Eurex Clearing Readiness Newsflash | C7 SCS Member Simulation: Eurex Nordic Equity Options 

Dear customer,

With this Newsflash, Eurex Clearing informs you about the C7 SCS Member Simulation in Eurex Nordic Equity Options. 

Eurex Clearing offers Members a testing environment for Eurex Nordics, where they can test the End-to-End (EtE) flow from Trading-Clearing-Settlement as well as the C7 SCS and T2S/(I)CSD Reporting.

This Newsflash provides Members with necessary information in preparation for a successful Simulation test of Trade Entry, Clearing and Settlement of Nordic equity options with the Production launch date on 8 July 2024. With this launch, Norwegian stock options on underlying shares in Non-Collective Safe Custody (NCSC), Danish stock options on underlying shares in Collective Safe Custody (CSC), and a mix of non-Swedish stock options on underlying shares in CSC and NCSC will be introduced in the currencies Norwegian Krone (NOK), Danish Krone (DKK) and Swedish Krona (SEK), respectively.

Timeline:

The Focus days for Member testing start on 13 May 2024 and end on 23 May 2024. According to the published Eurex Clearing Simulation Calendar, there are five business days on which the test can be performed. It is preferred that trades for the physical delivery are tested within the first three business days, i.e. on 14 May 2024, 16 May 2024 and on 21 May 2024 with settlement within the last two business days, i.e. on 22 May 2024 and on 23 May 2024.
 
Test environments:

Participating environments available for testing are:

• C7 SCS Simulation
• T7 Eurex Simulation
• IMS23 for CBF
• OCCT for CBF-i/Creation
• UTEST for T2S (available starting from 10 May 2024)

Trade Entry:

Members can use the Trade Entry Service (TES) of Eurex T7, where no matching in the order book is required.

For the participation in the member test, it is mandatory to create positions on the Eurex products.

There is a possibility to manually exercise trades till the expiration day, as all options have the American exercise style. Option trades/orders in Eurex T7 can be inserted beginning from 30 April 2024 earliest.

The expiration date of the shortlisted equity options available in simulation in the table below is the third Friday of each month, i.e. 17 May 2024. Since no batch run is offered on that day, Members can either manually exercise the options only on available batch days or, for those that expired in the money on the expiration day, i.e. on 17 May 2024, process the batch at the next possible date, i.e. on 21 May 2024.

Clearing/Settlement:

For physical deliveries in settlement currency SEK and NOK, the settlement location generally depends on the custody type:

• Transactions in CSC instruments will settle on CBF accounts at CBF/T2S applying the Conditional Settlement (CoSD) mechanism.
• Transactions in NCSC instruments will settle on CBF-i accounts in Creation.

Physical deliveries in settlement currency DKK will always settle on CBF-i accounts in Creation even if the custody type is CSC, because Eurex Clearing does not maintain a Dedicated Cash Account (DCA) in currency DKK for T2S settlement.

To ensure that there are sufficient holdings on Members’ CBF and CBF-i 6-series accounts as well as sufficient cash in CBF-i 6-series cash accounts, please get in touch with the Connectivity team of Clearstream for setup as soon as possible and provide (I)CSD account details via connect@clearstream.com. For setup of cash accounts in CBF-i too, Members should contact the Connectivity team of Clearstream via the indicated email.

For cash account setup in the C7 Payment System (C7 PS) Members are advised to contact their Key Account Manager (KAM) and additionally inform about their ‘Settlement Account Settings’ related to the Nordic currencies in C7 SCS.

For delivery instructions to be settled, net position trades, respectively their delivery instructions, must be released at (I)CSD and not be on hold.

Reports:

Net clearing information will be provided via the CE890/91/92 Net Clearing Reports – XEUR and pending/settled delivery information via the CE860/61/62 Pending Delivery Reports as well as via the CE870/71/72 Settled Delivery Reports. The reconciliation against the respective (I)CSD reports is recommended.

ISINs:

The following underlying ISINs are available for testing, with possibility of Focus days:

*These Products are already in Production.
**The combination of CSC, SEK, and delivery instruction sent to CBF are settled in T2S (conditional settlement).
***Since Eurex Clearing has no DKK account at T2S, it settles via CBF-i instead of CBF/T2S.
 

Moreover, please consider the following information:
 

• Settlement accounts and cash accounts for Delivery versus Payment (DvP) are required at (I)CSDs like in production. Cash accounts in C7 PS are required, too. When CBF and CBF-i are connected to C7 SCS simulation, sufficient cash holdings on these cash accounts are necessary.
• Settlement Agents are encouraged to check their message subscription for settlement reporting and custody reporting at the (I)CSD for their settlement accounts.
• Settlement Agents are encouraged to check their connectivity to T2S and (I)CSD with access to T2S and (I)CSD application, including GUIs. It is recommended to align with relevant (I)CSD in time in case connection tests are required before the simulation start.

Please note that no performance testing is to be conducted.

For general information regarding the simulation environments, timelines, account related setups etc. please refer to the Eurex Clearing Member Simulation Guide C7 SCS 3.5​, which is also available under the following path: Support > Initiatives & Releases > C7 SCS Releases > C7 SCS Release 3.5.
 

Kind regards, 
Your Client Services Team

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