02 Jun 2021

Eurex Clearing

Extension of CCP Switch Incentive Program and introduction of Backloading Incentive

Eurex Clearing Circular 045/21 Extension of CCP Switch Incentive Program and introduction of Backloading Incentive


1.   Introduction

As part of the annual review for OTC Interest Rate Derivative Transactions, Eurex Clearing will introduce the following amendments with effect from 1 July 2021:

A.    Extension of the CCP Switch Incentive Program until 30 June 2022:

Under the prerequisites of the CCP Switch Incentive Program, Clearing Members and Disclosed Direct Clients receive a 100 percent discount on all regular booking fees on individually selected switch days for the following transactions:

  • OTC Interest Rate Swaps (IRS), 
  • Overnight Index Swaps (OIS) and 
  • Zero Coupon Inflation Swaps (ZCIS). 

Clearing Members may apply for a 5-day switch package whereas Disclosed Direct Clients may apply for a 10-day switch package. Registration for either switch package is free of charge. Clearing Members and Disclosed Direct Clients which have participated in a CCP switch incentive program in the past may register again for another CCP Switch Incentive Program under the terms laid out in this circular.

B.    Introduction of a Backloading Incentive from 1 July 2021 until 31 December 2021:

Eurex Clearing will introduce a Backloading Incentive for all Clearing Members and Disclosed Direct Clients which allows all clearing participants to receive

  • a 100 percent discount on all regular booking fees for backloading transactions from 1 July 2021 until 31 December 2021.

The offer applies to all OTC Interest Rate Derivatives products including Forward Rate Agreement (FRA), Interest Rate Swap (IRS), Overnight Index Swap (OIS) and Zero Coupon Inflation Swap (ZCIS) transactions across all eligible clearing currencies.

Registration for the Backloading Incentive is not required.

Start of the amended incentive programs: 1 July 2021

Learn more about Eurex topics! To help Clearing Members keep up with all Eurex updates, all support information is now available via Eurex Support and on the go via the personalized Eurex App.

2.   Required action

Registration for CCP Switch Incentive Program(s):

Clearing Members and Disclosed Clients (via their Clearing Member) may register for the relevant CCP Switch Incentive Program(s) by way of the attached application form. Please proceed with the following steps:

i.   Fill in the respective CCP Switch Incentive Program application form for Clearing Members or Disclosed Direct Clients, respectively.
ii.  The signed form is to be sent to your dedicated Key Account Manager in advance of the switch activity.
iii.  Nominate CCP Switch Dates as further outlined in the respective terms and conditions.

3.   Details

A. CCP Switch Incentive Program

a. Offer for Clearing Members:

  • The CCP Switch Incentive Program for Clearing Members is available for all Clearing Members including FCM Clearing Members and Basic Clearing Members (collectively referred to in the following as “Clearing Members”).
  • The program is free of charge and allows enrolled Clearing Members to switch OTC IRS, OIS and ZCIS own transactions (i.e. transactions on their house/P accounts) from another CCP to Eurex Clearing on five individually selected Business Days between 1 June 2021 and 30 June 2022. On these days, eligible transactions will receive a 100 percent discount on all regular booking fees. This offering is not limited in terms of notional volumes, number of trades or switch mechanisms.
  • Enrolled Clearing Members notify Eurex Clearing of individually selected switch days using the form provided under the following link: Online Form. 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 by way of the attached application form. 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 and shall be decisive.

b. Offer for Disclosed Clients:

  • The CCP Switch Incentive Program for Disclosed Clients is available for all Disclosed Direct Clients and FCM Clients (collectively referred to in the following as “Disclosed Clients”). 
  • The program allows enrolled Disclosed Clients to switch OTC IRS, OIS and ZCIS transactions from another CCP to Eurex Clearing on individually selected ten* Business Days between 1 June 2021 and 30 June 2022. On these days, eligible transactions will receive a 100 percent discount on all regular booking fees. This offering is not limited in terms of notional volumes, number of trades or switch mechanisms.
  • Enrolled Disclosed Clients notify Eurex Clearing of individually selected switch days via the Clearing Member using the form provided under the following link: Online Form. 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 through their Clearing Member(s) by way of the attached application form. 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/FCM Client Transactions apply and shall be decisive.

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

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.

B. Backloading Incentive

  • Eurex Clearing’s Backloading Incentive is available for all Clearing Members including FCM Clearing Members and Basic Clearing Members (collectively referred to in the following as “Clearing Members”) as well as for all Disclosed Direct Clients and FCM Clients (collectively referred to in the following as “Disclosed Clients”). The Backloading Incentive will apply from 1 July 2021 until 31 December 2021 and allows all Clearing Members and Disclosed Clients to clear OTC FRA, IRS, OIS and ZCIS backloading transactions at Eurex Clearing as set out below: 
  • Under the prerequisites of the Backloading Incentive, Clearing Members and Disclosed Clients receive a 100 percent discount on all regular booking fees for all OTC FRA, IRS, OIS and ZCIS which qualify as backloading transactions in accordance with Chapter VIII Part 2 Number 2.1.5.3 of the Clearing Conditions or Chapter II Part 2 Number 2.1.5.3 of the FCM Regulations of Eurex Clearing AG, as applicable. The offer applies to all clearing currencies and is not limited in terms of notional volumes or number of trades. 
  • Participation in the Backloading Incentive is free of charge and does not require a separate registration.

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 – Application for Participation in the CCP Switch Incentive Program for CLEARING MEMBERS
  • 2 – Application for Participation in the CCP Switch Incentive Program for DISCLOSED CLIENTS


Further information

Recipients:

All Clearing Members, Basic Clearing Members, Disclosed Direct Clients, all FCM Clearing Members of Eurex Clearing AG, vendors and other affected contractual parties

Target groups:

Front Office/Trading, Middle + Backoffice, IT/System Administration, Auditing/Security Coordination

Related circulars:

Eurex Clearing circulars 087/19, 055/20, 092/20

Contact:

client.services@eurex.com

Web:

CCP Switch

Authorised by:

Matthias Graulich