Eurex Clearing Expands CCP Switch Incentive Program

Brexit Muddles Future of UK-EU Linkage
  • CCP Switch Incentive Program extended until June 2021
  • 100% waiver of booking fees for portfolio transfers
  • New “voucher” rebate model applicable until June 2021

Eurex Clearing has strengthened its CCP Switch Incentive Program and extended it until June 2021.

A complete waiver of booking fees for OTC interest rate swaps (IRS) and overnight index swaps (OIS) applies for banks and institutional investors for portfolios transferred to Eurex Clearing. Additionally, Clearing Members receive on the back of such portfolio transfers a substantial fee rebate voucher on future transactions in OTC interest rate derivatives. By switching a swaps portfolio of 250 billion EUR, a Clearing Member would realize an economic benefit of up to 1.5 million EUR.

Furthermore, Eurex Clearing renews its discounts on the Gold “All-Clear” fee packages. Clearing Members purchasing the 3-year Gold fee pack receive a discount of 33% and save up to 3 million EUR over this 3-year period.

With this step, the clearing house further supports market participants in meeting the requests of regulators. After prolonging the equivalence of UK CCPs for another 18 months, the European Commission had recently renewed its call on the industry to use that period to substantially reduce their exposures to UK Market Infrastructures.

Matthias Graulich, Member of the Eurex Clearing Executive Board: “With the expansion of our CCP Switch Incentive Program, we want to make it easier for market participants to comply with the demands of the regulators and transfer swap business into the European Union. With our offering to clear OTC interest rate swaps within the EU, we are contributing to a more resilient and competitive clearing ecosystem.”

Following the launch of the Eurex Clearing Partnership Program at the start of 2018, Eurex Clearing has established a viable EU27-based alternative liquidity pool for OTC interest rate derivatives. In the meantime, more than 500 banks and buy-side firms have been on-boarded for swaps clearing. Market share in Euro denominated OTC interest rate derivatives in terms of outstanding volume has been continuously growing and currently stands at roughly 19 per cent.

Source: Eurex

Related articles

  1. Brexit Vote Could Affect Emerging Market Flows

    Review of trading desks found that incoming banks did not yet retain full control of their balance sheets.

  2. UK Launches Asset Management Review

    UK has a greater market share than pre-Brexit for on-venue execution of GBP interest rate swaps.

  3. AFME Warns on ‘Brexit’

    Recognition has been temporarily extended until 30 June 2025.

  4. The trade repository has been providing UK services since the first business day after Brexit on 4 Jan 2021.

  5. Brexit Muddles Future of UK-EU Linkage

    European firms could operate temporarily in the UK after Brexit while seeking full authorisation.