When the Central Counterparty is launched, all of the some 400 trading participants in Xetra and on the trading floor (FWB) will be using the new clearing service. Twenty-nine of them will have the status of General Clearing Member (GCM), another 61 are Direct Clearing Members (DCM). GCMs clear their own transactions as well as those of third parties. DCMs clear only their own trades. This means that about 300 participants will be trading as non-clearers in Xetra and on the floor.
The Central Counterparty will be the counterparty for equity transactions: When a trade is made, the Central Counterparty enters the transaction and becomes the counterparty for buyer and seller. The use of a Central Counterparty has three main advantages for trading participants: First, every transaction remains completely anonymous, also in the clearing and settlement process (so-called "Post-Trade Anonymity"). The CCP also enhances risk management; based on the existing risk-based margining of Eurex Clearing AG, participants are offered a centralized risk-management with prompt assessment and provision of the risk positions and margin requirements; in addition, the Central Counterparty bears the risk that a counterparty will default. Finally, with so-called netting, the delivery and payment obligations are netted on a continuous basis, which enables a prompt assessment of the net obligations and a reduction of the total settlement volume.
Gross delivery management, which is available to market participants in their role as a clearing and settlement bank, is a central component of the first CCP release. It offers the opportunity to show clients the individual transactions in the netting process on a gross basis at the same time and manage them. The new CCP service will initially support transactions in some 1,000 German equities in collective safe-custody and tradable on Xetra. Plans call for an expansion of the CCP functional capacity and the number of securities in further releases
