Eurex Clearing AG is pleased to announce the launch of the Clearing Service for Non-Deliverable Forwards (NDF) on 16 May 2022, following the regulatory approval for the offering of the NDF Clearing Service by the German Federal Financial Services Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin).
Simulation: available since 1 November 2021
Production start: available from 16 May 2022
2. Required action
In order to clear OTC NDF Transactions, Clearing Members are required to obtain a separate Clearing License for OTC Currency Products (OTC Currency Products Clearing License).
3. Details of the initiative
The NDF Clearing Service is introduced as response to increased market demand to include further OTC products, such as NDFs, into the standardized Clearing process to so that the Clearing members admitted to the NDF Clearing Service will benefit from the following advantages:
As of now, Eurex Clearing is offering the Clearing of following NDF currency pairs:
OTC NDF Transactions will be cash-settled in USD using the payment infrastructure of Eurex Clearing.
OTC NDF Transactions can be submitted to Eurex Clearing for clearing on Eurex Clearing business days from 08:00 until 22:00 Frankfurt time via one of the following Approved Trade Sources (ATS):
A key characteristic with respect to NDFs is the handling of disruption events. The applicable Clearing Conditions foresee provisions with respect to the following disruption events:
With respect to the fallback options applicable to each of the aforementioned disruption events, Eurex Clearing follows the market standards defined by Emerging Markets Traders Association INC. (EMTA) in the relevant EMTA Currency Templates or by International Swaps and Derivatives Association (ISDA) as defined in the 1998 ISDA Definitions (if applicable).
To promote the launch of the service, Eurex Clearing will waive all booking fees for the clearing of OTC NDF transactions until 30 September 2022.
NDF Clearing Service will be offered in Europe, including Switzerland and currently excluding the United Kingdom. Additionally, client clearing will be offered for the following jurisdictions: China (PRC), Singapore and South Korea.
Due to the regulatory restrictions caused by the Temporary Recognition Regime of the United Kingdom, Eurex is currently not able to offer NDF Clearing services in the United Kingdom until further notice.
More information about the NDF Clearing Service is available under the following link: Clear > Eurex NDF Clearing
Clearing Members may contact their Clearing Key Account Manager or send an e-mail to: firstname.lastname@example.org to address questions or to obtain further information about the NDF Clearing Service.
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.
All Clearing Members, Basic Clearing Members, Disclosed Direct Clients of Eurex Clearing AG and vendors
Front Office/Trading, Middle + Backoffice, IT/System Administration, Auditing/Security Coordination
Eurex Clearing Readiness Newsflash as of 20 September 2021
Clear > Eurex NDF Clearing