Eurex’s ISA Direct gaining traction

Eurex Clearing’s direct access model for the buy side – ISA Direct – is gaining traction as it welcomes its first EU-domiciled bank as a member. Raiffeisenlandesbank Niederösterreich-Wien AG (RLB NÖ-Wien) recently became a direct clearing member of the central counterparty’s ISA Direct service, with ABN AMRO acting as clearing agent. 

ISA Direct  brings together elements of the traditional client clearing service relationship with direct access for the buy side, allowing a new principal-client relationship between these market participants and the CCP. The addition of RLB NÖ-Wien to the program comes after Swiss Life Asset Managers  and PGGM, the Dutch pension fund, both joined ISA Direct earlier this year. There are now eight basic clearing members and four agents live on OTC IRS and Repo.

Banks are facing more onerous capital requirements, which have sometimes led to higher fees and wider spreads in the clearing space. There is also an increasing industry awareness around clearing costs and risk concentration. In this context, Eurex brought ISA Direct to market to support both the buy and sell sides in addressing these concerns. While buy side and smaller market participants previously had to use clearing brokers to intermediate with their clearing house, ISA Direct now allows these firms to face Eurex Clearing directly. Within this framework, a clearing agent deals with obligations such as default management, as well as possibly offering further services such as transaction or collateral management.

“Having a direct relationship with Eurex Clearing provides us with a range of advantages in terms of both costs and collateral management,” says Jochen Bonk, Head of Fixed Income Management at RLB NÖ-Wien. “Alongside lower fees, we can now make use of a much wider variety of collateral compared to our previous arrangements with intermediaries. Improving the portability of our assets in this way has opened up significant capital and operational efficiencies.”

With ABN AMRO acting as clearing agent, RLB NÖ-Wien’s relationship with Eurex is supported by a market-leading clearing provider with a track record of supporting innovation in the clearing space. 

“We are very happy to partner with RLB NÖ-Wien,” says Alexander Jacobs, Head of OTC Clearing at ABN Amro Clearing. “Acting as clearing agent, rather than as the clearing member, optimizes the impact on our balance sheet and creates opportunities to further expand our central clearing services.”

Philip Simons, Global Head of Sales, Fixed Income at Eurex says: “The onboarding of our first EU-domiciled bank, RLB NÖ-Wien, to ISA Direct demonstrates the widening adoption of this innovative solution. This confirms its utility to a broad range of market participants including both the buy side and the sell side. With the ongoing support of globally leading players like ABN AMRO Clearing, we are looking forward to welcoming additional clients who are currently onboarding.”  

About Eurex Clearing

Eurex Clearing is one of the leading central counterparties globally — assuring the safety and integrity of markets while providing innovation in risk management, clearing technology and client asset protection. Eurex Clearing serves about 200 Clearing Members in 20 countries, managing a collateral pool of EUR 56 billion and clearing trades valued at EUR 23 trillion (double counted) every month.  

About Raiffeisenlandesbank Niederösterreich-Wien AG

RLB NÖ-Wien AG is a modern regional, cooperative and commercial bank in the east of Austria servicing approximately 266k customers. As the central institute for the Lower Austrian Raiffeisen banks it provides assistance and support for all issues in banking. The 53 independent Lower Austrian Raiffeisen banks have a market share of 42 percent and service a total of 974k customers.

About ABN AMRO Clearing

ABN AMRO Clearing is one of the world’s leading providers of clearing and financing services for listed derivatives and cash securities, OTC products, warrants, commodities and FX. With 11 offices globally employing more than 800 staff, ABN AMRO Clearing services clients on 160+ exchanges, MTFs and FX liquidity centres and consistently ranks as a top 3 clearer in most time zones.   We consistently post over 20% market shares of transactions cleared on most relevant derivatives exchanges globally. ABN AMRO Clearing offers an integrated approach to global transaction processing, financial logistics and risk management and processes over 14 million trades per day.