Securities Clearing: Introduction of C7 Securities Clearing Service (C7 SCS) Release 3.7

1.   Introduction

With this circular, Eurex Clearing announces the production launch of optional Release 3.7 of “C7 Securities Clearing Service” (C7 SCS) on 2 September 2024.

With Eurex Clearing's C7 SCS Release 3.7, the following initiatives will be implemented:

• Eurex Clearing processing with regards to CSDR RTS Art. 19 amendments
• Enhancements to GC Pooling Re-Design
• Home Market Settlement (HMS) at ESES CSDs for Eurex physical deliveries in equities

Member simulation start:

• 1 July 2024 – Home Market Settlement simulation
• 15 July 2024 – common Member simulation for CSDR RTS Art. 19 amendments and GC Pooling Re-Design

Production start:

• 2 September 2024 – Eurex Clearing processing with regards to CSDR RTS Art. 19 amendments
• 16 September 2024 – Enhancements to GC Pooling Re-Design
• 23 September 2024 – Home Market Settlement for Eurex physical deliveries in equities 

Learn now more about C7 SCS Release 3.7 on our dedicated initiative page on the Eurex Clearing website www.eurex.com/ec-en/ under the following link: Support > Initiatives & Releases > C7 SCS Releases > C7 SCS Release 3.7. 

System documentation, circulars, timeline and much more information will be available there for you.

2.   Required action

A. Eurex Clearing processing with regards to CSDR RTS Art. 19 amendments

Clients will have to adapt their internal penalty processing according to regulatory requirements, especially with respect to Eurex Clearing’s decommission of its CSDR penalty reporting and penalty booking procedure, where the (I)CSD is responsible for CCP penalty booking. The new process will be analogue to penalty processing for non-cleared business.

B. Enhancements to GC Pooling processing

The improvements in processing with CmaX will increase overall settlement performance of the system and do not require any changes on Members’ side.

C. Home Market Settlement (HMS) for Eurex physical deliveries in equities

Clients willing to improve the settlement process for equities held at the ESES markets (Euroclear Belgium (CIK), Euroclear France (SIC) and Euroclear Nederland (NEC)) can opt for settlement of physical deliveries resulting from Eurex equity derivatives at the respective home market (I)CSD settlement account. For this purpose, the settlement account information has to be provided to Eurex Clearing and the Power of Attorney for the respective ESES settlement account needs to be in place at ESES. 

General:

Please check whether you have registered and/or updated your Release Contacts for C7 SCS via the Member Section of Deutsche Börse Group under tab “Company Contacts”.

In parallel, please subscribe to Eurex Clearing Circulars and Newsflashes on the Eurex Clearing website under the following link: Find > Circulars & Readiness Newsflashes Subscription. 

Any communication regarding C7 SCS will only be distributed via Eurex Clearing Circulars and Newsflashes.

3.   Details of the initiative

A.  With the planned CSDR RTS Art. 19 - (EU) 2023/1626, Eurex Clearing as CCP will no longer be involved in the regular monthly penalty booking process with its current Art. 19 obligation for a breakdown on Clearing Member level. Eurex Clearing will consequentially decommission the CSDR penalty booking and reporting processing with the new RTS enforcement on 2 September 2024:

• The monthly penalty billing and invoice process of (I)CSD calculated CSDR penalties on Clearing Member level.
• The billing-related report Monthly CSDR Penalties (CB226).
• The daily and monthly CSDR penalty Member reporting via reports Daily CSDR Penalties (CE840) and Monthly CSDR Penalties (CE845). 

Decommissioning timeline for the CSDR reports distributed by Eurex Clearing will be provided in the C7 SCS 3.7 Release Notes by end of February 2024.

B.  The changes implemented in processing between the C7 SCS system and CmaX will result in more efficient settlement processing for the multiple same-day GC Pooling trades in the same direction.

C.  With the Home Market Settlement (HMS) service, Eurex Clearing extends its range of supported settlement locations in C7 SCS for physically settled equity derivatives concluded at Eurex Exchange. This will enable clients to opt for settlement at Euroclear France, Euroclear Nederland and Euroclear Belgium.

The structural changes in Member settings in C7 SCS comprise the new settlement locations, the related settlement account identifier in T2S format, a new field for T2S Party BIC on settlement account level and HMS Settlement Account Settings. The “T2S Party BIC” is introduced as part of the Settlement Account data. It needs to be filled with the BIC11 of the settlement account holder at ESES for each settlement account related to one of the new ESES settlement locations, i.e. SIC, NEC, CIK.
 

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.

Attachment:

• C7 SCS Release 3.7 Member Communication Calendar

Further information