Eurex Clearing
1. Introduction
This circular contains information with respect to the service offering of Eurex Clearing AG (Eurex Clearing) and introduces amendments to the Clearing Conditions of Eurex Clearing AG (Clearing Conditions) – consultation, the Price List of Eurex Clearing AG (Price List) and the FCM Regulations of Eurex Clearing AG (FCM Regulations) regarding the following topics:
A. Access of the Trading Surveillance Office of Eurex Deutschland to the clearing system of Eurex Clearing
B. Adjustment of Repo Transaction Fees for ISA Direct Light License Holders
C. Introduction of a Service Fee for change of Netting Method
D. Default Management: Introduction of Residual Settlement for Default Management Hedging Auctions and further clarifications – Consultation
E. ISA Direct billing: Amendment to the ISA Direct Clearing Agreement
F. T2-T2S Consolidation: Amendments based on the new TARGET Guideline
G. Interest Rate Derivatives (IRD): Amendments in order to clarify clearing eligibility for Zero Coupon Inflation Swaps (ZCIS) and Polish Zloty (PLN)-denominated Interest Rate Derivatives
The amendments for topics A., B., C., E., F. and G. will become effective as of 3 April 2023.
The amendments for topic D. are subject to a consultation process (Consultation); the Consultation will end upon expiry of 27 March 2023 (Consultation Period). The planned effective date of these amendments is 1 May 2023, depending on the outcome of the Consultation which will be communicated in a separate Eurex Clearing circular.
2. Required action
Clearing Members, ISA Direct Clearing Members, Disclosed Direct Clients, FCM Clearing Members, vendors and other affected contractual parties should take the amendments to the Clearing Conditions and FCM Regulations into consideration.
The amendments to the Clearing Conditions with respect to topic D. are subject to a Consultation which will end with the expiry of 27 March 2023.
Eurex Clearing herewith invites all Affected Customers to submit comments on the proposed changes and amendments within the Consultation Period.
3. Details
A. Access of the Trading Surveillance Office of Eurex Deutschland to the clearing system of Eurex Clearing
The Management Board of Eurex Deutschland may set position limits for Eurex Transactions to ensure orderly trading. To appropriately monitor compliance with these position limits, the Trading Surveillance Office of Eurex Deutschland requires access to the position data of the Trading Participants held at Eurex Clearing.
To reflect these requirements, the following provisions will be amended as outlined in Attachment 1:
B. Adjustment of Repo Transaction Fees for ISA Direct Light License Holders
The Transaction fee for GC Pooling Select Invest Repo Transactions for ISA Direct Light License Holders will be adjusted to 0.0038% p.a. or Minimum Fee of EUR 15.00, CHF 17.00, GBP 14.00 or USD 17.00, respectively.
In this context, the following provisions will be amended as outlined in Attachment 2:
C. Introduction of a Service Fee for change of Netting Method
Today, if a Clearing Member requests a change in their Master Data, a Service Fee is charged for the operational effort and is reflected accordingly in the Price List.
With the migration of the Repo Market to C7 SCS, there is the possibility for Repo Clearing Members to change the applicable Netting Method from Dual Instruction Netting Method to Single Instruction Netting Method and vice versa.
Eurex Clearing will introduce a Service Fee for changing the Netting Method into the Price List amounting to EUR 100.00.
In this context, the Price List will be amended as outlined in Attachment 2:
D. Default Management: Introduction of Residual Settlement for Default Management Hedging Auctions and further clarifications - Consultation
Eurex Clearing proposes to introduce a Residual Settlement for Hedging Auctions in order to harmonize the process with the Default Management Liquidation Auction.
Mandatory Hedging Auction Participants, who did not provide valid Bids in a Hedging Auction, are subject to the juniorization of their Default Fund Contributions. The Residual Settlement process offers such Non-Bidding Hedging Auction Participants the opportunity to enter into a DM Hedging Transaction with Eurex Clearing at the highest accepted Hedging Auction price, thereby avoiding the juniorization of their Contributions to the Default Fund.
For Default Management Liquidation Auctions and Hedging Auctions, Eurex Clearing will offer residual units remaining after partially successful Hedging Auctions to each Non-Bidding Hedging Auction Participant on a pro-rata basis at the highest accepted Hedging Auction price. Due to the applicable rounding mechanism, Eurex Clearing may not be able to fill each accepted offer. The proposed amendments clarify that the Default Fund Contribution will not be juniorized as long as the offer is accepted by the relevant Non-Bidding Hedging Auction Participant.
Furthermore, Eurex Clearing proposes some minor changes with regard to the definition of Mandatory Auction Participants.
To reflect the amendments, the following provisions shall be amended as outlined in Attachments 3 and 4:
E. ISA Direct billing: Amendment to the ISA Direct Clearing Agreement
With respect to the ISA Direct offering, Eurex Clearing clarifies that the majority of the clearing-related fees are always debited from the cash account of the Clearing Agent, irrespective of whether an ISA Direct Clearing Member is using an own cash account. These ISA Direct-related fees are included in the Clearing Agent’s invoice.
The Clearing Agents are charged with
The ISA Direct Clearing Member will only be charged directly (via their own account, if relevant direct debit mandate is provided)
To reflect this, the following provision shall be amended as outlined in Attachment 6:
F. T2-T2S Consolidation: Amendments based on the new TARGET Guideline
Eurex Clearing intends to update the Clearing Conditions due to the T2-T2S Consolidation, taking into account the terminologies in the new TARGET Guideline of the ECB.
To reflect the changes, the following Chapters and Parts of the Clearing Conditions will be amended as outlined in Attachments 6 to 10:
G. Interest Rate Derivatives (IRD): Amendments in order to clarify clearing eligibility for Zero Coupon Inflation Swaps (ZCIS) and Polish Zloty (PLN)-denominated Interest Rate Derivatives
The amendments to the Clearing Conditions and FCM Regulations provide further clarifications that: (i) for OTC IRS U.S. Clearing Members, which may clear OTC Interest Rate Derivative Transactions for Own Accounts, clearing of ZCIS, however, is not offered; and (ii) for FCM Clearing Members, clearing of ZCIS and PLN-denominated IRD is not offered.
To implement these changes, the following provisions will be amended as outlined in Attachments 11 and 12:
Consultation with respect to the amendments to the Clearing Conditions
Pursuant to Chapter I Part 1 Number 17 of the Clearing Conditions, the proposed changes and amendments to the Clearing Conditions are subject to a Consultation which will end with the expiry of 27 March 2023.
Eurex Clearing herewith invites all Affected Customers to submit comments on the proposed changes and amendments within the Consultation Period.
During the Consultation Period, comments on proposed changes or amendments shall only be submitted through a web-based commenting service for which a registration form is available on the Eurex Clearing website under the following link:
Find > Forms: Consultation Form
The form has to be duly signed and returned to Eurex Clearing via e-mail to SpecialProvisions@eurex.com in order to obtain a User ID and Password together with a link for accessing the web-based commenting service.
To the extent that Eurex Clearing decides to implement any comments received during the Consultation, the so-amended version of the Clearing Conditions will be published after the Consultation.
The currently envisaged effective date of the changes to the Clearing Conditions is 1 May 2023. However, after the Consultation Period, Eurex Clearing will issue a separate circular to announce the concrete date on which the proposed changes (as the case may be, implementing comments received during the Consultation) will come into effect.
This announcement will be made with at least 15 Business Days’ notice (Regular Notification Period). However, if Eurex Clearing should receive a request for a Prolonged Notification Period from more than two Affected Customers during the Consultation Period, a Prolonged Notification Period as set out in the Clearing Conditions will be applied and Eurex Clearing will notify all affected parties accordingly.
Publication of amendments to the Clearing Conditions, the Price List, the FCM Default Rules and the FCM Regulations
As of the effective date, the full versions of the amended legal framework of Eurex Clearing will be available for download on the Eurex Clearing website www.eurex.com/ec-en under the following link:
Rules and Regulations > Eurex Clearing Rules and Regulations
The amendments to the legal framework of Eurex Clearing AG published by this circular are deemed accepted by each affected contractual party of Eurex Clearing AG, unless the respective contractual party objects by written notice to Eurex Clearing AG prior to the relevant effective date(s) as stipulated in this circular. In case of an objection by the respective contractual party pursuant the preceding sentence, Eurex Clearing AG is entitled to terminate the respective contract (including a Clearing Agreement, if applicable). Instead of submitting an objection, the respective contractual party may submit in writing to Eurex Clearing AG comments to any amendments of the legal framework of Eurex Clearing AG within the first 10 Business Days after the publication of the amendments. Eurex Clearing AG shall assess whether these comments prevent the published amendments from becoming effective taking into account the interests of Eurex Clearing AG and all contractual parties.
Unless the context requires otherwise, terms used and not otherwise defined in this circular shall have the meaning ascribed to them in the Clearing Conditions or FCM Clearing Conditions of Eurex Clearing AG, as applicable.
Attachments:
Updated sections of the following rules and regulations:
Further information
Recipients: | All Clearing Members, ISA Direct Clearing Members, Disclosed Direct Clients of Eurex Clearing AG, all FCM Clearing Members, vendors, and other affected contractual parties | |
Target groups: | Front Office/Trading, Middle + Back Office, IT/System Administration, Auditing/Security Coordination | |
Contact: | client.services@eurex.com | |
Web: | www.eurex.com/ec-en/ | |
Authorized by: | Jens Janka |
