Securities Clearing: C7 Securities Clearing Service (C7 SCS) Release 3.7: Production launch announcement

1.    Introduction

With this circular, Eurex Clearing announces the production launch of the Release 3.7 of C7 Securities Clearing Service (C7 SCS), on 2 September 2024. The launch will initiate the first phase of the release, with the second phase, introducing the remaining initiatives, scheduled for 23 September 2024.

With C7 SCS Release 3.7, following initiatives will be implemented:

• Process changes with regards to CSDR RTS Art. 19 amendments,
• GC Pooling Re-Design,
• Home Market Settlement (HMS) at ESES (Euroclear Settlement of Euronext-zone Securities) CSDs for Eurex physical deliveries in equities (optional),
• The new Monthly Fine Statement (CB227) report will be activated in the production environment.

Production start:

• 2 September 2024: Eurex Clearing processing with regards to CSDR RTS Art. 19 amendments
• 23 September 2024: Home Market Settlement for Eurex physical deliveries in equities and GC Pooling Re-Design

Learn now more about C7 SCS Release 3.7 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 3.7. System documentation, circulars, timeline and much more information is available there for you.

2.    Required action

A.  Eurex Clearing processing with regards to CSDR RTS Art. 19 amendments – Members will have to adapt their internal penalty processing according to regulatory requirements, especially decommissioning of Eurex Clearing's CSDR penalty reporting, and penalty booking procedure, where the (I)CSD is responsible for CCP penalty booking analogue to penalty processing for non-cleared business.

B.  Enhancements to GC Pooling processing – the improvements in processing with Clearstream CmaX will focus on further increasing the settlement performance and do not require any changes on Members’ side.

C.  Home Market Settlement (HMS) for Eurex physical deliveries in equities – Members willing to change the settlement process for equities held at the ESES markets (Euroclear France (SIC), Euroclear Nederland (NEC) and Euroclear Belgium (CIK)) can opt for settlement of physical deliveries resulting from Eurex equity derivatives at the respective home market (I)CSD settlement account. For this purpose, the settlement account information has to be provided to Eurex Clearing and the Power of Attorney for the respective ESES settlement account needs to be in place at ESES.

3.    Details of the initiative

A.    With the planned CSDR RTS Art. 19​ - (EU) 2023/1626 Eurex Clearing as CCP will no longer be involved in the regular monthly penalty booking process with its current Art.19 obligation for a breakdown on Clearing Member level. Eurex Clearing will consequentially decommission the CSDR penalty booking and reporting processing with the new RTS enforcement on 2 September 2024:

• The monthly penalty billing and invoice process of (I)CSD calculated CSDR penalties on Clearing Member level,
• The billing-related report Monthly CSDR Penalties (CB226),
• The daily and monthly CSDR penalty Member reporting via reports Daily CSDR Penalties (CE840) and Monthly CSDR Penalties (CE845),
• The new process for handling of CSDR penalty imbalances of Eurex Clearing will be introduced. 

Decommissioning timeline for the CSDR reports distributed by Eurex Clearing was provided in C7 SCS 3.7 Release Notes.

In case of net penalty imbalance, Eurex Clearing will allocate a remaining net cash amount to the Clearing Members. For introduction of the new CSDR penalty imbalance compensation process, please refer to Eurex Clearing Circular 044/24.

B.    The changes implemented in processing between the C7 SCS system and CmaX will result in more efficient settlement processing for the multiple same-day GC Pooling trades in the same direction.

C.    With the Home Market Settlement (HMS) service, Eurex Clearing extends its range of supported settlement locations in C7 SCS for physically settled equity derivatives concluded at Eurex Exchange. This will enable Members to opt for settlement at Euroclear France, Euroclear Nederland and Euroclear Belgium. The structural changes on member settings in C7 SCS comprise the new settlement locations, the related settlement account identifier in T2S format, a new field for T2S Party BIC on settlement account level and HMS Settlement Account Settings. The “T2S Party BIC” is introduced as part of the Settlement Account data and it needs to be filled with the BIC11 of the settlement account holder at ESES for each settlement account related to one of the new ESES settlement locations, i.e., SIC, NEC, CIK.

Furthermore, to satisfy requirements regarding French tax processing for French Registered Shares and minimize the Member impact by change between Valeurs Essentiellement Nominatives (VEN) and Valeurs Occasionnellement Nominatives (VON), Eurex Clearing will automatically apply the correct settlement account for French securities.

With introduction of HMS, the “CCP eligible instruments” will also contain information on alternative (I)CSD on a daily basis. Thus, the existing CCP Eligibility File will be extended with an additional information indicating the relevant Home CSD.

Please check Eurex Clearing Readiness Newsflash from 24 April 2024: C7 SCS Release 3.7: Format change of “CCP eligible instruments“ file for more details.

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