Liquidity Provisioning: Annual prolongation of schemes, changes in the General Supplement and quotation parameters for equity options

1.    Introduction

The Management Board of Eurex Deutschland and the Executive Boards of Eurex Frankfurt AG and Eurex Clearing AG took the following decisions:

With effect from 1 January 2020:

• Annual prolongation and amendment of Liquidity Provider schemes;
• Change of General Supplement to incorporate changes with regards to Eurex EnLight;

with effect from 6 January 2020:

• Change of size- and spread classes in selected equity options. 

These changes are reflected in the General Supplement (GS) and the Product Specific Supplements (PSS) to the Liquidity Provider Agreement which are attached to this circular.  

2.    Required action

Liquidity Providers should adapt their quotation behaviour accordingly.

3.    Details

3.1  Annual prolongation and amendment of Liquidity Provider schemes

A majority of Product Specific Supplements (PSS) to the Liquidity Provider Agreement will expire at the end of 2019 and therefore need to be prolonged, some of them with changed parameters. This also includes changes to the existing PSS "Equity 01", which does not expire at the end of 2019 (see section 3.3 of this circular). 

Table 1 in Attachment 1 lists all Product Specific Supplements that are subject to prolongation and/or change, effective as of 1 January 2020. All prolonged and/or changed PSS are also attached to this circular (Attachment 3). 

In the course of December 2019, the PSS will be made available as single PDF files on the Eurex website www.eurexchange.com under the following path:

Trading > Market-Making and Liquidity provisioning

3.2  Change of General Supplement with regards to Eurex EnLight

The following changes will be made with regards to Eurex EnLight, effective from 1 January 2020: 

• Doubling of maximum response time for Eurex EnLight RFQ requests (please see section 2.3.7 of the General Supplement to the Liquidity Provider Agreement for specific values). 

This increase in the response time will allow Eurex EnLight Liquidity Providers to improve the quality of their initial quotes.

• Prolongation of the alternative solution to pass the certification test as a pre-requisite for the fulfilment of the EnLight Building Block (see Eurex circular 039/19) to 31 March 2020. 

This prolongation recognises the implementation efforts of some vendors who are currently implementing Eurex EnLight connectivity into their systems. Some of these efforts will be finalised by the beginning of next year. In order to ensure continued Eurex EnLight activity from those Liquidity Providers that rely on these vendor solutions, a prolongation of the alternative solution is proposed. 

3.3  Change in size- and spread classes for selected equity options

With effect from 6 January 2020, changes will be made in the Liquidity Provider scheme for the equity options as specified in Table 2 of Attachment 1.

Attachments:

• Attachment 1 – Table 1: Overview of changed and/or prolonged PSS, Table 2: Change in size- and spread classes for selected equity options
• Attachment 2 – Changed General Supplement to the Liquidity Provider Agreement
• Attachment 3 – Changed/prolonged PSS to the Liquidity Provider Agreement

Further information