A member of
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), the Price List of Eurex Clearing AG (Price List), the Default Management Committee Rules (DM Committee Rules), the FCM Regulations of Eurex Clearing AG (FCM Regulations), the General Terms and Conditions to the Agreement on Technical Connection to the Clearing EDP of Eurex Clearing AG (GTC Connection Agreement) and the Statutes for the FIC Board Advisory Committee of Eurex Clearing regarding the following topics:
A. Clarification to Section G of the GTC Connection Agreement
B. Changes to the Clearing Conditions and Statutes for the FIC Board Advisory Committee corresponding to the Partnership Program 2022
C. Amendments to the Price List regarding:
i. Clarification that the clearing license admission fee is only charged once for Clearing Members,
ii. Increase of the notional outstanding included in the OTC Interest Rate Derivatives Basic Pack for IRS/OIS transactions,
iii. Clarification regarding application of termination fees for Multilateral Compression and Rate Blending for OTC Interest Rate Derivatives transactions
D. Deletion of transitionary provisions for €STR+8.5bp to €STR flat for EURO STOXX® 50 Total Return Futures
E. Termination of Clients based on provision in the Clearing Conditions and in the FCM Regulations
F. Amendments to the DM Committee Rules regarding the already existing concept of Market Advisors - Consultation
The amendments under F. are subject to a consultation process (Consultation); the Consultation will end with the expiry of 28 February 2022 (Consultation Period). The planned effective date of these amendments is 1 April 2022, depending on the outcome of the Consultation which will be communicated in a separate Eurex Clearing circular.
The amendments under A. to E. are not subject to a consultation process and will become effective as of 1 March 2022.
2. Required action
The amendments under F. are subject to a Consultation which will end with the expiry of 28 February 2022.
Eurex Clearing herewith invites all Affected Customers to submit comments on the proposed changes and amendments within the Consultation Period.
With regards to the topics under A. to E., there is no required action for the participants.
3. Details
A. Clarification to Section G of the GTC Connection Agreement
Section G of the GTC Connection Agreement is clarified to detail that, for clients covered by this section (in particular, DC Market Participants and Indirect Client Market Participants), obligations towards Eurex Clearing arise only once these clients actually order connectivity or access to network channels.
To reflect these amendments, the following provisions will be amended as outlined in Attachment 1:
B. Changes to the Clearing Conditions and Statutes for the FIC Board Advisory Committee corresponding to the Partnership Program 2022
Corresponding to the Partnership Program 2022 extending the responsibilities of the FIC Board Advisory Committee, the respective provision in the Clearing Conditions regarding the matters on which the FIC Board Advisory Committee may advise will be extended. Further, the Statutes for the FIC Board Advisory Committee will be amended to align them with the Partnership Program 2022 terms and to implement certain procedural simplifications, such as a new possibility for the FIC Committee to decide electronically or by circular procedure.
To reflect these amendments, the following provisions will be amended as outlined in Attachments 2 and 3:
C. Amendments to the Price List regarding:
i. Clarification that the clearing license admission fee is only charged once for Clearing Members
Number 1 (1) (a) of the Price List will be amended to clarify that the admission fee is only charged for the first clearing license obtained from Eurex Clearing by a Clearing Member and that any additional clearing licenses are granted free of charge. For the avoidance of doubt, the provisions regarding the admission fees for Basic Clearing Members and for the Specific Repo License for companies wishing to only act as net cash providers remain unaffected.
ii. Increase of the notional outstanding included in the OTC Interest Rate Derivatives Basic Pack for IRS/OIS transactions
Eurex Clearing already offers the OTC IRD Basic Pack rebate scheme that allows the clearing of IRS, OIS, Basis and FRA transactions which are proprietary transactions of a Clearing Member without extra booking fees and maintenance fees up to certain volume thresholds. This OTC IRD Basic Pack rebate scheme is set out in Number 10.4 of the Price List. Effective 1 March 2022, Eurex Clearing will increase the volume threshold for notional outstanding at the end of each month which is included in the OTC IRD Basic Pack regarding the clearing of IRS and OIS transactions without further maintenance fees from EUR 300 billion to EUR 500 billion.
Please note that Eurex Clearing has further introduced the OTC IRD BASIC Pack Special Offer which is open for bookings until 31 March 2022. This special offer includes even higher volume thresholds with respect to booking fees and maintenance fees and unlimited clearing of ZCIS and is also available for transactions of eligible Disclosed Clients. For more information on the OTC IRD Basic Pack Special Offer, please refer to Eurex Clearing Circular 114/21.
iii. Clarification regarding application of termination fees for Multilateral Compression and Rate Blending for OTC Interest Rate Derivatives transactions
Numbers 10.5.1 and 10.5.2 of the Price List will be amended to clarify that the termination fees for Rate Blending and Multilateral Compression as applicable for OTC Interest Rate Derivative Transactions are only based on the notional volume terminated.
To reflect the amendments described under i. - iii., the following provisions will be amended as outlined in Attachment 4:
D. Deletion of transitionary provisions for €STR+8.5bp to €STR flat for EURO STOXX® 50 Total Return Futures
On 16 September 2021, Eurex Exchange and Eurex Clearing announced amendments to their rulebooks in order to implement the transition of the reference Funding Rate of EURO STOXX® 50 Index Total Return Futures (TESX) from Euro Short-Term Rate (€STR) plus the EONIA transition spread as provided by the ECB (8.5 basis points) to €STR flat (for further information, see Eurex Circular 086/21 and Eurex Clearing Circular 083/21).
After the successful completion of this transition on 18 October 2021, Eurex Clearing will reverse the corresponding changes to the Clearing Conditions as these transitionary provisions are now inoperable.
To reflect these changes, the following provisions will be amended as outlined in Attachment 5:
E. Termination of Clients based on provision in the Clearing Conditions and in the FCM Regulations
Currently, the Clearing Conditions and FCM Regulations only foresee processes on how to handle client-related Transactions in case of the occurrence of a default or termination in the relationship between the Clearing Member and the relevant Disclosed Direct Client.
In order to provide clients, especially market participants, with a certain protection, a respective rule shall be included into the Clearing Conditions and the FCM Regulations, entitling the Clearing Member/FCM Clearing Member to terminate any client-related Standard Agreement/FCM Client Netting Set.
The termination will be effective after 30 days following the termination request provided that all transactions cleared under the respective client-related Standard Agreement/FCM Client Netting Set have been fully cancelled, closed or discharged prior to the termination.
To reflect these amendments, the following provisions will be amended as outlined in Attachments 6 and 7:
F. Amendments to the DM Committee Rules regarding the already existing concept of Market Advisors – Consultation
According to the current provisions under the DM Committee Rules, Eurex Clearing may consult Default Management Committees and nominated Market Advisors regarding the execution of the Default Management Process (DMP) after the occurrence of a termination with respect to a Clearing Member or FCM Clearing Member.
Eurex Clearing reviewed the framework and concluded to amend the setup. It is proposed that Market Advisors will be consulted on a regular basis (at least annually) regarding market developments and the design of the DMP rather than in case of a Clearing Member’s default event. The role of the Default Management Committees will remain unchanged.
To reflect the changes, the following provisions will be amended as outlined in Attachment 8:
Consultation with respect to the amendments to the DM Committee Rules (topic F.)
Pursuant to Chapter I Part 1 Number 17 of the Clearing Conditions, the proposed changes and amendments to the DM Committee Rules are subject to a Consultation which will end with the expiry of 28 February 2022.
Eurex Clearing herewith invites all Affected Customers to submit comments on the proposed changes and amendments within the Consultation Period.
During the Consultation Period, comments on proposed changes or amendments shall only be submitted through a web-based commenting service for which a registration form (“Consultation form”) is available on the Eurex Clearing website under the following link: Find > Forms.
The form has to be duly signed and returned to Eurex Clearing via e-mail to SpecialProvisions@eurex.com, in order to obtain a User ID and Password together with a link for accessing the web-based commenting service.
To the extent that Eurex Clearing decides to implement any comments received during the Consultation, the so-amended version of the Clearing Conditions will be published after the Consultation.
The currently envisaged effective date of the changes to the DM Committee Rules is 1 April 2022. However, after the Consultation Period, Eurex Clearing will issue a separate circular to announce the concrete date on which the proposed changes (as the case may be, implementing comments received during the Consultation) will come into effect.
This announcement will be made with at least 15 Business Days’ notice (Regular Notification Period). However, if Eurex Clearing should receive a request for a Prolonged Notification Period from more than two Affected Customers during the Consultation Period, a Prolonged Notification Period as set out in the Clearing Conditions will be applied and Eurex Clearing will notify all affected parties accordingly.
The amendments with regards to topics A. to E. will become effective on 1 March 2022. As of the effective date, the full versions of the amended legal framework of Eurex Clearing AG, as specified under items A. to E., will be available for download on the Eurex Clearing website www.eurex.com/ec-en under the following link:
Rules & Regs > Rules and Regulations
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, unless the respective contractual party objects by written notice to Eurex Clearing within the first ten (10) Business Days after publication. Any ordinary right of Eurex Clearing to terminate the respective contract (including the FCM 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:
Further information
Recipients: | All Clearing Members, Basic Clearing Members, Direct Client Market Participants/Indirect Client Market Participants, Disclosed Direct Clients, FCM Clearing Members, vendors and other affected contractual parties of Eurex Clearing AG | |
Target groups: | Front Office/Trading, Middle + Backoffice, IT/System Administration, Auditing/Security Coordination | |
Contact: | client.services@eurex.com | |
Web: | www.eurex.com/en-ec/ | |
Authorized by: | Jens Janka |