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Securities lending

Securities lending

Admission requirements

To maintain the highest standards, only companies that meet certain stringent criteria are eligible for clearing membership; our admission standards are the first step in a comprehensive system of safeguards designed to maximize the safety and integrity of the markets operated by Eurex Clearing’s CCP services.

 

Capital requirements

We recognize that markets are continually fluctuating. To ensure that our Clearing Members are sufficiently capitalized to deal with changing market conditions, we set capital requirements for Clearing Licenses. These capital requirements are set in line with estimated risk levels and are reviewed quarterly to reflect developments in the markets.

Irrespective of the minimum amounts of own funds* (capital) specified below, the actual amount of own funds that we require our Clearing Members to demonstrate and maintain is equal to the higher amount of:

  • 20 percent of average initial margin requirement (30 days), or
  • 20 percent of average initial margin requirement (250 days), or

The level of the own funds is calculated on a quarterly basis at the end of March, June, September and December for the subsequent quarter.

 Capital requirements GCM
(in EUR millions)
Capital requirements DCM
(in EUR millions)
Securities Lending Clearing License20050


The minimum capital requirements for own funds is calculated for multiple licenses in different asset classes.

* The term own funds was introduced pursuant to the European Capital Requirements Directive 2013/36/EU (CRD IV) and the European Capital Requirements Regulation (EU) No. 575/2013 (CRR). It replaces the term “liable equity capital”. For additional information on own funds, please refer to the Clearing Conditions for Eurex Clearing AG.

Default Fund

Every well-built house starts with a strong foundation. In the case of our clearing house we have built it on a sound framework of safeguards — which we call our lines of defense — to protect our customers and to enhance the markets integrity.

 
In order to ensure continued market integrity, we operate stress-tested lines of defense of which the Default Fund is one. Eurex Clearing maintains a Default Fund in order to protect market participants in the event of a Clearing Member default. In addition, the Default Fund is reviewed every quarter to ensure the fund is aligned with current market risk.

Based on the Clearing Member’s status Direct Clearing Member (DCM), General Clearing Member (GCM) or OTC Clearing Member (OTC CM)), the minimum Default Fund contribution is determined by Eurex Clearing as follows (minimum requirement):

  • EUR 5 million for GCM, OTC CM
  • EUR 1 million for DCM

In addition, the Default Fund requirements are dynamic considering the overall risk exposure of the single Clearing Member towards the CCP. The Default Fund requirement is determined by the highest single
amount of the following components:

  • Default Fund minimum requirement as mentioned above, or
  • 7 percent of the 30 day initial margin requirement average, or
  • 7 percent of the 250 day initial margin requirement average.

The total margin requirement includes all products and asset classes cleared by the Clearing Member.

Initial margin corresponds to the sum of futures spread margin and additional margin.

Clearing & settlement accounts

We offer Clearing Members flexibility when setting up pledge securities accounts and settlement accounts that are required for Clearing Membership. They can choose to set up accounts at either Clearstream Banking AG, Frankfurt or SIS SegaInterSettle AG, Zurich for pledge securities accounts.

 

Account setup for participants

Cash Account

Securities accounts for equity loan securities at CSDs

Tri-Party Collateral Agent (TPCA)

EUR: TARGET2 account of a national central bank in the Eurozone

USD: Bank cash account with a bank recognized by Eurex Clearing.

  • Bank of America N.A.
  • Citibank N.A. New York City
  • Deutsche Bank Trust Company Americas
  • HSBC Bank USA N.A.
  • JP Morgan Chase Bank N.A.
  • JP Morgan Chase Bank N.A. London
  • The Bank of New York Mellon


CHF: Swiss National Bank (SNB)

GBP: Bank cash account with a bank recognized by Eurex Clearing.

  • Barclays Bank PLC
  • Citibank N.A. London
  • Deutsche Bank AG, London Branch
  • HSBC Bank PLC
  • JP Morgan Chase Bank N.A. London
  • National Westminster Bank PLC
  • Royal Bank of Scotland PLC

or alternatively a multicurrency cash account with:

  • Clearstream Banking AG (CBF), including a CBF(I) account, and/or
  • Clearstream Banking S.A., or
  • Euroclear Bank SA/NV.

Belgium ESES/Euroclear Belgium

France ESES/Euroclear France

Germany, Austria and Italy Clearstream Banking Frankfurt (CBF), (CBF(I))

Netherlands ESES/Euroclear Netherlands

Switzerland SegaInterSettle Zurich (SIX SIS)


Access to the infrastructure of at least one Tri-Party Collateral Agent (TPCA).

Securities accounts for fixed income loan securities at (I)CSDs:

- Clearstream Banking Luxembourg (CBL)

and/or

- Euroclear Bank (EOC)

 

Collateral management at Tri-Party Collateral Agents

Eurex Clearing's CCP service for securities lending makes use of the services of Tri-Party Collateral Agents (TPCA) for the management of the non-cash Principal Collateral of loan transactions. Currently Clearstream Banking Luxembourg (CBL), BNY Mellon (BNYM) and Euroclear Bank (EB) have been integrated in the CCP service for securities lending.

Lender and Borrower have to agree to use the same Tri-Party Collateral Agent, either Clearstream Banking Luxembourg (CBL), BNY Mellon (BNYM) or Euroclear Bank (EB). No cross-collateralization between the Tri-Party Collateral Agents is permitted.

The Tri-Party Collateral Agent manages the Principal Collateral based on the principal exposure information that is calculated and sent by the CCP. For this service, the Tri-Party Collateral Agents apply eligibility criteria.

 

Qualified Clearing Staff

As we strive to maintain high qualification levels of clearing firms for reasons of clearing house integrity, it is required to register at least one "Qualified Clearing Staff" (QCS) in the back-office with Eurex Clearing.
The Clearing Member has the following possibilities to provide proof of the qualification of the staff member that shall be in QCS:

  • The Compliance Officer of the Clearing Member confirms the respective knowledge of the staff member, or
  • The staff member has passed the Clearer Test (Basic Module), or
  • The staff member has passed the exam for the Certified Clearing Specialist, or
  • The staff member has attended the Core Clearing Knowledge seminar.

All tests, exams and seminars are offered by Deutsche Börse Capital Markets Academy.

If the Clearing Member is outsourcing its clearing, back office or risk management functions to an Insourcer, either the Clearing Member or the Insourcer has to have a QCS.

Further information

 
 

Emergency contact

Each Clearing Member has to appoint and register at least one employee as emergency contact for Eurex Clearing. This emergency contact needs to be available during business hours and needs to be able to initiate necessary measures in emergency cases.

Since 18 May 2015, the emergency contact is included in the Member Section, where the Clearing Member can maintain this data.

Eurex Clearing AG
Group Client Services, Trading & Clearing and Cash Market

 
 

Admission forms

If you wish to apply for Securities Lending services you may find all mandatory forms available here.


 
Further admission forms
      • 06 Apr 2017
    • Securities Lending Cash Accounts Selection Sheet for Cash Grouping

      This Upload sheet is used by Clearing Members (CMs) and Holders of a Specific Lender License (SLLH) to provide Cash Accounts for Securities Lending Cash Transactions.

      Download
 
 
 

Eurex Clearing AG
Group Client Services, Trading & Clearing and Cash Market

T +49-69-211-1 4499

 
 
 
 
 
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