Client Asset Protection under EMIR

Individual Segregated Account (ISA)

The model provides individual segregation without any contractual obligations of the client towards Eurex Clearing.

  • Individual segregation ensures that Disclosed Direct Clients have no risk of mutualisation with either the proprietary business of the Clearing Member or other clients of the Clearing Member. Disclosed Direct Clients have their own segregated position and collateral accounts at the CCP*. ISA also segregates excess collateral at the level of the CCP. 
  • Eurex Clearing does not determine detailed requirements for the client clearing documentation between the Clearing Member and the client.
  • ISA provides an option for Clearing Members to provide securities margin to Eurex Clearing by way of title transfer or by way of granting pledges. 
  • UK-based Clearing Members have the option to clear ISA Transactions in accordance with the rules of the Client Asset Sourcebook (CASS Rules) of the United Kingdom Financial Conduct Authority (FCA) when providing securities margin by way of pledge or providing cash as margin collateral only.

  • All Disclosed Direct Client types are eligible for ISA. For DCs with System Access or Basic DCs only Eurex Transactions, OTC Interest Rate Derivatives Transactions and OTC NDF Transactions are eligible for the clearing under the ISA Provisions. ISA CASS will not support the Clearing of OTC NDF Transactions.
  • The ISA client and the Clearing Member can agree on direct delivery and redelivery of margin assets in securities when opting for the delivery under a full title transfer arrangement.
  • Within an ISA arrangement the Clearing Member can request due to operational needs the establishment of sub-pools, e.g. for the separation of ETD and OTC IRS transactions or direct and indirect clients. In case of a Clearing Member default such sub-pools will be treated as one framework agreement.
  • The model provides the highest likelihood of porting. Should there be a Clearing Member default, the ISA client can choose to port immediately to a Replacement Clearing Member.
  • Alternatively, the ISA client can elect to close-out and directly receive their close-out proceeds and remaining collateral back.
  • Collateral management options ensure the model is operationally simple to manage at the CCP. 
  • In Eurex Clearing's view, based on the requirements stipulated by Art 305(2) CRR, the ISA model, entitles the client to calculate its own funds requirements with a risk weight of 2% (Art 306(1)(a) CRR). Any exposure arising from cash margin and Variation Margin and securities collateral provided via title transfer is considered in the netting arrangement. Pledged securities are not considered in the netting arrangement; pledged securities should generally be eligible for a 0% risk weight (Art 305(2), 306(2) CRR) on the basis that it is bankruptcy remote.

* The CM can optionally select for its ISA client a set-up of multiple transaction accounts in a single risk netting unit and calculate the initial margin requirements across multiple position accounts.