Euroclear Finland – postponement to implementation of Partial Settlement

Further to the Newsflash published on 19 July 2019, Euroclear Finland’s proposed implementation date of partial settlement on trade date 30 September has been postponed to 7 October 2019. EuroCCP will therefore mandate the use of PARQ for this market in keeping with its Regulation Settlement. Trades with trade date 4 October 2019 will not be sent to the market and will be released in the morning of 7 October 2019.

The main changes impacting EuroCCP’s services incorporate:

  • Partial settlement functionality.
  • Settlement agent Power of Attorney.

Partial Settlement

The partial settlement windows for settlement instructions against payment are scheduled at 11:00, 13:00 and 16:30 EET.

Clearing Participants need to ensure that the settlement instructions submitted into the settlement system include the PARQ indicator. This is a mandatory requirement and Clearing Participants are responsible for informing any trading members that they must update their settlement instructions to reflect the PARQ indicator on 7 October 2019.

Settlement Agent Power of Attorney

Settlement instructions sent to the Clearing Participant’s settlement agent under the Settlement Agent Power of Attorney (PoA), will be enriched to include the partial indicator PARQ and the status of the PoA settlement instruction will be “released” (NEWM).

Should you have any further questions please do not hesitate to contact EuroCCPs Relationship Management Team.

 

EuroCCP to provide clearing and settlement services to TradeWeb for European ETFs

EuroCCP, Europe’s leading equities clearinghouse, today announces its collaboration with TradeWeb, a global operator of electronic marketplaces for multiple products including Rates, Credit, Equities, ETFs and Money Markets.

The press release associated to this announcement can be found here.

The new clearing link will enable its members and their clients to streamline the settlement process of ETFs in Europe, whilst providing important counterparty protection in the event of a default.

The settlement of ETFs today can be impacted by high costs associated with OTC settlements and subsequent fails. With CSDR settlement discipline measures on the horizon, the introduction of CCP services for TradeWeb in ETFs can mitigate against such issues, whilst being able to cross net ETFs traded and cleared on other trading venues.

The clearing link between TradeWeb & EuroCCP is expected to be available to its clients in Q4 2019, subject to regulatory approvals.

Please contact the Relationship Management & Client Services team at EuroCCP for further information.

ETF Buy-In Extension Period

Dear Clearing Participant,

EuroCCP is pleased to announce an extension to the buy-in period for ETF securities from ISD+4 to ISD+7. This extension has been made in close cooperation with the ETF community and to align the buy-in period for ETFs with local market practices. The changes become effective per settlement date 12 Aug 2019.

EuroCCP’s Regulation Buy-in Procedure has been updated accordingly and can be found here, which includes the normal timeline below, as well as the new ETF timelines.

The changed timeline for ETFs only will be:

Please note this will not impact the market maker buy-in timeframes and will also be  applicable across all markets.

Should you have any further queries, please do not hesitate to contact your Relationship Manager.

EuroCCP Annual Client Review 2019

EuroCCP is shortly to undertake its annual Clearing Participant review which will require all Clearing Participants to provide the following information:

  1. Certificate of Incorporation and current Articles of Association,
    Excerpt from Chamber of Commerce or Company Register and
    Organisation chart
  2. Current Authorised Signatory list
  3. Proof of regulated status: Credit institution, Bank or Investment firm established in a FATF country (If a bank, evidence of banking license)
  4. Copy of your Annual Report (English Version) and Disclosure Report
  5. Current contact list for all teams within your organisation, including escalation contacts
  6. LEI Number
  7. Contact Details of the Security Team and SOC (telephone number, email address, escalation 24X7 telephone number)
  8. Ultimate Beneficial Ownership (UBO) greater than 25%

EuroCCP is a central counterparty authorised pursuant to the EU Regulation on OTC derivatives, central counterparties and trade repositories (Regulation 648/2012 “EMIR”) and is required to conduct a comprehensive review of its Clearing Participants.

The deadline for completion of this review is 19th August 2019 and EuroCCP’s Client Services Team will be contacting all Clearing Participants by email from 27th July 2019

We look forward to the return of this information before that date however, should you have any further queries please do not hesitate to contact us.

Euroclear Finland – Partial settlements and EuroCCP to mandate PARQ indicator

Please be aware that Euroclear Finland has confirmed the introduction of partial settlement on trade date 30 September 2019. EuroCCP will therefore mandate the use of PARQ for this market in keeping with its Regulation Settlement.

The main changes impacting EuroCCP’s services incorporate:

  • Partial settlement functionality.
  • Settlement agent Power of Attorney.

Partial Settlement

The partial settlement windows for settlement instructions against payment are scheduled at 11:00, 13:00 and 16:30 EET.

Clearing Participants need to ensure that the settlement instructions submitted into the settlement system include the PARQ indicator. This is a mandatory requirement and Clearing Participants are responsible for informing any trading members that they must update their settlement instructions to reflect the PARQ indicator on 30 September 2019.

Settlement Agent Power of Attorney

Settlement instructions sent to the Clearing Participant’s settlement agent under the Settlement Agent Power of Attorney (PoA), will be enriched to include the partial indicator PARQ and the status of the PoA settlement instruction will be “released” (NEWM).

Testing

Clients are encouraged to test the new functionality to ensure a smooth migration and that the enriched settlement agent POA instructions flow STP in participants post trade systems.

EuroCCP will support testing from 5 August 2019 until 9 September 2019 and clients can contact EuroCCP’s testing team at: clienttesting@euroccp.com to arrange support.

Should you have any further questions please do not hesitate to contact EuroCCPs Relationship Management Team.

 

Swiss Equivalence

The Swiss Federal Department of Finance (FDF) published a notice on 24 June 2019 that in the event that the EU equivalence decision for Swiss trading venues is not extended beyond its current expiration date of 30 June 2019, it will remove the recognition that allows EU trading venues to offer trading in certain Swiss equity securities.

Due to this measure, the relevant EU trading venues have announced to delist certain equities securities of companies with a Swiss registered office and listed on a Swiss exchange in the event that Switzerland is not granted equivalence from the EU by Sunday 30th June 2019.

EuroCCP will continue to be authorized to offer clearing services both in the EU as well as in Switzerland and will continue to clear Swiss market securities.

The measure taken by the FDF will impact EU trading venues ability to admit to trading securities of companies with a Swiss registered office and listed on a Swiss exchange with effect from the start of trading on Monday 1st July 2019.

Clearing participants are advised to speak to the individual trading venues for further information.

EuroCCP’s clearing services remain unaffected.

Reporting on Capital Requirement Regulation

The Capital Requirement Regulation (EU 575/2013-CRR) requires EuroCCP to disclose information to allow a Clearing Participant to determine its own funds requirement for its exposure on EuroCCP.

Accordingly, please find the information for 31 March 2019

in pdf format,

or

in Excel format.

Updated Regulation Fees and Penalties

EuroCCP is committed to continue to provide a competitive and valuable service to its clients and the industry.  To support this, we would like to inform you that following EuroCCP’s annual pricing review, EuroCCP’s fee schedule will be amended effective from 1 May 2019 as follows:

  1. Clearing Participant Membership fee  (General and Direct) : Increase from EUR 12,000 to EUR 20,000 per annum
  2. Trading Participant Membership fee:  increase  from EUR 2,500 to EUR 3,500 per annum.
  3. Clearing fee cap: increase from  EUR 130,000 to EUR 140,000 per month.

The key drivers for our increase are set out below.

EuroCCP has incurred increased workload and additional costs because of Brexit and the contingency arrangements that we have had to put in place for our clients, specifically onboarding new EU platforms and new EU members.  There are also additional ongoing costs as a result of servicing the new EU platforms, as well as managing member flows between entities to ensure continuity of services in all Brexit scenarios.

EuroCCP continues to invest and develop its business to deliver greater efficiencies to clients.  Specifically, clearing members are able to consolidate more activity through EuroCCP as we have recently established connections to Euronext Dublin, Oslo Bors, Borsa Italiana and Morgan Stanley MTF.  The preferred clearing model on Euronext and Borsa Italiana is live and we encourage members to take full advantage of the lower clearing fees and the netting benefits available by choosing EuroCCP as their preferred CCP.  We plan to go live with connections to additional venues, including Deutsche Boerse in the coming months.

The fee increase will also cater for EuroCCP’s continuous strengthening of its risk and control framework in an ever increasingly demanding regulatory environment.

Finally, we are looking at a number of opportunities, such as additional products and service improvements to help us deliver further efficiencies for our clients.

We would like to take this opportunity to thank you for your continuous support.

Should you wish to discuss trade feed access and netting opportunities or have any questions regarding the above changes please contact EuroCCP’s Relationship Management team.

A copy of the new fee schedule can be found below.

Clearing Rule Book changes (consulation 20 March 2019)

EuroCCP has published an updated version of its Clearing Rule Book (“CRB”) on its website.

The changes primarily relate to a number of recovery tools which are included in EuroCCP’s recovery plan and which require the involvement of the Clearing Participants.

A memorandum outlining the changes to the CRB also been posted on EuroCCP’s website.

The changes to the CRB are open for consultation pursuant to article 3.7.3 of the CRB. The 30 calendar day consultation period ends on 18 April 2019.

The relevant provisions are expected to apply shortly after the end of the consultation period. Clearing Participants will be advised of the outcome of the consultation by newsflash following the consultation period.

All changes are subject to regulatory review and approval (if required).

Should you wish to take part in the consultation process or have questions relating to these changes, please contact the Legal and Compliance Department at compliance@euroccp.com.

Aquis Exchange Europe go live preparations

Aquis Exchange Europe has announced its plan for a soft go-live in order to ensure a smooth transition. From Wednesday 20 March 2019, trading will be available in the following twelve selected securities:-

ISIN Currency Operating MIC
NL0000440584 EUR AQEU
IT0003697080 EUR AQEU
ES0105128005 EUR AQEU
BE0003853703 EUR AQEU
FR0004024222 EUR AQEU
PTSNC0AM0006 EUR AQEU
DE0005493092 EUR AQEU
JE00B3DCF752 EUR AQEU
BMG0451H1170 NOK AQEU
SE0000191827 SEK AQEU
BSP951331318 DKK AQEU
FI4000197934 EUR AQEU

Clearing Participants wishing to start trading on the new platform need to ensure that the following is completed:-

  • Statement of Authority fully completed and signed.
  • Netting set up agreed.
  • Standard Settlement Instructions (SSIs) confirmed.
  • Successful testing undertaken.

Further information on membership applications, client testing and transition arrangements can be found at EuroCCP’s EU based venues & Brexit webpage.