On Sep. 24, EUREX Clear proposed clearing conditions amendments.
EUREX Clear introduced amendments to its clearing conditions re. Harmonization of Order of Priority of the Realisation of the Default Fund for ISA Direct Clearing Members.
Background
ISA Direct model was introduced with additional incentives for clearing agents to select their ISA Direct clearing members; in event of ISA Direct Member default, clearing agent is liable to 2 assessments on the default fund contribution of ISA direct member.
This is prior to the dedicated amount of EUREX Clear in the Order of Priority of the Realisation of the Default Fund, thereby tripling clearing agents' default fund payment.
Now direct clearing access for regulated buy-side firms and ISA Direct clearing model are well established, harmonization with standard waterfall and equal treatment of comparable risk is appropriate; admission requirements for ISA Direct equal those for other direct clearing members; explained that clearing agent Default Fund assessments relating to ISA Direct clearing members prior to dedicated amount of EUREX Clear in Order of Priority of the Realisation of the Default Fund will be removed.
Clearing members, ISA Direct clearing members, disclosed direct clients, FCM clearing members, vendors, other affected contractual parties should take account of changes.
Effectiveness
Clearing Conditions amendments are subject to consultation, ending Oct. 24, 2024.
Planned effective date of the amendments is Nov. 18, 2024, depending on the outcome of the consultation which will be communicated in a separate EUREX Clear circular.
Oct. 2024 End of Consultation
On Oct. 25, 2024, Eurex Clear issued Circular 078/24 stating it received no comments for further changes or amendments of the Special Provisions of the Clearing Conditions and had no requests for the application of a Prolonged Notification Period for changes.
Therefore, all changes and amendments regarding the above-mentioned topic, as notified in Eurex Clear Circular 071/24, will now come into effect from Nov. 18, 2024.
As announced and explained in Circular 071/24, Eurex Clear proposed amendments to the Clearing Conditions of Eurex Clear (Clearing Conditions) on Harmonization of Order of Priority of the Realization of the Default Fund for ISA Direct Clearing Members rules.
Clearing Members, ISA Direct Clearing Members, Disclosed Direct Clients, FCM Clearing Members, vendors and other parties must take Clearing Condition changes in account.
Amended sections of the Clearing Conditions are provided as attachment to Circular.
As of Nov. 18, 2024, amended conditions will be available for download on the website using Rules & Regs > Eurex Clearing Rules and Regulations > 1. Clearing Conditions.
