Amendments to the Clearing Conditions: Market Disruption at Eurex Exchange

1.   Introduction   

The Executive Board of Eurex Clearing AG decided with effect from 27 December 2023:

• Amendments to the Clearing Conditions of Eurex Clearing AG (Clearing Conditions)

in order to reflect corresponding changes made in the Exchange Rules of Eurex Deutschland (Exchange Rules), Conditions for Trading at Eurex Deutschland and Contract Specifications for Futures Contracts and Options Contracts at Eurex Deutschland (Contract Specifications) for regulations dealing with disruption of exchange trading on Eurex Exchange. 

Please refer to Eurex Circular 101/23 for detailed trading-related information, including fee classification and the related amendments to the Rules and Regulations of Eurex Deutschland.

2.   Required action

Attention is drawn to the possibility that the Management Board of Eurex Deutschland and the Executive Board of Eurex Clearing may postpone the expiration date of Contracts. This measure will technically change the contract expiration date that is available in the reference data feed. Participants need to be prepared for changes in the contract expiration date during the lifetime of the contract.

3.   Details

A. Regulations for dealing with disruptions of Eurex Exchange

Eurex Deutschland has consulted on the handling of disorderly markets (Market Disruptions) with a proposal to amend the Exchange Rules and the Contract Specifications with rules that define “Disrupted Market Conditions” and set out possible measures that the Management Board of Eurex Deutschland may take in response after consultation with Eurex Clearing.

Not limited to the occurrence of Disrupted Market Conditions, the Management Board may order one or a combination of the following measures:

a.    early termination and settlement of Contracts,
b.    postponement of the expiry date of Contracts,
c.    exclusion of physical delivery,
d.    definition of an alternative currency for Contracts,
e.    suspension or termination of trading of Contracts according to § 25 of the German Stock Exchange Act and §13 of the Exchange Rules,
f.    determination of maximum and/or minimum prices for individual Contracts.

Consequently, Eurex Clearing is amending the Clearing Conditions to adequately reference to the amended Contract Specifications and Exchange Rules of Eurex Deutschland.

Under extraordinary circumstances, Eurex Clearing may likewise take certain measures, in its own reasonable discretion.

For measures taken by Eurex Clearing, the following guiding principles have been defined in Chapter II Number 1.11 (3) of the Clearing Conditions:

g.    based on risk considerations
h.    to reinstate an orderly clearing
i.    acting non-discriminatory
j.    proportionate measures - no less severe measure available
k.    consult Eurex Exchange
l.    consult Clearing Members, if practical before taking actions in response to Disrupted Market Conditions.

B. Amendments to the legal framework of Eurex Clearing AG

To reflect this decision in the legal framework of Eurex Clearing AG, the following provisions will be amended as outlined in the Attachment:

• Chapter II of the Clearing Conditions of Eurex Clearing AG

As of the effective date, the full versions of the amended Clearing Conditions will be available for download on the Eurex Clearing website under the following link:

Rules & Regs > Eurex Clearing Rules and Regulations > 1. Clearing Conditions

The 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 prior to the relevant effective date(s) as stipulated in this circular. In case of an objection by the respective contractual party pursuant the preceding sentence, Eurex Clearing AG is entitled to terminate the respective contract (including a Clearing Agreement, if applicable). Instead of submitting an objection, the respective contractual party may submit in writing to Eurex Clearing AG comments to any amendments of the legal framework of Eurex Clearing AG within the first 10 Business Days after the publication of the amendments. Eurex Clearing AG shall assess whether these comments prevent the published amendments from becoming effective taking into account the interests of Eurex Clearing AG and all contractual parties. 

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, as applicable.

Attachment:

• Amended sections of the Clearing Conditions of Eurex Clearing AG, effective as of 27 December 2023

Further information