Amendments to the Clearing Conditions and the Auction Terms of Eurex Clearing AG

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 and the Auction Terms of Eurex Clearing AG regarding the following topics:
 
A. The Re-Use possibilities for GC Pooling Collateral Receivers should be extended by offering the option to pledge received GC Pooling collateral further to cover margin requirements in the non- cleared OTC Derivatives Market (Uncleared Margin Rules-UMR).
 
B. A description of the redemption process for Repo Transactions will be added to the Clearing Conditions of Eurex Clearing AG.

C. The penalty payment in case of a settlement failure after a successful buy-in auction shall be always in EUR, independent of the currency of the actual securities transaction.
 
Implementation date: 21 October 2024

2. Required action

No action is required for the participants.

3.  Details

A. GC Pooling Collateral Re-Use for Uncleared Margin Rules (UMR)

Today, GC Pooling Collateral Receivers can re-use their received collateral for pledges towards Eurex Clearing, Bundesbank or Banque Central du Luxembourg. In order to further enhance the collateral optimization opportunities, Clearing Members should be enabled to re-use their GC Pooling Collateral to cover margin requirements in the non-cleared OTC Derivatives Market (Uncleared Margin Rules). As for other GC Pooling Collateral re-use options, the collateral will remain siloed in Clearstream’s Triparty Collateral Management system Cmax. 

B. Redemption Process for Repo Transactions

Today, in case a bond matures during the lifecycle of a Repo Transaction, Eurex Clearing’s C7 SCS system performs an automated redemption. The pending delivery instruction will be manually cancelled and two new cash instructions will be instructed. The process should be reflected accordingly in the Clearing Conditions of Eurex Clearing.

In this context, the following section will be amended as outlined in Attachment 1:

• Chapter IV Number 2.7.1 of the Clearing Conditions of Eurex Clearing AG

C. Harmonization of currency for penalty payment on settlement failure after buy-in auction

In case of a settlement failure after a successful buy-in auction, the penalty payment shall be always charged in currency EUR, independent of the currency of the actual securities transaction.

In this context, the following section will be amended as outlined in Attachment 2:

• Number 10.3.1 of the Auction Terms of Eurex Clearing AG

The described changes will become effective as of 21 October 2024.

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:

Rules and Regs > Eurex Clearing Rules and Regulations > 1. Clearing Conditions

The amendments to the legal framework of Eurex Clearing AG published by this circular shall be deemed accepted by each affected contractual party of Eurex Clearing AG, unless the respective contractual party objects in writing to Eurex Clearing AG prior to the relevant effective date(s) as stipulated in this circular. In case of an objection by the respective contractual party pursuant the preceding sentence, Eurex Clearing AG is entitled to terminate the respective contract (including a Clearing Agreement, if applicable). Instead of submitting an objection, the respective contractual party may submit in writing to Eurex Clearing AG comments to any amendments of the legal framework of Eurex Clearing AG within the first 10 Business Days after the publication of the amendments. Eurex Clearing AG shall assess whether these comments prevent the published amendments from becoming effective taking into account the interests of Eurex Clearing AG and all contractual parties.

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. Chapter IV Number 2.7.1 of the Clearing Conditions of Eurex Clearing AG
2. Number 10.3.1 of the Auction Terms of Eurex Clearing AG

Further information