In case of the default of a Clearing Member and the occurence of a termination event with respect to such Clearing Member, Eurex Clearing primarily uses the financial resources provided by such defaulted Clearing Member (its margin collateral and its contribution to the Default Fund) to cover resulting losses.
If the defaulted Clearing Member’s resources are insufficient to cover all losses, Eurex Clearing’s own contribution to the default waterfall, the so-called Dedicated Amount, is applied.
If the dedicated amount is insufficient to cover all remaining losses, non-defaulted Clearing Members’ contributions to the Default Fund are utilized.
If the pre-funded contributions to the Default Fund are insufficient to cover all remaining losses, Clearing Members are required to provide Eurex Clearing with additional financial resources, the so-called Assessments. Simultaneously to Clearing Members providing assessments, Eurex Clearing provides additional financial resources as well, the so-called Further Dedicated Amount.
Finally, Eurex Clearing’s equity capital is applied to cover any remaining losses. In addition, Deutsche Börse AG has issued a letter of comfort in favour of Eurex Clearing, according to which Deutsche Börse AG will provide Eurex Clearing with financial funding to enable Eurex Clearing to comply with its obligations.