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Amendments to the Price List, the Clearing Conditions and the FCM Regulations of Eurex Clearing AG

Release date: 16 Mar 2020 | Eurex Clearing

No. 025/2020 Amendments to the Price List, the Clearing Conditions and the FCM Regulations of Eurex Clearing AG

Eurex Clearing Circular 025/20

1. Introduction

This circular contains information with respect to the service offering of Eurex Clearing AG (Eurex Clearing) and introduces amendments to the Price List, the Clearing Conditions and FCM Regulations of Eurex Clearing AG regarding the following topics:

A.  Amendment of contractual penalties in general and for failed Repo Transactions and GC Pooling Repo Transactions
B.  Deletion of Service Fees for intra-day exchange of Eligible Margin Assets
C.  Extension of notice period for amendments to the Price List from 10 business days to 15 business days
D.  Clarification regarding Japan-related clearing of OTC Interest Rate Derivative Transactions

To the extent that the amendments regarding A. are subject to a Consultation, the Consultation will end on 16 April 2020. The planned effective date of these amendments is 1 June 2020, depending on the outcome of the Consultation which will be communicated in a separate Eurex Clearing circular. To the extent that the amendments regarding A. are not subject to a Consultation, the amendments will become effective as of 1 June 2020.

The amendments regarding A. (i) and B. to D. will become effective as of 1 June 2020.

2. Required action

The amendments to the Clearing Conditions of Eurex Clearing AG (Clearing Conditions) regarding A. (ii) are subject to a Consultation which will end with the expiry of 16 April 2020 (“Consultation Period”).

Eurex Clearing herewith invites all Affected Customers to submit comments on the proposed changes and amendments within the Consultation Period.

3. Details

A.  Amendments of contractual penalties in general and for failed Repo Transactions (i) and GC Pooling Repo Transactions (ii)

(i)    The maximum amount of the general contractual penalty provision will be cut at €25,000. In addition, it will be clarified that the contractual penalty shall not apply in case the failing (Basic) Clearing Member is not responsible for such failure, and that any amount received by Eurex Clearing as contractual penalty shall be deducted from any potential claim for damages Eurex Clearing may have against the failing (Basic) Clearing Member that is based on the same facts.

To reflect these changes, the following provisions of the Clearing Conditions will be amended, as outlined in Attachment 1:

  • Chapter I Part 1 Number 14.2.2

(ii)    The application of contractual penalties for failed Repo Transactions differs from the process for failed GC Pooling Transactions. These differences will be clarified with this amendment. In addition, the maximum amount of contractual penalties applied for failed GC Pooling Transactions will be reduced from €25,000 to €15,000. Due to the high exposure amounts of GC Pooling Transactions, the maximum penalty of €25,000 was usually applied in case of a failure. This is considered to be too high and is therefore reduced. Additionally, it will be provided that any amount received by Eurex Clearing as contractual penalty shall be deducted from any potential claim for damages Eurex Clearing may have against the failing (Basic) Clearing Member that is based on the same facts. 

To reflect the changes, the following provisions of the Clearing Conditions will be amended, as outlined in Attachment 2:

  • Chapter IV Part 2 Number 2.6

Consultation with respect to the amendments proposed under A. (ii)

Pursuant to Chapter I Part 1 Number 17 of the Clearing Conditions, the proposed changes and amendments to the Clearing Conditions under A. (ii) are subject to a Consultation which will end with the expiry of 16 April 2020 (Consultation Period).

Eurex Clearing herewith invites all Affected Customers to submit comments on the proposed changes and amendments within the Consultation Period.

During the Consultation Period, comments on proposed changes or amendments shall be only submitted through a web-based commenting service for which a registration form is available on the Eurex Clearing website (www.eurexclearing.com) under the following link:

The form has to be duly signed and returned to Eurex Clearing via e-mail to SpecialProvisions@eurexclearing.com, in order to obtain a User ID and Password together with a link for accessing the web-based commenting service.

To the extent that Eurex Clearing decides to implement any comments received during the Consultation, the so-amended version of the Clearing Conditions will be published after the Consultation.

The currently envisaged effective date of the changes is 1 June 2020. However, after the Consultation Period, Eurex Clearing will issue a separate circular to announce the concrete date on which the proposed changes (as the case may be, implementing comments received during the Consultation) will come into effect. 

This announcement will be made with at least 15 Business Days’ notice (Regular Notification Period). However, if Eurex Clearing should receive a request for a Prolonged Notification Period from more than two Affected Customers during the Consultation Period, a Prolonged Notification Period as set out in the Clearing Conditions will be applied and Eurex Clearing will notify all affected parties accordingly.

B.  Deletion of Service Fees for intra-day exchange of Eligible Margin Assets 

Currently, Number 9.3 of the Price List of Eurex Clearing AG (Price List) stipulates that Eurex Clearing shall charge a service fee for intra-day collateral transfers for covering margin requirements (i.e. intraday exchange of collateral). 

Since the introduction of the cash service fee and securities collateral handling fee in 2012, which economically includes the individual intra-day collateral transfer fee, intra-day collateral transfer fees have not been charged in practice. As result, Number 9.3 of the Price List lost its scope of application and will therefore be deleted.

To reflect the changes, the following provisions of the Price List will be amended, as outlined in Attachment 3:

  • Number 9.3

C.  Extension of notice period for amendments to the Price List from 10 business days to
15 business days

Currently, the Price List defines that any amendments and/or supplements to the Price List shall be announced to the Clearing Members and, if affected, other customers no later than ten (10) Business Days prior to their entry into force while amendments and/or supplements to the Clearing Conditions shall be announced to the Clearing Members and, if affected, other customers no later than ten (15) Business Days prior to their entry into force.

In order to harmonise the Price List and the Clearing Conditions, the notice period stipulated within the Price List will be extended from 10 to 15 days.

To reflect the changes, the following provisions of the Price List will be amended, as outlined in Attachment 3:

  • Number 15.2

D.  Clarification regarding Japan-related clearing of OTC Interest Rate Derivative Transactions

The Clearing Conditions and FCM Regulations of Eurex Clearing AG will be amended to clarify the scope of the recently introduced limitations for Japan-related clearing of OTC Interest Rate Derivative Transactions. Specifically, it will be clarified that the limitations are addressed to entities that qualify as Financial Instruments Business Operators and Registered Financial Institutions under the Japanese Financial Instruments and Exchange Act. 

To reflect the changes, the following provisions will be amended, as outlined in Attachments 4 and 5:

  • Chapter I Part 1 Numbers 1.11 and 1.12 of the Clearing Conditions and 
  • Chapter I Number 1.7.2 of the FCM Regulations of Eurex Clearing AG

Publication of amendments as outlined under A.-D. with the exception of A. (ii)

As of the effective date, the full version of the amended Clearing Conditions, Price List and FCM Regulations of Eurex Clearing AG will be available for download on the Eurex Clearing website www.eurexclearing.com under the following link:

The changes and amendments to the legal framework of Eurex Clearing AG published by this circular are deemed accepted by each affected contractual party of Eurex Clearing AG, unless the respective contractual party objects by written notice to Eurex Clearing AG within the first ten (10) Business Days after publication. Any ordinary right of Eurex Clearing AG to terminate the respective contract (including a Clearing Agreement, if applicable) shall remain unaffected.

Unless the context requires otherwise, terms used and not otherwise defined in this circular shall have the meaning ascribed to them in the Clearing Conditions or FCM Clearing Conditions of Eurex Clearing AG, as applicable.

Attachments:

  • 1 – Amended sections of Chapter I Part 1 Number 14.2.2 of the Clearing Conditions
  • 2 – Amended sections of Chapter IV Part 2 Number 2.6 (1) (a) (aa), IV Part 2 Number 2.6 (1) (a) (bb), IV Part 2 Number 2.6 (1) (b) (aa) and IV Part 2 Number 2.6 (1) (b) (bb) of the Clearing Conditions
  • 3 – Amended sections of Numbers 9.3 and 15.2 of the Price List
  • 4 – Amended sections of Chapter I Part 1 Numbers 1.11 and 1.12 of the Clearing Conditions
  • 5 – Amended sections of Chapter I Part 1 Number 1.7.2 of the FCM Regulations of Eurex Clearing AG

Further information

Recipients:All Clearing Members, FCM Clearing Members, Basic Clearing Members, Disclosed Direct Clients of Eurex Clearing AG, vendors and other affected contractual parties
Target groups:Front Office/Trading, Middle + Back Office, IT/System Administration, Auditing/Security Coordination
Contact:client.services@eurexclearing.com
Web:www.eurexclearing.com
Authorised by:Heike Eckert