Amendments to the Clearing Conditions of Eurex Clearing AG

1. Introduction

This circular contains information with respect to the service offering of Eurex Clearing AG (Eurex Clearing) and introduces amendments to the Clearing Conditions of Eurex Clearing AG (Clearing Conditions) regarding the following topics:

The amendments will become effective as of 30 November 2020.

2.    Required action

Clearing Members, Basic Clearing Members and Disclosed Direct Clients of Eurex Clearing AG should take the amendments to the Clearing Conditions into account.

Clearing Members who want to use the new Internal Buffer Margin Account offering as outlined under item 3. A. are asked to contact their client service contact persons to request the set-up of the Internal Buffer Account(s) and the corresponding Internal Buffer Margin Suspense Account(s). 

3. Details of the initiative

A.  Introduction of an optional Internal Buffer Margin Account

The Internal Buffer Margin Account offering is set up to reduce the number of intraday margin calls (thus reducing operational efforts for the Clearing Members) and to enable Clearing Members to use cash posted to Eurex Clearing more efficiently to cover multiple (subsequent) margin shortfalls in respect to different internal margin accounts throughout a day.

Clearing Members can request the establishment of one or more Internal Buffer Margin Account(s) and corresponding Internal Buffer Margin Suspense Account(s) to provide cash collateral, which can be used to cover intraday shortfalls in internal margin account(s) that are linked to an Internal Buffer Margin Account to reduce the need of intraday margin calls.

Clearing Members can provide cash collateral in CHF, EUR, GBP and USD (permanent cash holding) to an Internal Buffer Margin Account. Any such cash will be treated as Buffer Margin which has the same security purpose as Proprietary Margin.

In case of a margin shortfall in respect to the internal margin account that is linked to an Internal Buffer Margin Account, Eurex Clearing transfers a cash amount from the Internal Buffer Margin Account to the linked internal margin account to cover the shortfall.

During the day, Eurex Clearing monitors the internal margin account(s) linked to an Internal Buffer Margin Account and automatically retransfers any cash collateral so provided from the Internal Buffer Margin Account back to the respective Internal Buffer Margin Account, if the internal margin account is overcollateralized.

Shortly before the end of day process, remaining cash collateral on an internal margin account linked to an Internal Buffer Margin Account that stems from the Internal Buffer Margin Account is transferred to the Internal Buffer Margin Suspense Account. If the end of day margin call is successfully carried out, any such cash on the Internal Buffer Margin Suspense Account will be transferred to the Internal Buffer Margin Account. If the end of day margin call fails, any cash on the Internal Buffer Margin Suspense Account will be retransferred to the respective internal margin accounts.

For further technical details, please refer to the Eurex Clearing Readiness Newsflash published on 29 July 2020: C7 Release 6.1 update: Introduction of an excess collateral pool

To reflect the changes, in particular the following provisions will be amended as outlined in the Attachment: 

• Chapter I Part 2 Subpart A Number 3 and 4.2, 4.3, 4.4, 4.5, 4.6, Part 4 Number 3.3, 6.2 of the Clearing Conditions 

B. Direct Return of Excess Collateral and Unallocated Redelivery Claims to a Disclosed Direct Client under certain conditions

Further amendments are introduced to the Clearing Conditions to clarify that Excess Collateral and Unallocated Redelivery Claims assigned to an Internal Margin Account relating to a single Direct Disclosed Client may under specific circumstances following the default of its Clearing Member be returned to such Direct Disclosed Client directly. 

To reflect the changes, the following provisions will be amended as outlined in the Attachment: 

• Chapter I Part 2 Subpart C Number 9.4 of the Clearing Conditions

C. Further minor amendments

Further minor amendments will be introduced as outlined in the Attachment. In particular, the provisions on the declaration and the effectiveness of a set-off are clarified.

To reflect the changes, in particular the following provisions will be amended as outlined in the Attachment: 

• Chapter I Part 1 Number 1.3 of the Clearing Conditions

As of the effective date, the full version of the amended Clearing Conditions will be available for download on the Eurex Clearing website www.eurex.com/ec-en under the following link: 

Rules & Regs > Rules and Regulations > Clearing Conditions

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.

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.

Attachment:

• Amended sections of Chapter I to the Clearing Conditions

Further information