Failure Handling
In order to further protect buyers and with the goal of increasing settlement efficiency, we have
developed robust solutions for dealing with failure handling. These include measures to accommodate
late delivery processing as well as a buy-in and cash settlement model.
Late Delivery Processing:
Eurex Clearing as a central counterparty has the obligation to buy from the original seller and to deliver
to the original buyer. If the original seller fails to deliver, the CCP starts a fail process in order
to fulfill its obligation.
There are different fail processes applied depending on the trading platform/markets and asset classes.
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FWB: Buy-in and cash settlement model is applied
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Eurex Exchanges:
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Deliveries out of exercises/assignments: Buy-in and cash settlement model is applied
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Deliveries out of notifications/allocation:
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Fines (0,40 % of the nominal value per contract and
calendar day (0,04 % on volume not settled in SDS1
on the contractual settlement day)
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IoD (reference interest rate plus 1 to 3 percent on outstanding amount) are applied
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Eurex Bonds/Eurex Repo: No fines
Buy-in and Cash Settlement Model:
The late delivery management model includes
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Buy-in: Eurex Clearing has implemented an auction where offers are given. The new Buy-in seller
replaces the original seller
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Cash Settlement: in case a Buy-in is not successful the failed seller is debited and the buyer is
credited with a cash settlement price. There is no delivery of stocks.
