Eurex Clearing, Eurex, Eurex Group
Eurex Clearing’s ISA Direct – a direct clearing membership for the buy side – gains traction: Swiss Life Asset Managers is the first buy-side client using the central counterparty’s ISA Direct service for OTC Interest Rate Derivatives with ABN AMRO acting as clearing agent. With this model, Eurex addresses changes in the regulatory landscape and contributes to the safety, robustness and efficiency of the overall market.
Eurex Clearing developed ISA Direct to support both the sell- and the buy side by addressing key concerns of the industry around the cost of clearing and the concentration of risk. Increased capital requirements for banks have resulted in higher client fees, wider spreads or even service reductions in the clearing space. In addition, risk concentration in client clearing remains a challenge for systemic stability in times of crisis.
Traditionally, buy-side firms have had an indirect connection to clearing houses, using clearing brokers as intermediaries. Within the ISA Direct framework, these intermediaries act as clearing agents who cover the default management obligations including the default fund contribution and optionally offer certain clearing services such as transaction, cash or collateral management. ISA Direct members face Eurex Clearing directly as counterpart for their positions whilst maintaining legal and beneficial ownership of any securities collateral provided.
Jan Grunow, Head of Operations at Swiss Life Asset Managers: “By being able to directly connect to Eurex Clearing, our concerns about credit risk and the portability of our assets are much better addressed. The ISA Direct model alleviates many of our concerns and helps us to meet the regulatory requirement of central clearing.”
ABN AMRO Clearing is a leading clearing provider with a proven track record of partnering with its clients and supporting innovative solutions. The lower balance sheet impact involved with the ISA Direct offering is perceived by ABN AMRO Clearing as a major advantage that allows to further expand its central clearing services to well established buy-side clients.
“We are delighted to partner with Swiss Life,” said Alexander Jacobs, Head of OTC Clearing at ABN AMRO Clearing. “We are committed to bringing innovative clearing services to our clients. The ISA Direct set up offers capital, operational and risk efficiencies for all parties including novel collateral management solutions."
The ISA Direct model is currently offered for Eurex Clearing’s interest rate swaps and repo transactions. Philip Simons, Eurex’s Head of Fixed Income, Funding & Financing Sales. “We welcome Swiss Life on board and thank ABN AMRO Clearing for its continued support. It confirms the value proposition of the ISA Direct model and we look forward to working with market participants to accelerate the adoption of this innovative service.”
About Eurex Clearing
Eurex Clearing is one of the leading central counterparties globally — assuring the safety and integrity of markets while providing innovation in risk management, clearing technology and client asset protection. Eurex Clearing serves about 200 Clearing Members in 20 countries, managing a collateral pool of EUR 56 billion and clearing trades valued at EUR 23 trillion (double counted) every month.
About Swiss Life Asset Managers
Swiss Life Asset Managers has more than 160 years of experience in managing the assets of the Swiss Life Group. This insurance background has exerted a key influence on the investment philosophy of Swiss Life Asset Managers, which is governed by such principles as value preservation, the generation of consistent and sustainable performance and a responsible approach to risks. That’s how we lay the groundwork for our clients to make solid, long-term plans – in self-determination and with financial confidence. Swiss Life Asset Managers offers this proven approach to third-party clients in Switzerland, France, Germany, Luxembourg and the UK.
As at 31 December 2018 assets under management for third-party clients amount to CHF 71.2 billion. Together with insurance mandates for the Swiss Life Group, total assets under management at Swiss Life Asset Managers stood at CHF 232.6 billion. Swiss Life Asset Managers is the leading real estate manager in Europe.1 Of the assets totaling CHF 232.6 billion, CHF 62.7 billion is invested in real estate. In addition, Swiss Life Asset Managers has real estate under administration of CHF 28.5 billion through its subsidiaries Livit, Corpus Sireo and BEOS. Total real estate under management and administration at the end of December 2018 thus came to CHF 91.2 billion. Swiss Life Asset Managers employs more than 1800 people in Europe.
About ABN AMRO Clearing
ABN AMRO Clearing is one of the world’s leading providers of clearing and financing services for listed derivatives and cash securities, OTC products, warrants, commodities and FX. With 11 offices globally employing more than 800 staff, ABN AMRO Clearing services clients on 160+ exchanges, MTFs and FX liquidity centres and consistently ranks as a top 3 clearer in most time zones. We consistently post over 20% market shares of transactions cleared on most relevant derivatives exchanges globally. ABN AMRO Clearing offers an integrated approach to global transaction processing, financial logistics and risk management and processes over 18 million trades per day.
1 PropertyEU, Top 100 Investors, December 2018