EuroCCP is Europe’s most connected CCP.
For Equities it provides clearing members and their clients access to 37 stock exchanges, multilateral trading facilities and other trade sources across Europe. Clearing over 9000 securities across 18 European markets and ETFs, Depositary Receipts and US equities in European ICSDs.
For Derivatives EuroCCP provides clearing members and their clients access to Cboe Europe Derivatives facilitating trading of futures and options based on six Cboe Europe indices: the Cboe Eurozone 50, Cboe UK 100, Cboe Netherlands 25, Cboe Switzerland 20, Cboe Germany 30, and Cboe France 40.
Once a trade has been executed on one of the connected venues, EuroCCP manages the counterparty risk and reduces post-trade costs through netting.. EuroCCP delivers safety and savings to trading and clearing firms through its low-cost, low-risk pan-European clearing and settlement services.
Through the benefits of cross-platform netting with EuroCCP, all trades in the same ISIN and settlement location, regardless of where it is executed, can be netted with other trades into one single settlement obligation.
With direct access to T2S and benefitting from enhanced CCP functionality, EuroCCP members and their underlying trading participants benefit from increased STP and enhanced settlement efficiency. EuroCCP enables you to:
- Consolidate the clearing of the trading activity from the widest range of trade venues and markets
- Manage your risk and margin requirements from one location
- Reduce clearing and settlement cost through scale and netting efficiency.
Benefits of Using EuroCCP
Robust risk management enables EuroCCP to calculate and collect the appropriate amount of collateral to protect a participant from another’s default.
Low-cost clearing is provided by a tariff structure that is competitive and non-discriminatory.Pan-European capability enables Trading Participants to trade the same security on any of the platforms cleared by EuroCCP and have those positions – traded on the same day –netted into a single settlement and margin obligation.
Reliable technology used by EuroCCP minimises delays and downtime. Processing capacity is capable of handling platforms’ anticipated peak volumes.
Business continuity capabilities ensure that even during major disruptions, EuroCCP will remain operational.
If you wish to clear with EuroCCP you have two options. You can either become a direct member of EuroCCP or utilise the services of a General Clearing Member (“GCM”).
Who can become a client of EuroCCP?
The following entities are eligible to become a Clearing Members, provided approval is obtained from EuroCCPs credit and risk committees:
1. Credit Institutions and banks established in a jurisdiction that is a member of the Financial Action Task Force (FATF);
2. Investment firms established in a jurisdiction that is a member of the FATF;
3. Legal entities whose members or shareholders have unlimited joint and several liability for their debts and obligations, provided that such members or shareholders are institutions or firms mentioned under (a) and/or (b) above; and
4. Legal entities in a jurisdiction that is a member of the FATF and whose principal or sole object is the clearing of financial instruments.
Clearing members both GCM and DCM are subject to minimum capital requirements.
How do I become a clearing member?
If you wish to become a direct member of EuroCCP there are two membership options that you can choose. You can either;
1. Become General Clearing Member (GCM)
2. Become a Direct Clearing Member (DCM)
GCMs clear trades for themselves and/or for firms that are not EuroCCP members (Trading Participants or TPs). DCPs clear only for themselves.
Trading Participants do not have direct access to EuroCCP and their activity is cleared and managed via a General Clearing Member. A wide range of brokers, international banks and investment firms already utilise EuroCCP. For details of clearing members providing access to EuroCCP please see our participants page.
Clearing Participants are invited to complete the Clearing Participant Application to allow EuroCCP to complete the necessary due diligence to confirm eligibility.
Please contact EuroCCPs Relationship Management team who can guide you through the application process and provide the necessary forms and supporting information.
The Onboarding Process
Once a company has been approved for membership, EuroCCP staff will create a tailored package for onboarding and assist in setting up the members account(s). A Clearing Participant will be requested to provide information on its executing broker(s), netting options ,standing settlement instructions (SSI’s), cash agent banks and collateral preferences.
EuroCCP maintains a principal to principal relationship with Clearing Participants, as is customary for CCPs both in common and civil law jurisdictions. The clearing rules do not create a contractual relationship between EuroCCP and the underlying clients of the Clearing Participant.
Consequently, from a legal perspective, the designation of position and collateral accounts in the books of EuroCCP as segregated omnibus or individual client accounts only supports administrative segregation and does not identify or record ownership.
EMIR requires, at a minimum, segregation for proprietary (House) and third-party (Client) business in different accounts. This means a client account can contain the position of multiple clients.
Clearing Participants and their clients will have the option to maintain this setup, where client positions are commingled in the same omnibus account, or to fully segregate a client account away from other client accounts.
Some clients of a Clearing Participant may choose to have an individually segregated account, while others may choose to remain in an omnibus account.
Individual client account
In this option, the client account will be fully segregated and contain the positions of only a specific client. The main additional cost of this option is that the segregated client account will be margined and settled separately from the Clearing Participant’s other accounts and will therefore not benefit from any cross client netting opportunities at margin or settlement level. A segregated individual position account will also require posting of sufficient collateral in (a) segregated collateral account(s). In the event of a Clearing Participant default (an enforcement event under the pledge), any unused collateral remaining after completion of the default procedures will remain in this account.
Omnibus client account
In this option, the client account will be fully segregated from the house account, but the positions of the non-segregated clients are commingled. This is the minimum level of segregation required under EMIR.
This option is likely to be more economical both in terms of total margin called, settlement costs and number of collateral accounts required. The account will have a single margin call and will therefore benefit from margin netting across all clients within the account.
It will also be possible to settle on a net basis across all clients if desired and facilitated by the Clearing Participant.
EuroCCP offers Clearing Participants a variety of reports with a choice of delivery via machine readable output, SWIFT or email. Delivery of the data is free but there are charges for the communication lines supplied by third-parties;
- Real-time reporting offer EuroCCP Clearing Participants reporting of executed trades as soon as the data has been received from the trading platform and validated in the system of EuroCCP. This service can be offered via a connection through BT Radianz or a VPN-line.
- Intra-day reporting provide EuroCCP data files via (S)FTP. The data is delivered in ASCII format. The intra-day files are sent three times per day: 11:00, 14:00 and 17:00 CET, but we can offer different timing and frequency as requested by clients.
- End-of-day reporting includes end-of-day margin reports, trade reports, settlement reports, netting reports and fees reports. The end-of-day reports are sent at around 19.00 CET.
- Reports on trades are in the CIF file, whereas reports on risk management are in the CHC file. Both files contain data in an ASCII format and are sent via (S)FTP. EuroCCP can also send the end-of-day reports via secured email. When sent via email, data can be offered in either a .doc(x) or .pdf format.
An overview of the report contents, transmission types and distribution times can found in the Service Overview.
Suspension and exit Criteria
A Clearing Participant shall have the right to terminate its relationship with EuroCCP by giving notice of termination (a Clearing Termination Notice) in accordance with the Clearing
Participant Agreement, subject to the following provisions:
- Termination of a Clearing Participant Agreement shall be conditional on a resigning Clearing Participant holding no remaining Open Positions;
- On the issuance of a Notice of Default, any Clearing Termination Notice that has not yet concluded in effective termination at the time of such issuance shall be deemed null and void; and
- Any Clearing Termination Notice issued during a Default Handling Period shall be deemed
null and void