Enhanced Risk Solution

As a further development of our risk management features introduced with Eurex Release 11.0, Release 12.0 will launch a further optional interface (alongside the already available Enhanced Broadcast Solution and the Enhanced Transaction Solution) for risk management purposes. The name of this new interface is the Enhanced Risk Solution, which is a real-time risk data distribution service that Eurex plans to introduce in the March 2010.

With the introduction of Eurex Release 12.0, Eurex Clearing, the leading European clearing house will set another milestone in risk management. As of the new release, Eurex Clearing will be the only clearing house worldwide that provides its members with real-time risk data. All members will be able to inquire into their intraday, and where applicable, end-of-day risk data using a new FIXML-based connection over the new industry standard AMQP ("Advanced Message Queuing Protocol") transport.

The introduction of AMQP leads to synergies for members because it allows them to program to one accepted standard in the banking industry rather than to a variety of proprietary interfaces, which can lead to significant cost savings. It also fosters improved security as well as increased convenience and operational efficiency of the Eurex Clearing platform for market participants. AMQP is a specification for platform-neutral, open standards-based business messaging. The primary goal of AMQP is to enable the communications necessary for business processes. For more details concerning AMQP please click here.

Provision of real time data represents a real step forward because it allows members to monitor developments in risk as they happen. And quicker delivery of risk data promotes more proactive risk management, which protects the integrity of the markets as a whole - especially during volatile markets. It also enables very efficient use of collateral, and can provide indications of intra day margin calls as risk managers can monitor margin surpluses/ shortfalls in real time.

Eurex Clearing is also enhancing the granularity of the data that it will deliver to customers in real-time via the Enhanced Risk Solution interface. Risk data will provide info on Margin Class level, while position data will include the series level. This position data represents a change from the previous situation, when series level information was available but only in batches. The position report down to series level was available before, but only in batches. In addition to margin and position data, the Enhanced Risk Solution also includes a variety of data including margin parameters and margin consumption, among others.

For all members types, including NCMs, that already have developed in-house risk management systems, the new Enhanced Risk Solution will give members an important additional tool with which they can double check their own risk calculations. Since the Enhanced Risk Solution will now provide position and risk data, members will no longer need to use the drop-copy in conjunction with real time transaction data that many currently use. Since inquiries are possible, members will always have access to production parameters. This stands in contrast to current practice, where members are required to download a file in order to access new data - which is often problematic as members may not always know when data has changed.

One of the highlights of Eurex's newest optional interface is that the Enhanced Risk Solution gives customers the option of integrating risk management data with Eurex's emergency Stop [trading] Button as well as multiple pre-trade risk tools e.g. order and position limits. Eurex's approach has been to give members additional risk tools that build on each other with each new release we roll out. The overall goal is to provide members with a complete set of cutting edge tools that help them control their own and their clients risk to the maximum extent possible.