FX Derivatives: Changes to CLS Settlement Provider, other amendments to the Clearing Conditions of Eurex Clearing AG

1.   Introduction

This circular contains information with respect to:

A.  Changes in the CLS Third Party BICs (Bank Identifier Codes) used for settlement of FX Futures contracts concluded at Eurex Exchange and associated testing requirements for Clearing Members;

B.  Amendments to the Clearing Conditions of Eurex Clearing AG (Clearing Conditions) in relation to emergency cases of unavailability of CLS infrastructure.

To implement the changes under B., amendments to the Clearing Conditions are required, as outlined in Attachment 2. These amendments and the production launch of the new CLS service provider will come into effect on 1 May 2021. 

Testing in production will be available from 1 May 2021 to 14 May 2021.

2.   Required action

Clearing Members will be required to update settlement BICs with the BIC change contained in Attachment 1. Changes can be made in advance of the testing window, but Clearing Members should be aware of potential monthly FX Futures settlements occurring in April 2021.

This change will affect current and onboarding of Clearing Members that clear FX Futures.

Clearing Members will be required to test the new BIC. The testing window will be open from 1 May 2021 until 14 May 2021. Please speak to your Clearing Key Account Manager to arrange a test to confirm the BIC change has been implemented.

3.   Details

A.  Changes in the CLS Third Party BICs (Bank Identifier Codes) used for settlement of FX Futures contracts concluded at Eurex Exchange and associated testing requirements for Clearing Members

Since the relaunch of the FX market in 2018, Eurex Clearing has offered clearing of FX Futures with settlement in Continuous Linked Settlement (CLS) Main Cycle. Eurex Clearing is planning to change its CLS service provider and as a result the Bank Identifier Code (BIC) used for CLS settlement need to be changed by Clearing Members. The new BICs will come into effect on 1 May 2021.

Clearing Members will be required to test the new BIC in Eurex Clearing’s production environment from 1 May until 14 May 2021. The test will replicate the settlement instruction matching process that was undertaken when joining the service. Please contact your Eurex Clearing Key Account Manager for testing during this period. 

The information given in the present circular overrides the information regarding BICs in Eurex Clearing circular 041/16. 

Please refer to Attachment 1 to this circular for the required BIC changes. 

B.  Amendments to the Clearing Conditions in relation to emergency cases of unavailability of CLS infrastructure

It will be clarified in the Clearing Conditions that Eurex Clearing may also switch from a CLS-based physical settlement to a bilateral physical settlement in the emergency case that Eurex Clearing’s CLS service provider is unavailable. 

To reflect the change, the following provision will be amended as outlined in Attachment 2:

• Chapter II Part 2 Number 2.18 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:

Clear > Rules & Regs > Rules and Regulations > Clearing Conditions

The 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 15 Business Days (or, in respect of amendments to the Price List, within the first 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.

Attachments:

• 1 – SWIFT message structure changes
• 2 – Amended sections of the Clearing Conditions

Further information