Amendments to the Clearing Conditions of Eurex Clearing AG

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) regarding the following topics:

A.   Introduction of Automatic Intra-Day Margin Processing 
B.   Intra-Day Margin Call Communication Enhancement

The amendments will become effective as of 1 July 2024.

2. Required action

There is no required action.

3. Details of the initiative 

A.  Introduction of Automatic Intra-Day Margin Processing

As of 1 July 2024, Eurex Clearing intends to introduce an optional solution to give Clearing Members the option to provide excess margin in advance on collateral pool level, which is automatically processed by Eurex Clearing during multiple collateralization runs per day. Clearing Members can choose to either balance the selected collateral pool or to provide excess margin by a fixed amount or percentage.

Additional information can be found in the C7 CMS Functional Reference Guide, which is also available on the Eurex Clearing website www.eurex.com/ec-en/ under the following path: Support > Initiatives & Releases > C7 Releases > C7 Release 10.0 > System Documentation.

The reason for the amendments is to offer Clearing Members more flexibility and an automatic solution for intraday risk management. With an appropriate excess margin setup, the probability for intra-day margin calls can be reduced significantly, which caters to the demand for a schedule-based margin call approach while keeping the advantages of Eurex Clearing’s event-driven risk management approach.

Upon provision of a written confirmation, the feature can also be used to avoid late USD intra-day margin calls. Clearing Members need to set up an appropriate level of excess margin and confirm that no new transactions are entered after 17:30 CE(S)T.

To reflect the change, the following provisions of the Clearing Conditions will be amended as outlined in Attachment 1:

• Chapter I Part 1 Number 3.7 of the Clearing Conditions

B.  Intra-Day Margin Call Communication Enhancement

Eurex Clearing will introduce a new intra-day report to share the documentation of an intra-day margin call provided via Common Report Engine (CRE). This change will leverage our existing reporting landscape and increase the transparency towards our clients.

Additional information can be found in Eurex Clearing Newsflash from 28 March 2024: Intraday margin calls: Client communication enhancement.

To reflect the change, the following provisions of the Clearing Conditions will be amended as outlined in Attachment 2:

• Chapter I Part 1 Number 16.3 of the Clearing Conditions

As of the effective date, the full version of the amended Clearing Conditions will be available for download on the Eurex Clearing website under the following link:

Rules and Regulations > Eurex Clearing Rules and Regulations > 1. Clearing Conditions

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: 

• 1 – Amendments to Chapter I Part 1 Number 3.7 of the Clearing Conditions
• 2 – Amendments to Chapter I Part 1 Number 16.3 of the Clearing Conditions

Further information