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The stability of the processes and of the risk management of European Commodity Clearing AG (ECC) has been proven yet again in connection with the default of the Clearing Member MF Global UK Ltd.
The London-Based company has been subject to the UK Financial Services Authority’s “Special Administration Regime“ since the end of October. Against this backdrop, MF Global UK Ltd. was suspended from clearing and exchange trading on the European Energy Exchange (EEX) on 1 November 2011. On 8 November 2011, the ECC Management Board effected a termination of the clearing agreement for MF Global UK Ltd. upon which its membership as a General Clearing Member of ECC ends.
In the run-up to the suspension, all customer positions were transferred to another Clearing Member so that settlement on ECC and EEX exchange trading were not affected at any time. Potential risks were covered by collateral deposited at all times and, hence, the Clearing Fund did not have to be used.
“The settlement of MF Global UK Ltd. once again confirms that the risk management processes of ECC work smoothly – also in emergencies. The accelerated change of clearers, which ECC introduced this year, in particular, has proven successful”, explains Dr. Thomas Siegl, Chief Risk Officer of ECC AG.
Currently, fifteen Clearing Members are integrated into the clearing process on ECC.
European Commodity Clearing AG (ECC) is the central clearing house for energy andrelated products in Europe. In its capacity as the central counterparty, ECC assumes clearingas well as physical and financial settlement of transactions concluded on APX-ENDEX,the CEGH Gas Exchange of the Vienna Stock Exchange, EEX, EPEX SPOT, HUPX and Powernext as well as clearing and settlement of transactions registered for OTC clearing on these exchanges.
