OTC Interest Rate Derivatives: Introduction of CCP Switch Incentive Program

1.   Introduction

In the context of an uncertain Brexit situation, Eurex Clearing aims to support the preparations of its Clearing Members and Disclosed Clients by offering a CCP Switch Incentive Program for OTC Interest Rate Derivatives (IRD) from 9 September 2019 until 31 December 2019. Under the prerequisites of the Incentive Program, Clearing Members and Disclosed Clients receive a 100 percent discount on all regular booking fees on individually selected switch days for OTC Interest Rate Swaps (IRS) and Overnight Index Swaps (OIS) transactions.

The CCP Switch Incentive Program is designed to support CCP switch activity to transfer existing OTC Interest Rate Swap (IRS) and Overnight Index Swap (OIS) portfolios at other CCPs to Eurex Clearing.

2. Required action

Clearing Members and Disclosed Clients (via their Clearing Member) may register for the CCP Switch Incentive Program by way of the attached application form. The signed form is to be sent to your Key Account Manager.

3. Details of the initiative

A. Offer for Clearing Members:

• The CCP Switch Incentive Program for Clearing Members is available for all Clearing Members (CM) including FCM Clearing Members (FCM) and Basic Clearing Members (BCM) (collectively referred to in the following as “Clearing Members”). The program allows enrolled Clearing Members to switch OTC IRS and OIS Own Transactions from another CCP to Eurex Clearing (i.e. transactions on its house/P accounts) on individually selected Business Days between 9 September 2019 and 31 December 2019 on special terms, as set out below.
• Clearing Members can choose between a three-day or a five-day switch package for EUR 15,000 or EUR 25,000, respectively. The CCP Switch Incentive Package allows enrolled Clearing Members to individually select three or five Business Days, respectively, and receive a 100 percent discount on all regular booking fees on these specific days. This offering is not limited in terms of notional volumes, number of trades or switch mechanisms.
• Enrolled clients notify Eurex Clearing of the individually selected switch day using a provided online form (https://www.eurexclearing.com/clearing-en/survey/ccp-switch-incentive-program). Selected switch days are to be notified at the latest by the end of the Business Day following the switch day.
• Interested Clearing Members may register for the CCP Switch Incentive Program for Clearing Members by way of the attached application form (Attachment 1). The completed application form is to be sent to your Key Account Manager.
• The General Terms and Conditions of the CCP Switch Incentive Program for Clearing Member Own Transactions apply.

B. Offer for Disclosed Clients:

• The CCP Switch Incentive Program for Disclosed Clients is available for all Disclosed Clients (DC) with System Access and Basic Disclosed Clients (DC) without System Access (collectively referred to in the following as “Disclosed Clients”). The program allows enrolled Disclosed Clients to switch OTC IRS and OIS transactions from another CCP to Eurex Clearing on individually selected Business Days between 9 September 2019 and 31 December 2019 on special terms, as set out below.
• Subject to submission of the application form, a Disclosed Client may apply for a three-day switch package* which is free of charge. The CCP Switch Incentive Package allows enrolled Disclosed Clients to individually select three Business Days and receive a 100 percent discount on all regular booking fees on these specific days. This offering is not limited in terms of notional volumes, number of trades or switch mechanisms.
• Enrolled Disclosed Clients notify Eurex Clearing of the individually selected switch day via the Clearing Member using a provided online form (https://www.eurexclearing.com/clearing-en/survey/ccp-switch-incentive-program). Selected switch days are to be notified at the latest by the end of the Business Day following the switch day.
• Interested Disclosed Clients may register for the CCP Switch Incentive Program for Disclosed Clients by way of the attached application form (Attachment 2). The completed application form is to be sent via the Clearing Member to the Key Account Manager. In order to enjoy the maximum benefit, it is recommended for Disclosed Direct Clients with multiple Clearing Members to register all relationships. The discount will only be applied to registered relationships.
• The General Terms and Conditions of the CCP Switch Incentive Program for own transactions of Disclosed Direct Clients apply.

^* Please note: Disclosed Clients must not apply for more than three switch days, also in case of a multiple clearing relationship setup.

4. Process – How to benefit

1.  Register for CCP Switch Incentive Program via attached application form in advance
2.  Switch from another CCP to Eurex Clearing
3.  Notify Eurex Clearing about switch via online form until the following business day
4.  Benefit from a discount of 100 percent on regular booking fees

Attachments:

• 1 – Application form for the Participation in the CCP Switch Incentive Program for Clearing Members with Terms and Conditions
• 2 – Application form for the Participation in the CCP Switch Incentive Program for Disclosed Direct Clients with Terms and Conditions
• 3 – Application form for the Participation in the CCP Switch Incentive Program for Disclosed Direct Clients with Terms and Conditions – Optional Flex Accounts Excel Sheet
• 4 – Overview of CCP Switch Incentive Program

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

Further information