operational readiness and implementation of an investment scheme applying CFTC Rule 1.25. Operational readiness and acceptance of US dollar as initial margin currency under the LSOC clearing model will be announced with a separate circular. In this context, it is planned to also extend the possibility for permanent cash holdings in US dollar to the LSOC model.

Unless the context requires otherwise, terms used and not otherwise defined in this circular shall have the meaning ascribed to them in the FCM Clearing Conditions of Eurex Clearing AG.

As of the effective date, the full version of the amended FCM Regulations will be available for download on the Eurex Clearing AG website www.eurexclearing.com under the following link:

Resources > Rules and Regulations > FCM Regulations

The changes and amendments to the legal framework of Eurex Clearing AG published by this circular are deemed accepted by each affected contractual party of Eurex Clearing AG, unless the respective contractual party objects by written notice to Eurex Clearing AG within the first ten (10) Business Days after publication. Any ordinary right of Eurex Clearing AG to terminate the respective contract (including a Clearing Agreement, if applicable) shall remain unaffected.

Attachments: 

• Attachment 1: Amended sections of Chapter I of the FCM Regulations
• Attachment 2: Amended sections of the FCM Clearing Agreement

Further information