Securities Clearing: C7 Securities Clearing Service (C7 SCS) Release 3.5 – Production launch announcement

1. Introduction

With this circular, Eurex Clearing announces the production launch of the optional Release 3.5 of the C7 Securities Clearing Service (C7 SCS) on 10 June 2024.

Please also notice the new distribution date for the new Monthly Fine Statement (CB227) report in the production environment.

With the introduction of C7 SCS Release 3.5, the Pair-Off service offered by Eurex Clearing will be enhanced, adding more flexibility to select Buy Transactions for the Pair-Off Request.

Production start: 10 June 2024

Distribution start of the new report Monthly Fine Statement (CB227) in the production environment: latest by 5 November 2024

Learn now more about C7 SCS Release 3.5 on our dedicated initiative page on the Eurex Clearing website www.eurex.com/ec-en/ under the following link: Support > Initiatives & Releases > C7 SCS Releases > C7 SCS Release 3.5.

System documentation, circulars, timeline and much more information is available there for you.

2. Required action

A.  Currently, Special Repo and GC Repo Transactions executed in French, Italian or Spanish bonds which can be settled in (i)CSDs (CBL, CBF-i, Euroclear Bank) only. In future these can also be settled in T2S/CBF. Clients who wish to use this option will need to request the amendment of their settlement account set-up for Eurex Repo accordingly.

B.  Clients interested in the introduction of Eurex Nordic Equity Options initiative, especially in NOK equity trading, will have to update the xsd-files for C7 SCS reports. The report update populates NOK as currency in CE890/1/2 Net Clearing Reports – XEUR, in CE860/1/2 Pending Delivery Reports as well as via the CE870/1/2 Settled Delivery Reports. The new xsd-files and C7 SCS 3.5 Report Reference Manual will be available by the start of June 2024 on the C7 SCS Release 3.5 initiative page.

3. Details of the initiative

A. Settlement of Special Repo and GC Repo transactions executed in French, Italian and Spanish bonds via T2S/CBF

Today, the settlement of Special Repo and GC Repo transactions executed in non-German bonds is possible via (i)CSDs CBL, CBF-i and Euroclear Bank. With C7 SCS Release 3.5, Eurex Clearing will introduce the possibility for Clearing Members to settle their Special Repo and GC Repo transactions executed in French, Italian and Spanish bonds via T2S/CBF.

Based on client’s preference, Special Repo and GC Repo transactions executed in French, Italian or Spanish bonds can be either settled in (i)CSDs or T2S/CBF. In order to make use of the new settlement process, Clearing Members need to request the amendment of their settlement account set-up accordingly and provide Eurex Clearing with the respective CBF account. Especially the taxation status for Italian Bonds must be aligned before the CBF account will be activated in C7 SCS.

This enhancement is applicable for Special Repo and GC Repo transactions only and does not affect GC Pooling Repo transactions.

B. New Monthly Fine Statement (CB227)

The new Monthly Fine Statement (CB227) report provides two types of information – fine components that are charged on a monthly basis and aggregated information of fine components that are charged on a daily basis. The changed date of the distribution start for the new Monthly Fine Statement (CB227) report and change to the content of the existing report Daily Clearing Fees - EUREX and FSE (CB350) in the production environment is 5 November 2024 for the billing period of October 2024.

This report can be subscribed to via the form “SCS report selection for Clearing Member/Settlement Institution consolidated” which is available on the Eurex Clearing website under the link: Find > Forms

C. Enhancement of Pair-Off Service

Eurex Clearing offers a Pair-Off Service enabling Clearing Members to resolve opposing late securities transactions relating to the same securities (ISIN) and currency pending at the settlement location. Currently, the Pair-Off Eligibility Requirements demand that only Buy Transactions which are late and have passed the settlement cut-off of the Contractual Settlement Date qualify for a Pair-Off Request at the time it is submitted. Eurex Clearing decided to adjust this rule in a way that Buy Transactions having their Contractual Settlement Date on the Pair-Off Date will be also eligible for a Pair-Off Request. The new Pair-Off Eligibility Requirement stipulates that Buy Transactions have their Contractual Settlement Date on or before the Pair-Off Date.

The adjusted Pair-Off Eligibility Requirements will become effective on 10 June 2024, the updated “SCS Pair-Off Request Form” will be available on the Eurex Clearing website under the link: Find > Forms

D. Nordic Options – addition of NOK as currency to C7 SCS reports related to exercises from Eurex Nordic Equity Options initiative

With the launch on 8 July 2024, Norwegian equity options on underlying shares in Non-Collective Safe Custody (NCSC), Danish equity options on underlying shares in Collective Safe Custody (CSC) and a mix of non-Swedish equity options on underlying shares in CSC and NCSC will be introduced in the currencies Norwegian Krone (NOK), Danish Krone (DKK) and Swedish Krona (SEK).

For physical deliveries in settlement currencies SEK and NOK, the settlement location generally depends on the custody type:

a.  Transactions in CSC instruments will settle on CBF accounts at CBF/T2S applying the Conditional Settlement (CoSD) mechanism.

b.  Transactions in NCSC instruments will settle on CBF-i accounts in Creation.

Physical deliveries in settlement currency DKK will always settle on CBF-i accounts in Creation, even if the custody type is CSC.

The set-up of Eurex Nordic Equity Options requires also the Buy-In cash account and depending on C7 SCS client’s Clearing Settings also cash account for settlement cash offset.

Net clearing information will be provided via the CE890/1/2 Net Clearing Reports – XEUR and pending/settled delivery information via the CE860/1/2 Pending Delivery Reports as well as via the CE870/1/2 Settled Delivery Reports.

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.
 

Further information