Clearing Membership types

Eurex Clearing offers three types of clearing membership:

Direct Clearing Membership (DCMs)
DCMs can clear their own business and those of affiliated DC Market Participants. They may also clear for any undisclosed clients and/or DCs.

OTC and Securities Lending DCMs may only clear proprietary business.

General Clearing Membership (GCMs)
GCMs may clear their own business and those of all clients.

FCM Clearing Membership
For clearing of Swap Transactions through Eurex Clearing AG, FCM (Futures Commission Merchant) Clearing Members act as agents on behalf of their FCM Clients (U.S. persons and non-U.S. persons) and, if applicable, for their own account.

Markets overview

The Clearing Member should apply for the clearing licences dependent on the products or markets in which they would like to be active. We offer licences to the following markets:

  • Eurex Derivatives
  • Eurex OTC IRD Clear
  • Eurex OTC Currency Products 
  • Deutsche Börse Cash Market
  • Eurex Repo
  • Securities Lending

Admission requirements

Admission requirements

Below is a list of the main requirements and general considerations you should be aware of if you wish to pursue a clearing membership for Eurex Derivatives, Eurex OTC Clear, Eurex Repo, Securities Lending and Deutsche Börse Cash Markets. This section provides details on the application form, regulatory and capital requirements and necessary collateral infrastructure.

Documentation requirements

The main application form is the "Application for the Granting of a Clearing Licence of Eurex Clearing AG", there will be additional forms to complete depending on the cash, securities and settlement accounts you wish to set up.

In terms of legal agreements, there are three main agreements a CM will enter into:

  • Clearing agreement
    This forms the legal basis of the relationships and obligations of the CM and Eurex Clearing.
  • Pledge agreement
    This is only used if the CM is pledging securities in order to meet margin requirement. It is essentially to ensure the enforceability of a pledge in a default situation. One pledge agreement covers all securities accounts.
  • Securities trust agreement
    This is only used if a CM would like to offer their clients our ISA model, using securities collateral. It is only applicable to some jurisdictions. It was created to ensure that Eurex Clearing's rules and conditions (created under a German legal framework) in a default situation are enforceable under the local jurisdiction’s insolvency laws.

    It just needs to be executed once, creating an aggregated security trustee claim to cover all past and future securities deposits under the ISA.

We will also need to carry out know your customer checks. Eurex Clearing is able to collect most of the evidences needed for these checks independently. If you are located in the EAA then usually customers will just need to provide a sanctions compliance form and an up to date signatory list.


Know your Customer (KYC) documentation

We will also need to carry out know your customer (KYC) checks. Eurex Clearing is able to collect  part of the evidences needed for these checks independently.

In order to simplify the KYC review for multiple business relations with Group Deutsche Börse (GDB) entities, we recommend submitting the “Letter of Consent”. The Letter of Consent enables entities of Deutsche Börse Group to share KYC documents between group entities. This decreases the administrative burdens for our customers – e.g. a DC Market Participant of Eurex Clearing and a Eurex Trading Member will only have to provide the KYC documents once to Eurex Clearing AG rather than sending the documentation twice.

In terms of legal agreements, there are three main agreements a CM will enter into:

  • Clearing agreement
    This forms the legal basis of the relationships and obligations of the CM and Eurex Clearing.
  • Pledge agreement
    This is only used if the CM is pledging securities in order to meet margin requirement. It is essentially to ensure the enforceability of a pledge in a default situation. One pledge agreement covers all securities accounts.
  • Securities trust agreement
    This is only used if a CM would like to offer their clients our ISA model, using securities collateral. It is only applicable to some jurisdictions. It was created to ensure that Eurex Clearing's rules and conditions (created under a German legal framework) in a default situation are enforceable under the local jurisdiction’s insolvency laws.

    It just needs to be executed once, creating an aggregated security trustee claim to cover all past and future securities deposits under the ISA.

We will also need to carry out know your customer checks. Eurex Clearing is able to collect most of the evidences needed for these checks independently. If you are located in the EAA then usually customers will just need to provide a sanctions compliance form and an up to date signatory list.


Default management commitments

The corner stone of a Clearing House's integrity is the ability to manage the default of its members. Eurex Clearing has put in place a robust default management procedure to deal with such market events. We have a dedicated section of our website if you wish to learn more about our default management procedures, however there are three responsibilities that you will have to meet if you want to become a Clearing Member.

Default Fund (DF)
Eurex Clearing requests all members to contribute to the default fund. Unlike other CCPs, this can be provided in cash (GBP, CHF or EUR) and/or securities.

DF contributions are provided to Eurex Clearing when a CM applies for their first licence. No extra contributions are required when applying for additional licences. However it should be noted that due to the dynamic component of the DF calculation, a higher margin requirement due to increased volumes usually results in a request for further contributions.

Risk Operations review the figure at the end of every month and if necessary the CM will be asked to increase their contribution.

The Default fund requirement is determined by the highest single amount of the following components:

  • Default fund minimum requirement as mentioned in below table, or
  • 7 percent of the 30-day initial margin requirement average, or
  • 7 percent of the 250-day initial margin requirement average.

DCM

GCM/FCM

OTC IRD DCM

EUR 1 million

EUR 5 million

100K for Investment Funds, Insurance Pools,
and Pension Funds wishing to become a OTC IRD DCM


DMP coordinator
Members are required to nominate a DMP coordinator. The DMP coordinator is contacted by Eurex Clearing in the case of a default situation. It is the responsibility of the DMP coordinator to distribute all DMP-related information to the relevant persons within their organization.


Participation in Auctions
Clearing Members also have mandatory bidding obligations in the event of default auction. Please see the relevant section of the website for more information on these obligations.


Regulatory requirements

Confirmation from the relevant supervisory authority that the company is supervised and that this licence covers the provision of credit to customers in relation to transactions and the receipt of collateral in the form of cash or securities. There are additional regulatory evidences you have to provide if the application is coming from a branch located in certain jurisdictions.


Capital requirements

Eurex Clearing requires proof of the applicant's capital adequacy. Proof is provided by scanned copy of the return the CM would usually provide to its regulator, so providing evidence is a straightforward process.

The capital requirement of Eurex Clearing depends on the market. Capital requirements are additive, for example if the applicant applies for Eurex and OTC IRD GCM clearing licence they must provide proof of EUR 30 mn + EUR 30 mn = EUR 60 mn.

The highest of the below

  • 20 percent of the 30-day average of the initial margin requirements or
  • 20 percent of the 250-day average of the initial margin requirements or the
  • minimum capital requirements as below table


Eurex Exchange

EurexOTC IRD Clear

Eurex OTC Currency Product Clear

Cash market

Securities Lending***

Repo**

DCM

7.5

7.5

7.5

3.75

50

50

GCM/FCM*

30

30

30

15

200

200

* For FCMs, only EurexOTC Clear

** Specific Repo: n/a

*** Specific Lender License Holder: n/a


Operational requirements

Clearing Members are required to have the following collateral infrastructure.

  • GBP, CHF or EUR* cash account for margin settlement
  • A USD cash account for late margin calls (this is not mandatory but highly recommended)
  • If trading certain Eurex or Xetra products, securities settlement accounts are needed. This account can be owned by the CM or in the name of a third party. Please visit our delivery management section of the website for more information.
  • Members will also require technical connectivity to the relevant GUIs and reports/messages. They will have a dedicated technical key account manager to help them with the set up.

More information on accepted payment banks

Transaction reporting

Find out more about transaction reporting under EMIR and using Deutsche Börse’s REGIS-TR as trade repository.

* For FCM, only EUR


Qualified Clearing staff (QCS)

As we strive to maintain high qualification levels of clearing firms for reasons of clearing house integrity, it is required to register at least one "Qualified Clearing Staff" (QCS) in the back-office with Eurex Clearing.
The Clearing Member has the following possibilities to provide proof of the qualification of the staff member that shall be in QCS:

  • The Compliance Officer of the Clearing Member confirms the respective knowledge of the staff member, or
  • The staff member has passed the Clearer Test (Basic Module), or
  • The staff member has passed the exam for the Certified Clearing Specialist, or
  • The staff member has attended the Core Clearing Knowledge seminar.

All tests, exams and seminars are offered by Deutsche Börse Capital Markets Academy.

If the Clearing Member is outsourcing its clearing, back office or risk management functions to an Insourcer, either the Clearing Member or the Insourcer has to have a QCS.Technical requirements

A technical connection to the clearing system of Eurex Clearing is a prerequisite for the granting of  a  clearing  license.  Members are required  to  have  this  in  order  to  perform e.g. collateral  management, positions management and to receive  reports  via  the  Common  Report Engine.
 

Market specific admission requirements

  • Access to KOSPI after-hours market
    The KRX KOSPI Options are one of the most liquid derivatives in the world. Eurex KOSPI products provide market participants
    with more trading and hedging opportunities of the Korean index during the core European and US time zones
  • Attractive and liquid market
    More than 254 million Eurex KOSPI Options contracts traded since inception and a 145% increase in Mini-KOSPI 200 
    Futures trading volume (Q1 vs. Q2 2020)
  • Fully fungible products
    Eurex KOSPI products are fully fungible with the corresponding contracts at KRX
  • Exchange-traded benefits
    Important exchange-based trading, clearing and risk management functionalities help to 
    reduce counterparty risks and increase margin efficiencies