Eurex World's First Clearinghouse To Introduce Remote Clearing - Launch date Is August 1st

Eurex is the world's first exchange to expand its remote membership policy and facilities, already valid for trading, to clearing. So-called Remote Clearing will be introduced on August 1. Otto E. Nägeli made the announcement at a press conference in London on Monday. Participants from every country in the EU and from Switzerland will then not just be able to participate in trading directly; they will also be able to clear transactions themselves. Up to now they have had to clear their transactions through a General Clearing Member in Germany or Switzerland. The derivatives market is thus enhancing the flexibility of its participants in clearing substantially.

Otto E. Nägeli said: "The success of Eurex in the past has been based mainly on the opportunity to participate in trading from every place in the world. The same concept for clearing gives us another important competitive edge."

The high security standards of the Eurex clearinghouse will remain largely unchanged by remote clearing. Eurex clearing members will still have to be licensed by their national supervisory authorities for deposit-taking business, lending operations and commission business. A banking permit, however, will then no longer be required. An account with the Landes Zentralbank Hessen (LZB) and with the Swiss National Bank (SNB) is necessary for cash settlements.

Eurex currently has about 440 members; 347 of them have the status of Non Clearing Member (NCM) and use one of the 40 General Clearing Members (GCM) to clear their transactions; GCMs are authorized to clear transactions for third parties in addition to their clients' transactions and transactions for their own account. 49 participants are Direct Clearing Members (DCM), who clear their own transactions and their clients' transactions.

According to the statement by chief IT officer Jürg Spillmann in London on Monday, Eurex created the decisive prerequisites for Remote Clearing with the introduction of Eurex Release 4.0 on June 27. The main innovation of Release 4.0 is, as already reported, the introduction of a graphical user interface (GUI) for core clearing functions. The Clearing GUI supplements the Trading GUI introduced with Release 3.0. This will make it possible for trade administration and position management, give-up/take-up functionalities, settlement functions as well as data management and user administration to be carried out via the new graphical interface with the click of a mouse. The expansion of the give-up/take-up functionality to OTC block trades gives the participants greater flexibility in handling the clearing of these transactions. OTC block trades enable standardized processing, clearing and settlement of OTC transactions via the Eurex clearinghouse, thus reducing the risk.