Lines of Defense
We guarantee the fulfillment of every contract in every market for which we
provide our services. In order to ensure that we are able to keep this promise
to our clients, we set up a multi-level security system, which we call our
„Lines of Defense”. The mainstay of this security system is margin, which
Clearing Members deposit as collateral for open positions. However, the Lines of
Defense are comprised of much more that margin payments. They consist of multiple
layers of safety nets to protect the marketplace in the event of Clearing Member default.
These lines of defense are:
- Position close out
- Collaterals of Clearing Member in default
- Fund contribution of Clearing Member in default
- Eurex Clearing reserves
- Remaining Clearing Fund
- Eurex Clearing equity capital
These layers are built upon each other for maximum stability. In the event of a
default, they are implemented in the order that they are listed.
By using our unique Risk-based Margining method, we have always maintained sufficient
margins to cover Members' composite risk. As a testament to the robustness of this method,
to date we have never had to draw upon the contributions of a Clearing Member to the
Clearing Fund. You can rely on the stress-tested safety measures we've put into place.
