Our ISA Direct model combines elements of a direct clearing membership and the traditional service relationship in client clearing - tailored specifically for the buy side. It opens up a new principal client relationship between buy side clients and the CCP, with the regular Clearing Member acting as a Clearing Agent, providing a variety of mandatory and optional service functions.
Buyside clients who onboard under the ISA Direct model are called Basic Clearing Members (BCMs).
Who can become a Member
Insurance companies, financial institutions, pension funds, investment funds
What Jurisdictions are covered
You must be domiciled in the European Union or in Switzerland.
Supervised by the local competent authority, governmental ministry or governmental institution and be subject to local insurance or banking law, pension act or subject to local investment fund law respectively.
EurexOTC IRD Clear and Eurex Repo
Please find below the main requirements and general considerations you should make if you wish to pursue becoming an ISA Direct Member and apply for a Basic Clearing Membership - for Eurex OTC Clear and Eurex Repo. This section provides details on the application forms, regulatory and capital requirements and necessary collateral infrastructure.
Please note that BCMs can only conduct house business and as such only have P accounts.
The capital requirements for an ISA Direct Member is the maximum out of a minimum component and a dynamic component:
Eurex Repo: EUR 50 million
OTC IRD: EUR 7.5 million own funds
The total minimum requirement is aggregated over all clearing licences i.e. if applying for Repo and OTC it would be EUR 50 mn + EUR 7.5 mn = EUR 57.5 mn.
The dynamic requirement is represented by the maximum out of 20 percent of the average Initial Margin over the past 30 or 250 business days.
Please note that for funds capital requirements are based on their assets under management for which, in deviation of the above, a minimum of EUR 100 million is applicable.
The operational requirements depend on your agreement with your Clearing Agent.
The following requirements or business functions can be either fulfilled by the Basic Clearing Member (BCM) or the Clearing Agent:
The following requirements must be fulfilled by the ISA Direct Member and not the Clearing Agent:
Application for the Granting of a Basic Clearing Member Clearing Licence
This is the main application form, there will be additional forms to complete depending on the cash and securities accounts you want to set up.
Basic Clearing Member Clearing-Agreement
The BCM will also have to enter into the Basic Clearing Member Clearing-Agreement.
If using securities collateral, they will also have to enter into the pledge agreement for the ISA direct model.
Clearing Agent limitation notice
To confirm the operational set up you have agreed with your Clearing Agent, you and the Clearing Agent must sign the limitation notice