Eurex Clearing
1. Introduction
This circular contains information with respect to the service offering of Eurex Clearing AG (Eurex Clearing) regarding the following topics:
The changes for topic A. will become effective as of 1 April 2025.
The amendments related to topic B. “Clarifications to the provisions related to collateral in form of securities provided under title transfer regime” are subject to a consultation process (Consultation). The Consultation will end with the expiry of 8 April 2025 (Consultation Period). The planned effective date of these amendments is 1 June 2025, depending on the outcome of the Consultation which will be communicated in a separate Eurex Clearing Circular.
2. Required action
Clearing Members, ISA Direct Clearing Members, Disclosed Direct Clients, FCM Clearing Members, vendors and other affected contractual parties should take the amendments to the Clearing Conditions into consideration.
The amendments of the Clearing Conditions with respect to topic B. 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 the proposed changes and amendments within the Consultation Period.
3. Details of the initiative
Regarding Topic A.:
Changes to the scope of eligible collateral in form of securities provided under title transfer regime
Eurex Clearing has revised its eligible securities collateral matrix and is going to 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.
This change will affect securities collateral utilized to satisfy Default Fund as well as ISA title transfer margin requirements. There are no changes to the scope of eligible securities collateral delivered under legal regime pledge.
The reason for the change is that certain countries do not support separation of legal and beneficial ownership from a tax point of view of the title transferred securities collateral. If no differing beneficial ownership status is supported for a market and Eurex Clearing would receive securities under transfer of title, Eurex Clearing will be the 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 Clearing'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. To ensure smooth processing securities from countries which taxwise do not support the beneficial ownership principle and which raise withholding tax on securities will be excluded from title transfer accounts going forward.
A dedicated file with the ISINs eligible for title transfer accounts will be available in the public area of the Common Report Engine as well as on the Eurex Clearing website www.eurex.com/ec-en/ under the following path: Services > Risk parameters > General parameters.
Regarding Topic B.:
Clarifications to the provisions related to collateral in form of securities provided under title transfer regime
While the current legal framework provided for under the Clearing Conditions already today supports different eligibility criteria for pledge and title transfer collateral, the amendments to the Clearing Conditions will provide more transparency in this regard. In addition, 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. This aims to follow the tax concept of “beneficial ownership” in tax jurisdictions recognizing such concept.
Consultation with respect to the proposed amendments to the Clearing Conditions
Pursuant to Chapter I Part 1 Number 17 of the Clearing Conditions, the proposed changes and amendments to the Clearing Conditions regarding topic C. 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 the proposed changes and amendments within the Consultation Period.
During the Consultation Period, comments on proposed changes or amendments shall be only submitted through a web-based commenting service for which a registration form is available on the Eurex Clearing website under the following link: Find > Forms: Consultation Form
The form has to be duly signed and returned to Eurex Clearing via e-mail to SpecialProvisions@eurex.com, in order to obtain a User ID and Password together with a link for accessing the web-based commenting service.
To the extent that Eurex Clearing decides to implement any comments received during the Consultation, the so-amended version of the Clearing Conditions will be published after the Consultation.
The currently envisaged effective date of the changes is 1 June 2025. However, after the Consultation Period, Eurex Clearing will issue a separate circular to announce the concrete date on which the proposed changes (as the case may be, implementing comments received during the Consultation) will come into effect.
This announcement will be made with at least 15 Business Days’ notice (Regular Notification Period). However, if Eurex Clearing AG should receive a request for a Prolonged Notification Period from more than two Affected Customers during the Consultation Period, a Prolonged Notification Period as set out in the Clearing Conditions will be applied and Eurex Clearing will notify all affected parties accordingly.
Publication of amendments
As of the effective date, the full version of the amended Clearing Conditions will be available for download on the Eurex Clearing website www.eurex.com/ec-en/ under the following link:
Rules & Regs > Eurex Clearing Rules & 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 to 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 of Eurex Clearing AG, as applicable.
Attachment:
Updated sections of the Clearing Conditions of Eurex Clearing AG:
Further information
Recipients: | All Clearing Members, ISA Direct Clearing Members, Disclosed Direct Clients of Eurex Clearing AG and vendors | |
Target groups: | Front Office/Trading, Middle + Backoffice, IT/System Administration, Auditing/Security Coordination | |
| Contact: | client.services@eurex.com | |
| Web: | www.eurex.com/ec-en/ | |
| Authorized by: | Jens Janka |
