Collateral Processing

Collateral processing takes place in a straightforward manner. In order to provide clarity for back office staff, we outline the procedures. Individual steps take place in the following sequence:

Cash Collateral:

• The Clearing Member announces the planned provision of cash collateral by fax to Eurex Clearing (Market Supervision).
• Eurex Clearing (Market Supervision) debits the announced amount per S.W.I.F.T. instruction from the deposited account of the respective payment infrastructure.
• As soon as the payment has been received, the amount will be credited to the Member as margin and henceforth considered in Intraday Margining and batch processing.
• In order to release the deposited cash collateral, the Clearing Member announces the respective instruction to Eurex Clearing (Market Supervision) by fax.
• Eurex Clearing (Market Supervision) transfers the respective amount by S.W.I.F.T. instructions to the deposited account of the respective payment infrastructure (only if the Clearing Member's remaining collateral will be sufficient).

Additionally cash collateral can be provided by the usage of the permanent cash balance:

• Clearing Members will be enabled to maintain their permanent cash balances via the Collateral tab of the Member General Information window. The permanent cash balance is independent from an under- or over-collateralization. The permanent cash balance represents the requested permanent cash holding in each individual currency and might lead to an appropriate cash call or withdrawal on the next day.
• All cash deposits can be released automatically only to the applied and registered accounts.
• Report CD042 (Daily Settlement Statement) shows the overnight collateralization with the Permanent Cash Balance values, whereas report CD020 (Security Movement and Coverage) shows the deposited values.

Deposits of Securities

• Members can inquire as to the acceptability of any given security on the Collateral Security Information window.
• The Clearing Member debits the securities directly within the system of the relevant CSD (Clearstream Banking AG Frankfurt (CBF) or SegaInterSettle Zurich (SIS) to the relevant pledged account.
• These deposits will be credited near-time. Clearing Members will receive an up-to-date overview of their pledged securities through the new Collateral Transaction Overview window. To receive this information they must subscribe to the respective broadcast stream ("L").
• In the event that a deposit is unacceptable, Eurex will now instruct a deposit reversal (back to the member's main account) near-time.

Withdrawal of Securities

• Withdrawal requests or requests for intra-day substitutions "securities against securities" via Fax will be not accepted anymore.
• Initial withdrawals will now be made using the Security Collateral Transaction Entry (SCTE) window. Once confirmed by Eurex Market Supervision that margins will be met without the securities requested, there will be an immediate transfer from the pledge account into the Member's main account.
• This migration does not concern XEMAC participants. The present processes for booking and withdrawal of collateral will remain unchanged.
• Should a withdrawal request lead to an under-collateralization in the Member's account, the transfer of the requested securities will be postponed until the next business day or until the proper amount of funds are in the account to fully fund the margin requirements.