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EurexOTC IRS functionalities

EurexOTC interest rate swaps functionalities

EurexOTC Clear's offering initially includes clearing for the following standardized interest rate derivatives in euro, U.S. dollar, British pounds and Swiss franc:

  • Single currency interest rate swaps ("IRS")
  • Forward rate agreements ("FRA")
  • Overnight index swap ("OIS")
  • Single currency basis swaps

Please find below an overview of our EurexOTC interest rate swaps functionalities as well as quick links to the EurexOTC Clear workflow of post trade events - and see how Eurex Clearing web-based front end supports the trade registration process and transaction management:

 

Take-up

Take-up of a bilateral trade by a Clearing Broker is a part of the client trade registration at the clearing house. The client indicates the Clearing Broker and the trade is offered to this Clearing Broker for take-up. The Clearing Broker can either accept or reject the trade.

Trade Rejection

The trade rejection functionality permits the Clearing Members and the Registered Customers to reject bilateral trades (that are pending novation) due to missing collateral. The aim is to reduce the member’s default risk emerging from margin calls on non-novated trades.

Trade transfer

The Clearing Member (CM) or Registered Customer (RC) may request a transfer of a trade to another CM (in full or partially). Subject to acceptance by the other CM (if RC is a requester) the trade will be offered to the transferee for take-up. If the consent is given by the transferee and the risk check is positive, the trade is transferred (i.e., terminated in the account of a transferor and created in the account of the transferee).

Account transfer

The Clearing Member (CM) or Registered Customer (RC) may request transfer of a trade within the CM’s accounts (CM’s prop and agent accounts and all accounts of his RCs). Subject to acceptance by the CM (if RC is a requester) and after a positive risk check, one trade or splits will be rebooked to the specified accounts.

Trade amendment

The trade amendment enables changing/adding the internal client references or/and split trades within the current account. If a trade is split, the process is subject to acceptance by the Clearing Member (if Registered Customer is a requester). All splits will be rebooked within the current account. A risk check is not applied.

Termination

After a positive risk check and acceptance from the owner of a linked trade, a trade may be terminated in full or partially. It means that the notional of a trade will be reduced or the trade will be terminated in full and will not exist anymore. No termination is possible if a Post Trading Event (PTE) has been performed on the linked trade (original bilateral trade) and the notional of this trade has been changed.

De-clear

De-clear means the ability to "de-register" a trade (in full) from the Eurex Clearing service and "unlock" the bilateral trade in MarkitWire. The trade will continue to exist on bilateral basis. The positive risk check (sufficient collateral) and acceptance from the owner of a linked trade are pre-requisites for de-clear. De-clear may be requested on a business day following the clearing date at the latest. No de-clear is possible if a Post Trading Event (PTE) has been performed on the linked trade (original bilateral trade) and the notional of this trade has been changed.

Netting/accumulation

On the GUI, a netting string may be added to the trade; the trades with the same and eligible netting string will be netted/accumulated in the next netting cycle (end of day). Removing the netting string from a trade is also possible.