Appointment of DMP-related Contact Persons
With respect to the DMP and pursuant to Chapter I, Part 1, Number 7.5 (4) of the Clearing Conditions of Eurex Clearing ("Clearing Conditions"), each Clearing Member shall appoint one or more qualified employees of the Clearing Member institution or of a third-party entity as coordinators ("DMP Coordinator") and deputies ("DMP Deputy").
- Clearing Members shall appoint DMP Coordinators and DMP deputies and maintain up to date contact details in the Member Section.
For the purpose of the execution of Default Management Auctions (DM Auctions) during a termination scenario or a Fire Drill, Eurex Clearing recommends to Clearing Members to appoint employees in the Eurex Clearing Auction Tool.
- Clearing Members can assign two different roles in the Eurex Clearing Auction Tool per Liquidation Group:
- Business Manager and
- Bidder
Participation in DMP Fire Drills
Upon request of Eurex Clearing, Clearing Members are obliged to participate in regular fire-drills (Chapter I, Part 1, Number 7.5.5 Clearing Conditions). For each Liquidation Group, Eurex Clearing nominates Clearing Members for whom participation is mandatory.
- Mandatory participants will be contacted by Eurex Clearing ahead of the Fire Drill and are obliged to participate in the assigned auctions.
All other (non-mandatory) Clearing Members and Disclosed Direct Clients are invited to participate in the simulation on a voluntary basis.
- Voluntary participants who are interested in participating in a Fire Drill shall reach out to the Default Management Team by sending an e-mail to DMP_Inbox@deutsche-boerse.com.
Participation in Default Management Committees
Participation in DMCs
For each Liquidation Group, Eurex Clearing establishes Default Management Committees (DMCs), which are staffed with employees of pre-selected Clearing Members. DMCs are temporarily convened in case of a Clearing Member default or for regular Fire Drills. Main purpose of such DMCs is to advise and assist Eurex Clearing with regards to DMP-related matters.
A DMC is governed by Chapter I, Part 1, Number 7.5.1 Clearing Conditions and the rules set forth in the Default Management Committees Rules.
- Clearing Members active in a particular Liquidation Group can volunteer to participate in the DMC established for such group, by sending an e-mail to DMP_Inbox@deutsche-boerse.com.
- If there is an insufficient number of voluntary participants, Eurex Clearing is entitled to select Clearing Members to participate in a DMC.
- Clearing Members (voluntarily or un-voluntarily) participating in a DMC shall sign the Agreement for the Participation in a Default Management Committee.
- Once selected to participate in a DMC, each relevant Clearing Member institution shall nominate employees as DMC Member and as DMC Deputy.
- In case of a Fire Drill or a termination event, DMC members shall make themselves available on a short notice and consult Eurex Clearing in DMP related matters.
All signed documents shall be sent to DMP_Inbox@deutsche-boerse.com.
Participation as Market Advisors
In addition to DMCs, Eurex Clearing may agree with a Clearing Member on the nomination of Market Advisors with respect to one or more Liquidation Groups. Market Advisors shall advise Eurex Clearing on a continuous basis on the most recent market developments, market liquidity, potential hedging options and hedging costs with respect to the relevant Liquidation Groups.
Participation in Hedging Process
Hedging is an essential element of the DMP to reduce the market risk of a portfolio and to stabilize it for DM Auctions. In consultation with the DMC, Eurex Clearing executes the hedging strategy bilaterally or conducts DM Hedging Auctions in accordance with the provisions under Chapter I, Part 1, Number 7.5.2 and the Default Management Auction Rules.
Opted-in Hedging Auction participants can benefit economically from winning the hedge-trade at their price, seniorize their default fund tranche and support rebalancing of the CCP in a critical situation. In case of non- or bad-bidding by the participant, the relevant default fund tranche will be juniorised.
- Generally, the participation in DM Hedging Auctions is voluntary. Only in case the number of voluntary participants is insufficient to conduct successful Hedging Auctions, Eurex Clearing may appoint Clearing Members as Hedging Auction Participants (Chapter I, Part 1, Number 7.5.2 (2) (iii) (c) of the Clearing Conditions).
- Each (voluntary or non-voluntary) Hedging Auction Participant is obliged – upon invitation to a Hedging Auction by Eurex Clearing – to submit bids via the Eurex Clearing Auction Tool.
- Each Hedging Auction Participant may appoint a third-party or a Disclosed Direct Client to participate in Hedging Auctions.
- In case of a voluntary participation in DM Hedging Auctions, the relevant Clearing Member needs to sign the Hedging Auction Participation Agreement (incl. the Product Annex).
- In case the relevant Clearing Member wants to appoint a client to participate in DM Hedging Auctions, in addition the Hedging Auction Bidding Agent Appointment Form (incl. the Product Annex) has to be signed.
- In case of the participation of a Disclosed Direct Client, the Hedging Auction Client Participant Agreement (incl. Product Annex) needs to be executed. In such a case the Default Fund Contribution of the Clearing Member is not affected. The participating Disclosed Client is liable for bad/non-bidding.
All signed documents shall be sent to DMP_Inbox@deutsche-boerse.com.
For a bilateral hedging execution process, Clearing Members or Disclosed Direct Clients, who are interested in participation as potential counterparties, shall contact the Default Management Team by sending an e-mail to DMP_Inbox@deutsche-boerse.com.
Participation in Liquidation Auctions
A Liquidation Group-specific auction process is a major component of the DMP for portfolio liquidation.
Eurex Clearing conducts DM Auctions with Clearing Members qualifying as Mandatory Participants (Chapter I, Part 1, Number 7.5.3 (3) (ii) Clearing Conditions). DM Auctions are governed by the provisions under Chapter I, Part 1, Number 7.5.3 Clearing Conditions and the Default Management Auction Rules.
- Mandatory Participants are – when invited to a DM Auction – required to participate and to provide Bids via the Eurex Clearing Auction Tool.
- Clearing Members may allow their Disclosed Direct Clients or any other customer to participate in in DM Auctions. Clearing Members shall sign the Client Participant Appointment Form.
- For ISA Direct Clearing Members the relevant Clearing Agent shall participate in DM Auctions. The ISA Direct Clearing Member shall sign the Clearing Agent Participant Appointment Form.
- Clearing Members may operationally outsource their mandatory bidding obligation by appointing a Bidding Agent or Selected Auction Participant. A signed Bidding Agent Appointment Form or Selected Auction Participant Appointment Form shall be provided to Eurex Clearing.
All signed documents shall be sent to DMP_Inbox@deutsche-boerse.com.
Participation in Independent Trade Execution
In specific situations, in particular in case of "small" or "special" portfolios of the defaulted Clearing Member, Eurex Clearing may liquidate such portfolios by entering into bilateral trades outside of DM Auctions or on-exchange as Independent Trades in line with Chapter I, Part 1, Number 7.5.3 Clearing Conditions.
- Any Clearing Member or Disclosed Client, who is interested to be contacted as potential counterparty for an Independent Trade with respect to a particular Liquidation Group, is encouraged to contact the DM Team by sending an e-mail to DMP_Inbox@deutsche-boerse.com.
Acting as Replacement Clearing Member for Client Transactions in case of Porting
Eurex Clearing offers Direct Clients of the defaulting Clearing Member a transfer of all client-related transactions and collateral to a another Replacement Clearing Member (Porting).
- Disclosed Direct Clients are entitled to select whether their transactions and collateral is ported or terminated by submitting the relevant Porting Election Notice.
- Eurex Clearing also offers Porting to Undisclosed Direct Clients who have to find a Replacement Clearing Member first, which then contacts Eurex Clearing.
- It is the responsibility of the respective (Disclosed or Undisclosed) Direct Clients to align with a Replacement Clearing Member on taking up their transactions and collateral.
- Porting will only be successful, if the applicable Porting Requirements are fully met prior to the expiry of the applicable Porting Period.
- Clearing Members who are interested in becoming a Replacement Clearing Member in respect of the relevant Clients of the defaulted Clearing Member should contact client-porting@eurex.com.
