Eurex Clearing Expands CCP Switch Incentive Program
- 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.
UK will be granting a package of equivalence decisions to the EU and EEA member states.
Only mutual equivalence will allow firms to satisfy STO obligations at trading venues in both the EEA and UK.
EU investment firms will not have to report transactions on a UK trading venue via an EU APA.
The scope of the UK STO after the end of the transition period remains unclear.
The pan-European equities trading venue plans to invoke plans on 30 November 2020.