On Apr. 16, 2025, EUREX Clear issued circular on Clearing Conditions amendments.
As announced in circular 009/25, EUREX Clear proposed amendments to its Clearing Conditions re clarification of provisions on collateral in form of securities provided via title transfer regime including Default Fund contributions and ISA margin collateral.
Affected Clearing Conditions provisions are Chapter I Part 1 Numbers 2.1.2 (3)(d), 3.2.1, 3.2.3, 6.1.2 (1)(2); and Chapter I Part 4 Numbers 6.6.1.3, 6.6.2, 6.6.4, 6.6.5.
Clearing members, ISA Direct clearing members, Disclosed Direct clients, FCM clearing members, vendors, other affected contractual parties should take changes into account.
EUREX Clear received no comments that led to further changes of the Special Provisions of the Clearing Conditions, no requests for prolonged notification period.
Therefore, all changes and amendments will come into effect on Jun. 1, 2025.
As of Jun. 1, 2025, full version of the amended Clearing Conditions will be here.
On Mar. 7, EUREX Clear proposed amendments to clearing conditions.
EUREX Clear proposed amendments to its Clearing Conditions to change the scope of eligible collateral in form of securities provided under title transfer regime.
And clarify the provisions related to collateral in form of securities provided under title transfer regime including Default Fund contributions and ISA margin collateral.
Scope of Eligible Collateral
EUREX Clear revised its eligible securities collateral matrix and will allow a subset of the admissible securities list for securities collateral provided under legal regime title transfer and held with Clearstream Banking AG and Clearstream Banking S.A.
Affects securities collateral utilized to satisfy Default Fund, ISA title transfer margin requirements; no change to scope of eligible securities collateral delivered under legal regime pledge; needed as certain countries do not support separation of legal and beneficial ownership from tax point of view of title transferred securities collateral.
If no differing beneficial ownership status is supported for a market and EUREX Clear would receive securities under transfer of title, EUREX Clear will be relevant taxpayer.
Therefore, any compensation paid to the clearing member in respect of such securities would be net of withholding tax with the withholding tax rate to be determined based on EUREX Clear’s tax status in the issuing country - if withholding tax is deducted.
The clearing member, resulting from the not supported separation of legal and beneficial ownership, is assumed to be not entitled for withholding tax claims.
In order to ensure smooth processing, securities from countries which, taxwise, do not support the beneficial ownership principle and which raise withholding tax on securities, will now be excluded from title transfer accounts going forward.
Clearing Conditions Clarifications
Current legal framework provided for under the Clearing Conditions already supports different eligibility criteria for pledge and title transfer collateral, however, the amendments to the Clearing Conditions will provide more transparency in this regard.
The Clearing Conditions will be amended to provide for a greater clarity and ensure consistent treatment of all types of title transfer securities collateral arrangements which shall continue to provide for an economic exposure of Clearing Members to profits and losses related to the title transfer securities collateral delivered by them. Aims to follow concept of beneficial ownership in tax jurisdictions which recognize it.
Updated Clearing Conditions provisions: Chapter I Part 1 Numbers 2.1.2 (3)(d), 3.2.1, 3.2.3, 6.1.2 (1)(2)Chapter I Part 4 Numbers 6.6.1.3, 6.6.2, 6.6.4, 6.6.5.
Required Action
Clearing members, ISA Direct clearing members, Disclosed Direct clients, FCM clearing members, vendors. other affected contractual parties must consider the amendments.
Clearing Conditions amendments are subject to a Consultation which will end with the expiry of 8 April 2025. Eurex Clearing herewith invites all Affected Customers to submit comments on proposed changes and amendments within Consultation Period.
Effectiveness
Changes to scope of eligible collateral in form of securities provided under title transfer regime will become effective as of Apr. 1, 2025.
Clarifications to provisions related to collateral in form of securities provided under title transfer regime are subject consultation which will end at the end of Apr. 8, 2025.
Mar. 2025 CFTC Certification
On Mar. 10, 2025, EUREX Clear submitted for certification related to introduction of changes to securities collateral under Eurex Clearing EMIR-compliant clearing models.
Redline version of proposed amendments to Clearing conditions as Attachment A.
Intended implementation for Amendment No. 1 is Apr. 1, 2025; effective Jun. 1, 2025.
Mar. 21, 2025 Implementation Postponed
On Mar. 21, 2025, EUREX Clear postponed the implementation date to May 1, 2025.
In order to give the affected Clearing Members more time to implement the necessary documentation, process changes to ensure compliance, as it was requested by them.
Members are advised to verify the eligibility of the ISINs held on the relevant title transfer securities accounts by using the dedicated file, available on EUREX Clear site.
To avoid breaches during the grace period, Members are requested to monitor their holdings on title transfer securities accounts and make sure that non-eligible ISINs are substituted prior to the applicable corporate action event that will occur in Apr. 2025.
Mar. 24, 2025 CFTC Certification
On Mar. 24, 2025, CFTC certified to amendments to its Clearing Conditions re scope.
Apr. 2025 Clearing Conditions Amendments
On Apr. 16, 2025, EUREX Clear issued circular on Clearing Conditions amendments.
As announced in circular 009/25, EUREX Clear proposed amendments to its Clearing Conditions re clarification of provisions on collateral in form of securities provided via title transfer regime including Default Fund contributions and ISA margin collateral.
Affected Clearing Conditions provisions are Chapter I Part 1 Numbers 2.1.2 (3)(d), 3.2.1, 3.2.3, 6.1.2 (1)(2); and Chapter I Part 4 Numbers 6.6.1.3, 6.6.2, 6.6.4, 6.6.5.
Clearing members, ISA Direct clearing members, Disclosed Direct clients, FCM clearing members, vendors, other affected contractual parties should take changes into account.
EUREX Clear received no comments that led to further changes of the Special Provisions of the Clearing Conditions, no requests for prolonged notification period.
Therefore, all changes and amendments will come into effect on Jun. 1, 2025.
As of Jun. 1, 2025, full version of the amended Clearing Conditions will be here.
