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ISA for NCMs/RCs

Individual Segregated Account (ISA) for NCMs/RCs

The ISA structure ensures that specific assets provided to Eurex Clearing are protected against the default of another market participant.

  • Individual segregation ensures that clients have no risk of mutualisation with either the proprietary business of the Clearing Member or other clients of the Clearing Member. NCMs/RCs have their own segregated position and collateral accounts at the CCP. The ISA model also segregates excess collateral at the level of the CCP.

            

  • By opting for this model the Clearing Member, the NCM/RC and Eurex Clearing enter into a tripartite clearing arrangement (Clearing Agreement). 
  • The model provides the highest likelihood of porting. Should there be a Clearing Member default, NCMs/RCs can choose to port immediately to a Replacement Clearing Member or become an Interim Participant, directly facing Eurex Clearing for a limited period until a Replacement Clearing Member is identified and accepts the porting.
  • Alternatively, NCMs/RCs can elect to close-out and directly receive their close-out proceeds and remaining collateral back.
  • The NCM/RC and the Clearing Member can agree on direct delivery and redelivery of Eligible Margin Assets to Eurex Clearing which avoids transit risk for the client when providing collateral to cover the margin requirement calculated by the CCP.
  • Collateral management options ensure the model is operationally simple to manage at the CCP.
  • In Eurex Clearing's view, this model benefits from a 2 percent risk weight for trade and collateral exposure, OSAs are subject to higher risk weights.