Eurex Clearing
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) and the Price List of Eurex Clearing AG (Price List) regarding the following topics:
The amendments under A. will become effective as of 4 January 2021, the amendments under B. will become effective as of 1 January 2021.
2. Required action
There is no required action for the Participants.
3. Details
A. Clarification of the exemption to maintain securities/cash settlement accounts for the clearing of Eurex Transactions
With regard to the clearing of Eurex Transactions, Eurex Clearing may now exempt a Clearing Member from the requirement to maintain a cash account corresponding to a securities account that is used in the context of physical delivery of Eurex Transactions, if it would be impossible or impracticable for the Clearing Member to maintain such a cash account. In particular, UK-based Clearing Members could benefit from this exemption as, after Brexit took place, they generally are not able to continue maintaining a Target2 account.
If an exemption is granted under this condition, the Clearing Member will be restricted in respect of Eurex Transactions with physical delivery to Eurex Transactions with quarterly expiry only, a monitoring of the Clearing Member’s positions will be applied and any physical delivery of Eurex Transactions of the respective Clearing Member will be processed via free-of-payment settlement instructions and under application of an additional manual settlement fee.
Exemptions under this provision can be requested via your Key Account Manager and will be granted by Executive Board of Eurex Clearing.
To reflect the changes, the following provisions will be amended as outlined in Attachments 1 and 2:
B. ISA Direct – Extension of Replacement Period
If a (insolvency) termination event occurs with respect to a Clearing Agent, the Replacement Period in which a related Basic Clearing Member may choose to continue clearing with a Replacement Clearing Agent, as a Direct Clearing Member or to terminate and close out the relevant transactions currently ends at 1 p.m. (Frankfurt am Main time) on the business day following the (insolvency) termination event (T+1).
To grant affected Basic Clearing Members sufficient time in particular to establish a relationship with a Replacement Clearing Agent and thus increase the likelihood of position porting, the Replacement Period for BCMs will be extended until 1 p.m. (Frankfurt am Main time) on the fifth business day following the (insolvency) termination event (T+5) for those Basic Clearing Members which have established their own account infrastructure (i.e. securities collateral account, cash collateral account and, if applicable, settlement account).
During the extended Replacement Period, the Basic Clearing Members will generally be allowed to trade and clear risk-minimising, i.e. they are allowed to enter trades that do not increase their margin requirements towards Eurex Clearing.
To reflect the change, the following provisions will be amended as outlined in Attachments 3 and 4:
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.
Attachments:
Further information
Recipients: | All Clearing Members, Basic Clearing Members, Disclosed Direct Clients of Eurex Clearing AG and vendors | |
Target groups: | Front Office/Trading, Middle + Back Office, IT/System Administration, Auditing/Security Coordination | |
Contact: | client.services@eurexclearing.com | |
Web: | www.eurex.com/ec-en/ | |
Authorised by: | Jens Janka |
