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Amendments to the Clearing Conditions of Eurex Clearing AG regarding Eurex Clearing's access framework

Release date: 09 Jul 2019 | Eurex Clearing

No. 070/2019 Amendments to the Clearing Conditions of Eurex Clearing AG regarding Eurex Clearing's access framework

Eurex Clearing Circular 070/2019

1.  Introduction

This circular contains information with respect to the service offering of Eurex Clearing and introduces amendments to the Clearing Conditions of Eurex Clearing AG (Clearing Conditions) regarding the following topics:

A. Admission of affiliated Direct Clients qualifying as U.S. Persons for the Clearing of OTC Interest Rate Derivative Transactions through a non-U.S. Clearing Member;

B. Enhancement of Multiple Clearing Relationships for Eurex DC Market Participants.

The amendments above will become effective as of 1 August 2019.

2.    Required actions

There are no required actions for the Participants.

3.    Details of the initiative

A. Admission of affiliated U.S. Persons for the Clearing of OTC Interest Rate Derivative Transactions via a non-U.S. Clearing Member 

As of today, Eurex Clearing does not allow the Clearing of OTC Interest Rate Derivative Transactions for Direct Clients under the Clearing Conditions if the relevant Direct Client qualifies as U.S. Person. Such OTC Interest Rate Derivative Transactions are supposed to be cleared under Eurex Clearing's LSOC framework (the FCM Regulations). 

With the attached amendments, Eurex Clearing intends to change the Clearing Conditions to allow non-U.S. Clearing Members to clear OTC Interest Rate Derivative Transactions under the Clearing Conditions for Direct Clients qualifying as U.S. Persons, provided that such Direct Client is an affiliate of the non-U.S. Clearing Member. The reason for this service extension is that OTC Interest Rate Derivative Transactions cleared for affiliates qualify as proprietary business of the relevant Clearing Member pursuant to CFTC Rule 1.3. 

To implement the amendments, the following provisions will be amended as outlined in Attachment 1:

  • Chapter I Part 1 Number 1.8.1 of the Clearing Conditions 

B. Enhancement of the maximum number of Clearing Members acting for one Eurex DC Market Participant

In light of Brexit, Eurex Clearing is enhancing the flexibility for DC Market Participants and Indirect Client Market Participants by increasing the maximum number of Clearing Members accepted by Eurex Clearing per participant for the clearing of Eurex transactions.

The current limit of three Clearing Members (CMs) per Eurex Market Participant will be enhanced to five CMs per Eurex Market Participant.  

To implement the amendments, the following provisions will be amended as outlined in Attachment 2:

  • Chapter II Part 1 Numbers 1.9.1 and 1.9.2 of the Clearing Conditions  

The amendments above will become effective on 1 August 2019. 

As of the effective date, the full version of the amended documents will be available for download on the Eurex Clearing website www.eurexclearing.com under the following link:

Resources > Rules and Regulations

Attachments: 

  • Attachment 1 – Updated sections in Chapter I of the Clearing Conditions
  • Attachment 2 – Updated sections in Chapter II of the Clearing Conditions

Recipients:All Clearing Members, Basic Clearing Members, Disclosed Direct Clients of Eurex Clearing AG and vendors
Target groups:Front Office/Trading, Middle + Back Office, IT/System Administration, Auditing/Security Coordination
Contact:client.services@eurexclearing.com
Web:www.eurexclearing.com
Authorized by:Manfred Matusza