Delivery Management Support

At Eurex Clearing, our comprehensive portfolio of transaction management tools includes seamless Delivery Management processes that include the physical delivery of securities. With efficiencies created from the netting process, through to cash management and failure handling, the physical delivery of securities is an integral component of the overall value chain of our transaction management offering. 

Netting Process 

We offer members settlement day netting that nets contractual deliveries with late deliveries. This results in increased settlement efficiency and a reduction of risk.

Failure Handling

  • Robust solutions for dealing with failure handling.
  • General contractual penalties are defined in the Clearing Conditions of Eurex Clearing AG.

FAQ

1. Which netting options are offered by Eurex Clearing?

The Basic Net Service

Our core service comprises the following key features:

  •     Processing of netted transaction on gross basis
  •     Support of PoA instruments

The Extended Net Service

In addition to the services offered under the Basic Net Service offering, the Extended Net Service offering allows the inclusion of trade date netted transactions into our regular actual settlement day netting thereby increasing netting efficiency.

The Full Service

Our Full Service offering, provides a variety of additional delivery management functionalities from which to choose

  • Default settings: setup requirements such as block/release, gross or net processing.
  •  Inquiry of transactions: different filters allow for the flexible inquiry of transactions.
  •  (Partial) block/(partial) release of transactions prevent or generate settlement instructions according to stock availability.
  •  Linking of transactions allows participants to design the setup of the settlement netting unit as sell and buy trades can be assigned to each other.
  •  Mark transactions for gross/net processing: the default of gross or net processing can be changed on single transaction basis.

Screenshot Clearing delivery Management (1)



 





  

 

For further details please also visit: Delivery Management.

2. How are failures handled on Frankfurt Stock Exchange?

  • General buy-in and cash settlement model is applied.
  • Penalties for late deliveries over dividend reference days (35.0 % on net dividend).
  • Late settlements over corporate actions may cause claims and disclosure of counterparts.
  • For equities that fall under the EU Short Selling Regulation daily fines for late deliveries will be charged from the first day of non-delivery onwards (0.2 bp of the undelivered equities’ value).

3. How are failures handled on Eurex Exchange?

Deliveries out of exercise/ assignment

  • General buy-in and cash settlement model is applied.
  • For equities that fall under the EU Short Selling Regulation daily fines for late deliveries will be charged from the first day of non-delivery onwards (0.2 bp of the undelivered equities’ value).

Deliveries out of notifications/allocation for bonds:

  • German government bonds:
    • ​​​​​​​​​​​​​​​​​​​​​​​​​​​​Additional charge of interest of delay (1 percent + ECB main refinancing rate on outstanding amount).
    • 0.04 percent fines on volume not delivered until 14:15 CET, or 0.40 percent fines on volume not delivered until the respective Settlement Cut-Off Time. Otherwise 0.40 percent fines on volume per subsequent calendar day.
  • Swiss government bonds:
    • 0.85 percent fines on nominal value.
    • Additional charge of interest of delay (1 percent + SNB main refinancing rate on outstanding amount).
  • Other bonds:
    • ​​​​​​​0.40 percent fines on volume not settled on the contractual settlement day per calendar day.
    • Additional charge of interest of delay (1 percent + ECB main refinancing rate on outstanding amount).

4. How are failures handled on the Repo Market?

Failure to Deliver by the delivery day of the Front-Leg
Eurex Clearing is entitled, or on request of the Clearing Member:

  • to set present business day as advanced repurchase date of the term leg.
  • to offset obligations and settle the repo rate amount only.

Failure to Deliver by the delivery day of the Term-Leg
Eurex Clearing is entitled, or on request of the Clearing Member:

  • to perform buy-in attempts according to the buy-in schedule applicable as from the fifth day following the delivery date of the term-leg.

Failure to Deliver by the delivery day of the Cash-Leg
Eurex Clearing will assume the Clearing Member’ default according to Chapter 1, Part 1(7) of the Clearing Conditions:

  • only if a technical default can be excluded.
  • consequently, the Clearing Member will be set on hold.
  • positions will be closed out and remaining obligations will be covered by the margin collateral.

5. How are failures handled for the GC Pooling Market?

Fines for Non-Delivery by the delivery day of the Front-Leg and Term-Leg:

  • 0.015 percent of failed value, but not less than EUR 1,500 per day.
  • if failed value exceeds EUR 100 Mio, contractual penalty is calculated based on the effective overnight interest rate applicable to the relevant clearing currency, but not less than EUR 15,000 per day.

6. How is the buy-in and cash settlement model applied?

  • Buy-in: Eurex Clearing has implemented an auction process where offers are made. The new buy-in seller replaces the original seller.
  • Cash settlement: In case certain buy-in attempts are unsuccessful, a cash settlement may be initiated. In this case the failed seller is debited and the buyer is credited with a cash settlement amount. Hence there is no delivery of securities performed.

7. What is the buy-in process for ISINs that do not fall under EU Short Selling Regulation?

Buy-in process for trades that are not under EU Short Selling Regulation:

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8. What is the Buy-in process for ISINs that fall under EU Short Selling Regulation?

Buy-in process for late trades under EU Short Selling Regulation

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Supportive documentation

  • Technical Manuals are available under CCP Release
    Please select the latest release version and go to system documentation. 


In case of any questions or your require further information, please contact our Securities Clearing team via ccp@eurex.com or +49 69 211-11940.